Reducing Harm and Preventing Underage Use - 2020-2021 Corporate Responsibility Progress

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Reducing Harm and Preventing Underage Use - 2020-2021 Corporate Responsibility Progress
Underage Use

Corporate Responsibility Progress
Reducing Harm and Preventing Underage Use - 2020-2021 Corporate Responsibility Progress
Altria’s tobacco companies are the undisputed market leaders in the U.S. tobacco industry, with profitable premium products,
                      iconic brands and a strong American heritage stretching back more than 180 years. As the leader in an evolving industry, we
Introduction          have the opportunity to shape a better future for adult tobacco consumers, our employees and shareholders. Our Vision is to
                      responsibly lead the transition of adult smokers to a smoke-free future.
                      To achieve our Vision, we will pursue initiatives designed to promote the long-term welfare of our company, stakeholders,
                      society at large and the environment. We believe the actions we are taking will create a different Altria — and a different tobacco
                      landscape that we believe will benefit today's adult tobacco consumers, our businesses, and the thousands we employ. Our
                      responsibility focus areas address the issues we believe are most important to drive this progress.

Reducing                                            Drive
                            Protect                                    Reduce Harm              Prevent             Support Our              Engage
the Harm of                                     Responsibility
Tobacco                        the                                      of Tobacco             Underage               People &               & Lead
                                                Through Our
Products                  Environment                                    Products                 Use               Communities            Responsibly
                                                 Value Chain

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Reducing Harm and Preventing Underage Use - 2020-2021 Corporate Responsibility Progress
Altria’s Responsibility Focus Areas
                                     ENVIRONMENTAL                                              SOCIAL                                         GOVERNANCE

                                                   Drive                    Drive
                                                                       Reduce  Harm                     Prevent                    Support Our               Engage
                                               Responsibility           Responsibility
                             the                                                                                                     People &                & Lead
                                               Through Our              of Tobacco
                                                                        Through  Our                   Underage                    Communities             Responsibly
                                                Value Chain
                                                                         Value Chain                      Use
the Harm of                                            Scope                                                                          Scope
Products                Adult smoker transition to smoke-free products                               Responsible marketing
                        External conditions for tobacco harm reduction success                       Underage access prevention
                        Cessation support                                                            Positive youth development

                                                Why it Matters                                                                 Why it Matters
                       Most of Altria’s net revenues come from the sale of its tobacco operating      The concepts of tobacco harm reduction and underage tobacco
                       companies’ products. The use of tobacco products, however, is a significant    prevention are directly linked, and we remain steadfastly
Preventing             public health concern, as underscored by the extensive public health           committed to both as we lead the adult smoker transition to
Underage Use           authority information on tobacco and health.                                   smoke-free products. We also recognize that our portfolio now
                                                                                                      includes a broad range of products intended for adults.
                       We believe successfully transitioning adult smokers to smoke-free products
                       represents a substantial opportunity for our adult tobacco consumers,
                       our businesses, society and our shareholders. With adult smoker demand                                    2025 Goals
                       for smoke-free alternatives, innovation and an appropriate regulatory
                       framework, we have the opportunity to make more progress on harm               • Lead the industry in preventing underage use of products
                       reduction in the next 10 years than we have in the past 50 years.                intended for adults 21 and over.
                                                                                                      • Contribute to the healthy development of youth ages 12 – 18.
                                                  2025 Goals
                       • Accelerate investments in innovation, science and regulatory support
                         for new smoke-free product platforms.
                       • Create the conditions for tobacco harm reduction to succeed through
                         external communications and engagement, science and advocacy.
                       • Provide access to expert quitting information for those who have
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                         decided to quit.
Reducing Harm and Preventing Underage Use - 2020-2021 Corporate Responsibility Progress
What’s in this report?
                      Table of Contents                                                                                                                            In 2020, we completed a materiality assessment that identified key
                                                                                                                                                                   responsibility focus areas for our businesses. In order to make progress
Introduction          Introduction
                                                                                                                                                                   toward our Vision through 2030, we are committed to Reducing the Harm of
                                                                                                                                                                   Tobacco Products and Preventing Underage Use of products intended for adult
                         Moving Beyond Smoking : A Note from Billy Gifford  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 5

                                                                                                                                                                   consumers 21 years of age or older.
                         The Harm Reduction Opportunity  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 6                   The following report details our approach to Moving Beyond SmokingTM and
                                                                                                                                                                   progress toward our 2025 goals across these two focus areas, where the activity
                      Reducing the Harm of Tobacco Products                                                                                                        and success outcomes are heavily intertwined. This includes Altria’s work to
                                                                                                                                                                   create the external conditions for tobacco harm reduction success; accelerate
                         Performance Snapshot .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  10                investments to help transition adult smokers to smoke-free products; support
                                                                                                                                                                   cessation for adult tobacco consumers who have decided to quit; market
Reducing                 Our Strategy & Approach  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 11       responsibly to limit reach to unintended audiences; prevent underage access
the Harm of
                                                                                                                                                                   through both retail and social sources; and, invest in positive youth development
                         Supporting Cessation  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 23    programs that reduce youth engaging in risky behaviors, including tobacco use.

                      Preventing Underage Use                                                                                                                      What’s not in this report?
                                                                                                                                                                   This report is not designed to provide a comprehensive review of the progress
                         Performance Snapshot .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 26
                                                                                                                                                                   against all our responsibility focus areas. Our website,, provides
                                                                                                                                                                   additional responsibility content including our 2020-2021 Engage and Lead,
                         Our Commitments  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 27
                                                                                                                                                                   Supporting Our People & Communities reports and Driving Responsibility
                                                                                                                                                                   Through Our Value Chain reports as well as our 2019 Corporate Responsibility
                         Our Strategy & Approach  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 29
                                                                                                                                                                   Progress report. We will provide updates on our remaining focus areas
Preventing                                                                                                                                                         throughout the year through a series of individual “focus reports.”
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                         Deepening Our Commitments Across the Framework  .  .  .  .  .  .  .  .  .  .  .  .  . 32

                                                                                                                                                                                                                    Supporting Our People
                                                                                                                                                                                                                    & Communities

                                                                                                                                                                                                                            Corporate Responsibility Progress


                      Reporting Disclosure. This disclosure is guided by the Global Reporting Initiative (GRI), the
                      leading sustainability reporting framework, and the disclosure standards set forth by the                                                    Notes:
                      Sustainability Accounting Standards Board (SASB). You can find our 2020 GRI and SASB                                                         Some images in this report feature unmasked employees who are not maintaining 6 feet of
                                                                                                                                                                   physical distance. These photos were taken prior to the beginning of COVID-19 impacts, which
IS SUED: OCT. 202 1   disclosure indices and tables on                                                                                                 began in mid-March, 2020.
Reducing Harm and Preventing Underage Use - 2020-2021 Corporate Responsibility Progress
Moving Beyond Smoking : A Note from Billy Gifford

                      A lot has changed in the world and our industry: the role of science in public policy has emerged as a key theme from the
                      pandemic, and we know that social equity must factor into all the work we do.
                      Despite the upheaval over the past year, at Altria we’ve remained laser-focused on our Vision to responsibly lead the transition of           "In order to continue making
                      adult smokers to a smoke-free future. Our teams have continued their commitment to Moving Beyond SmokingTM by deepening
                      their understanding of adult tobacco consumer preferences, expanding the awareness and availability of our smoke-free product
                                                                                                                                                                     progress, I believe we need
                      portfolio and amplifying our voice on harm reduction within the scientific and public health communities.                                        to address four key areas:
                      I’m optimistic about the future for tobacco harm reduction in the U.S. I see signs of progress every day.
                                                                                                                                                                   misperceptions about nicotine,
                        ƒ Scientists at the Food and Drug Administration (“FDA”) are reviewing and deciding thousands of applications for novel
                          tobacco products. FDA is also reviewing several modified-risk tobacco product (or “MRTP”) applications, which would allow                   equitable harm reduction
                          manufacturers to communicate critical, science-based information to adult smokers about less harmful products.
                        ƒ We hear more voices in public health coming out in support of harm reduction policies. In fact, 15 tobacco control experts – all
                                                                                                                                                                     for adult smokers, scientific
Reducing                  former presidents of the Society for Research on Nicotine and Tobacco – published an article in August 2021 recognizing the                    engagement between
the Harm of               benefits of e-vapor products.
                        ƒ Data from the National Youth Tobacco Survey suggests that underage e-vapor use, while still high, shows signs of decline.
                                                                                                                                                                     industry and public health,
                          Underage usage rates for traditional tobacco products remain at historical lows and, in the U.S., the minimum legal age to                  and underage tobacco use
                          purchase any tobacco product is now 21, which we supported.

                        ƒ More states are considering and implementing lower taxation rates for FDA-authorized lower risk products.
                      In order to continue making progress, I believe we need to address four key areas: misperceptions about nicotine, equitable harm
                      reduction for adult smokers, scientific engagement between industry and public health, and underage tobacco use prevention.
                      First, we must work to correct the deeply held nicotine misperceptions among smokers and key stakeholders. Nicotine, while not
                      benign, is not the primary cause of disease and death from smoking. It’s the combustion of the tobacco. Today, the concept of the                      Billy Gifford
                      risk continuum is embraced by public health, the scientific community, our regulator and many others. However, 73% of people                         Chief Executive Officer
                      either incorrectly believe nicotine is the main substance in cigarettes that causes cancer or are unsure, according to a 2016 study
                      analyzing data from the Health Information National Trends Survey. Left unaddressed, widespread nicotine misperceptions could
Underage Use
                      discourage adult smokers from switching to smoke-free tobacco products that may present lower health risk as compared to
                      combustible cigarettes.
                      We also have a responsibility to ensure that harm reduction is equitable. Equity is fundamental to the harm reduction discussion.
                      A comprehensive approach to harm reduction means that all adult smokers, regardless of background, demographics or financial
                      means, have equitable opportunities to reduce the harms of smoking.
                      I believe we must advocate for real and meaningful scientific engagement between industry and public health. We face an
                      unprecedented opportunity for America to lead the way in shifting millions of smokers away from cigarettes if we follow the science,
                      support innovation and clearly communicate scientifically-accurate information. Tobacco policies should be made by public health
                      experts using the best available science and evidence. This requires more than just well-designed studies or lab work. It requires
                      peer-to-peer engagement, review and open-minded inquiry. We remain committed to rigorous research and engagement on
                      scientific issues. We stand by our science and make it a point to welcome good-faith scrutiny.
                      Finally, a top priority for Altria is remaining vigilant that harm reduction is an off-ramp for adult cigarette smokers and not an on-ramp
                      for underage tobacco use. Youth smoking rates are at historic and generational lows. And we have some promising early data that
                      suggests raising the legal age of purchase to 21 in the U.S., which we actively supported, is helping to drive down underage e-vapor
                      use. We remain committed to playing our role in the important work of preventing underage use.
                      We’ve taken significant steps toward achieving our Vision to transition adult smokers to a smoke-free future. I invite you to learn
IS SUED: OCT. 202 1   more in this report. I am confident that we can make a lot more progress Moving Beyond Smoking.TM
Reducing Harm and Preventing Underage Use - 2020-2021 Corporate Responsibility Progress
The Harm Reduction                                                                 The percentage of U.S. adult
                                                                                                         cigarette smokers has been
                      Opportunity For Adult                                                              declining for more than 50
                                                                                                         years. Today, 14% of adults ages

                      Tobacco Consumers
                                                                                                         18 and over are current smokers
                                                                                                         (34.1 million people), according to   14.0%
                                                                                                         the Center for Disease Control's
                      Today’s adult smokers are seeking new options, including those that reduce         ("CDC") latest National Health
                      risk. In fact, as of September 2020, our research estimates 12 million adult       Interview Survey (2019).
                      tobacco consumers ages 21-54 are interested in switching from cigarettes to a
                      different tobacco product.1 Tobacco companies are responding with innovative,
the Harm of           smoke-free products. The Food and Drug Administration (“FDA”) is evaluating
Tobacco               the science and authorizing those products that have met stringent criteria to
                      demonstrate they are “appropriate for the protection of public health.” And it’s
                      requiring robust post-marketing surveillance to monitor that those products
                      continue to meet authorization standards.
                      Now is the time to realize the opportunity of harm reduction for adult tobacco
                      consumers. Adult smokers are interested in alternatives. Innovative products
                      are available. Science exists to support harm reduction, and there is a robust
                      regulatory framework designed to protect public health.
Preventing            We are building a diversified business model with smoke-free products to
Underage Use          further our harm reduction goals and achieve our Vision to responsibly lead
                      the transition of adult smokers to a smoke-free future. Importantly, we will
                      work within the framework that government, public health, and regulatory
                      bodies have established to communicate about reduced harm choices. And
                      for any tobacco consumer who wants to quit, we offer access to a breadth of
                      information from experts on how to do so successfully.
                      The actions we are taking will create a different Altria – and a different
                      landscape that we believe will benefit today's adult tobacco consumers, our
                      business, and the thousands we employ. That's why we're focused on Moving
                      Beyond SmokingTM by providing more potentially reduced harm alternatives.

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                      Tobacco Landscape 2.0 Study, Q3 2020

Reducing Harm and Preventing Underage Use - 2020-2021 Corporate Responsibility Progress
FDA’s Regulatory Authority Over
                      Tobacco Products
                                                                            Regulatory Pathways for FDA Authorization of New
Introduction          The success of tobacco harm reduction in the
                                                                            Tobacco Products and Modified Risk Claims
                      United States hinges on a regulatory framework
                      that allows manufacturers to provide adult            A new tobacco product is either a product commercially
                      tobacco consumers with potentially reduced-           marketed in the United States after February 15, 2007,
                      risk tobacco products and communicate                 or any modification to a tobacco product commercially
                      accurate health information about them. This          marketed after February 15, 2007. If a predicate product
                      includes the ability to make reduced-harm             existed as of February 15, 2007, applicants can apply via
                      claims about products that are proven to be           the Substantial Equivalence ("SE") regulatory pathway.

                      lower risk than cigarettes. The FDA acts as           PMTA: A premarket tobacco application (“PMTA”) is an
the Harm of           the arbiter of this framework, with authority         application that must be reviewed and authorized by
Tobacco               over nearly all aspects of the manufacturing,         the FDA before a new tobacco product can be legally
                      distribution and marketing of tobacco products.       marketed in the United States.
                      With the FDA’s expansive authority to define          MRTP: A “modified risk tobacco product” is a legal
                      the tobacco marketplace, this agency is in the        designation in the U.S. for a tobacco product that poses
                      leading position to create a mature, regulated        lower health risks to individual users and benefits the
                      tobacco marketplace that successfully reduces         population as a whole when compared to existing
                      the harm caused by cigarettes by:                     products on the market such as cigarettes and for which
                         ƒ timely scientific review and authorization of    the FDA has authorized a modified risk claim.
Preventing                 potential reduced-risk tobacco products;
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                         ƒ monitoring manufacturers' post-market surveillance data and quickly
                           identifying and remediating emerging issues (e.g., uptick in underage use
                           of a newly authorized product);

                         ƒ helping to correct nicotine misperceptions and communicate the relative
                           risks of different products to encourage adult smoker transition to
                           smoke-free products; and

                         ƒ investing in proven tactics to prevent and reduce underage tobacco use.
                      The FDA is the only federal agency with the Congressional mandate,
                      authority and resources to advance tobacco harm reduction. That’s why this
                      agency’s ability to coordinate federal strategy and drive efficient resource
                      allocation towards these efforts is crucial for reducing the death and disease
                      associated with cigarettes.
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Reducing Harm and Preventing Underage Use - 2020-2021 Corporate Responsibility Progress
Nicotine Misperceptions & the “Risk Cliff”                                           The millions of U.S. adult smokers seeking less harmful alternatives to
                                                                                                           cigarettes deserve to be informed about the role of nicotine and the
                      Persistent misperceptions regarding the role of nicotine and the relative risks of   relative risks of different tobacco products. The FDA, the public health
Introduction          different tobacco products prove to be a significant obstacle to adult smokers       community and tobacco manufacturers all have a role to play in addressing
                      switching to potentially reduced-harm products. For example, a study from            misinformation that hinders progress on harm reduction. We believe it
                      the Health Information National Trends Survey found “a high prevalence               is our responsibility to help create the conditions for harm reduction to
                      of incorrect beliefs about the relationship between nicotine and cancer.” 1          succeed – through education, awareness and advocacy – as we build a
                      Specifically, the study found “Most people (73%) either incorrectly believed that    strong portfolio of smoke-free products that satisfy adult smokers’ evolving
                      nicotine is the main substance in cigarettes that causes cancer or were unsure       interests and preferences.
                      about the relationship between nicotine and cancer.” 2
                      While nicotine is addictive, it's the smoke from combustion – not nicotine –
Reducing              that causes smoking-related disease. Smoke from the burning of tobacco
the Harm of           contains thousands of chemicals that are directly linked to smoking-related
                      diseases such as lung cancer, heart disease and emphysema. FDA and                   Higher Combustible
Products                                                                                                     Risk Tobacco                        Risk Cliff Between Combustible
                      other public health authorities agree that there is a broad “continuum of                                                      & Smoke-free Tobacco
                      risk” among tobacco products, with cigarettes at the highest end of that
                      spectrum and complete cessation at the lowest end.3 In fact, when FDA
                      announced its Comprehensive Plan in 2017, then-FDA Commissioner Gottlieb
                      stated FDA policy should be used as a vehicle to “move addicted smokers
                      down that continuum of risk to these less harmful [innovative] products.” 4
                      The then-Commissioner also shared his concerns regarding the widespread
                      misperceptions around nicotine among the American public.
                                                                                                           Lower                                                                          Smoke-free
Underage Use          While there may be differences in risk profiles between specific smoke-free
                                                                                                             Risk                                                                         Tobacco Products
                      products, it will take years of epidemiology to quantify those differences.
                      The body of evidence does, however, indicate a profound risk differential            Adapted from Nutt, et. al. Estimating the Harms of Nicotine-Containing Products Using the MCDA
                      between combustible and smoke-free product categories. Data suggest that             Approach. Eur. Addict Res 2014; 20:218-225.

                      a two-dimensional "Risk Cliff" model is a useful description of the relative risk    1 O'Brien, E. K., Nguyen, A. B., Persoskie, A., & Hoffman, A. C. (2016). U.S. adults' addiction and harm
                      between combusted products (such as cigarettes and cigars) and smoke-free            beliefs about nicotine and low nicotine cigarettes. Preventive Medicine, 96, 94-100. doi:10.1016/j.
                      products (such as moist smokeless tobacco, heated tobacco, e-vapor and oral          2 Id.
                      nicotine pouches).                                                                   3 “… we must acknowledge that there’s a continuum of risk for nicotine delivery. That continuum ranges
                                                                                                           from combustible cigarettes at one end, to medicinal nicotine products at the other.” Remarks by Scott
                                                                                                           Gottlieb, M.D., Protecting American Families: Comprehensive Approach to Nicotine and Tobacco (June
                                                                                                           28, 2017), available at
Appendices                                                                                                 families-comprehensive-approach-nicotine-and-tobacco-06282017.
                                                                                                           4 Id.

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Reducing Harm and Preventing Underage Use - 2020-2021 Corporate Responsibility Progress

the Harm of
                      Reducing the Harm of
                      Tobacco Products

Underage Use


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Reducing Harm and Preventing Underage Use - 2020-2021 Corporate Responsibility Progress
2020 – Q2 2021 Performance Snapshot
                                           Accelerating Investments                                                       Creating the Conditions
                                                                                                             Regulatory & Scientific Engagements in 2020
                      IQOS heated tobacco system
                      • FDA issued a Modified Risk Granted Order                                 59 engagements on the topic                        Engagement Topics

                        authorizing a reduced exposure claim, including                          of tobacco harm reduction and
                                                                                                 regulatory compliance with the FDA
                       “Scientific studies have shown that switching
                                                                                                 and public health stakeholders
                        completely from conventional cigarettes
the Harm of             to the IQOS system significantly reduces                                 28 	external posters and
Tobacco                 your body’s exposure to harmful or                                            presentations
                        potentially harmful chemicals.”                                          23 	scientific and policy
                      • 2020 – Launched in Charlotte, North Carolina;                                 conferences
                        in 2021, added boutique in Northern Virginia 		                          7    panel discussions                 87%
                        (D.C. suburb) and expanded statewide in 		                               16   publications             tobacco products            8%         5%
                                                                                                                                                    Combustible       Agronomy
                        GA, VA, NC and SC                                                                                                         tobacco products
                      • Q2 2021: Marlboro HeatSticks retail sales volume
                                                                                                 Through the first half of 2021,           with elected officials and policy
                         increased by nearly 40% compared to Q1
                                                                                                 181 engagements across 42                 makers on harm reduction for adult
Underage Use                                                                                     states in which Altria has engaged        tobacco consumers*
                                                                                                                                           * Tracking began in 2021
                      On! oral nicotine pouches
                                                                                                                              Supporting Cessation
                      • Full global ownership of on!, acquired remaining 20% interest in Helix
                      • Achieved unconstrained manufacturing
                        capacity for the U.S. market
                      • Submitted Pre-Market Tobacco                                             QuitAssist 2020 site visits –
                        Applications (PMTAs) to FDA for                                          ~339,000; 248% increase
Appendices              on! portfolio                                                            from 2019 baseline
                      • Distribution in ~78,000 retail stores                                   • 2020 Goal: Increase 50%
                         as of December 2020; ~105,000                                             from 2019 baseline
                        as of June 2021                                                            (~97,500 visits)

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Our Strategy
                      & Approach
                      2025 Goals:
                          Accelerate investments in innovation, science and
                          regulatory support for new smoke-free product platforms.

                          Create the conditions for tobacco harm reduction
Reducing                  to succeed through external communications and
the Harm of               engagement, science and advocacy.

                         We believe reducing harm for adult smokers can only be successful
                         if these consumers find potentially reduced-risk products
                         “satisfying” – a term with a wide-ranging definition based on the
                         diversity of adult smokers’ interests. Our strategy is to deliver a
                         compelling portfolio of smoke-free products that offer a range of
                         satisfying product choices for adult smokers and to responsibly lead
Preventing               them to these alternatives.
Underage Use

                      Our Product Platforms
                      Our companies focus on developing, manufacturing and marketing
                      products and brands that meet three important consumer expectations:
                         ƒ superior sensory experiences and nicotine satisfaction;

                         ƒ reduced health risks and accurate relative risk information; and
                         ƒ the ability to avoid social friction associated with cigarettes, such as
                           smoke odor, ash and social isolation.

                      Our portfolio approach expands choice for adult tobacco consumers
                      across three of the most promising smoke-free product platforms with the
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                      potential to reduce harm: oral tobacco, heated tobacco and e-vapor.
Smoke-Free                                                                    What is its harm reduction
                                                                 Our Products                                       potential?                                                                      Regulatory Progress
                              Platform                                                                         (which must be determined by FDA)
                           Oral Tobacco –               U.S. Smokeless Tobacco                       From a scientific perspective, based on decades             U.S. Smokeless Tobacco Company submitted an MRTP application for Copenhagen Snuff in
                           Smokeless                    Company is the most profitable               of epidemiology, it is now accepted by most                 March 2018. The application contained the results of research that we believe demonstrates
                           Tobacco                      moist smokeless tobacco                      public health researchers that smokeless tobacco,           the modified risk claim we’re seeking – “IF YOU SMOKE, CONSIDER THIS: Switching
                                                        (“MST”) company, anchored by                 while not safe, is a far less risky way to use nicotine     completely to this product from cigarettes reduces risk of lung cancer” – is supported by
                                                        Copenhagen, the leading MST                  than cigarette smoking. According to our analysis           science and understood by adult tobacco consumers.
                                                        brand, Skoal, Red Seal and Husky.            of government data, when looking at all causes of
                                                                                                                                                                 In February 2019, an FDA scientific advisory committee reviewed our research and
                                                                                                     mortality, we believe smokeless tobacco use is at
                                                                                                                                                                 overwhelmingly supported the scientific accuracy of our proposed claim. More than two
                                                                                                     least 96% less risky than cigarette smoking.1
                                                                                                                                                                 years later, the Copenhagen Snuff MRTP application is still under review by the FDA. We
                                                                                                                                                                 await FDA’s decision on whether it will authorize the modified risk claim for consumer

the Harm of
                           Oral Tobacco –               On! has a premium portfolio of               Because on! products are tobacco leaf free,                 Helix submitted PMTAs for the on! portfolio of products – including multiple varieties and
                           Nicotine                     product offerings across a variety of        they have lower levels of harmful and potentially           nicotine strengths – in May 2020. They are still in review.
                           Pouches                      flavors and nicotine strengths. On! is       harmful constituents than combustible tobacco
Products                                                                                                                                                         Separately, Helix intends to file a Modified Risk Tobacco Product Application for on!.
                                                        widely distributed in over 100,000           products and traditional oral tobacco products
                                                        stores that cover over 80% of total          such as snus and MST. We have included this
                                                        U.S. oral tobacco volume.                    information in our PMTAs filed with FDA for review.

                           Heated                       IQOS is the only FDA-authorized              PMI’s research demonstrates that IQOS reduces               In July 2020 the FDA issued a Modified Risk Granted Order for the IQOS 2.4 Tobacco
                           Tobacco                      heated tobacco system. In April 2019,        levels of 18 harmful and potentially harmful                Heating System, including three variants of HeatSticks. FDA has authorized the
                           Products                     the FDA authorized the IQOS PMTAs            constituents identified by the FDA by over 90%              marketing of this version of the IQOS Tobacco Heating System with a reduced
                                                        as appropriate for the protection            and reduces levels of 15 known carcinogens by               exposure claim, including that switching completely from conventional cigarettes to
Preventing                                              of public health. We have exclusive          more than 95% versus conventional cigarettes.               the IQOS system significantly reduces your body’s exposure to harmful or potentially
Underage Use                                            rights to commercialize IQOS and                                                                         harmful chemicals.
                                                        three Marlboro HeatStick variants –
                                                                                                                                                                 In December 2020, the FDA authorized commercialization of the next generation of the
                                                        one non-menthol and two menthol
                                                                                                                                                                 IQOS tobacco heating system device, IQOS 3.0, in the U.S. FDA is currently considering
                                                        – in the U.S. through our agreement
                                                                                                                                                                 whether the previously-authorized modified risk claim can also be used with the IQOS
                                                        with Philip Morris International (“PMI”).
                                                                                                                                                                 3 device.

                           E-Vapor                      We participate in the e-vapor                E-Vapor heats e-liquid consisting of tobacco                In July 2020, JUUL submitted a PMTA for the JUUL System, including the JUUL Device and
                                                        space through our 35% economic               derived nicotine, humectants and flavors and                JUULpods in Virginia Tobacco and Menthol flavors at nicotine concentrations of 3.0% and
                                                        interest in JUUL, the leading e-vapor        does not produce many of the harmful and                    5.0% As part of Altria’s investment, ALCS provided regulatory and scientific support for those
                                                        manufacturer.                                potentially harmful chemicals that combustible              submissions. FDA’s regulatory decision is pending.
                                                                                                     cigarettes do. The National Academies of
                                                                                                     Sciences, Engineering and Medicine completed
Appendices                                                                                           a comprehensive study in 2018 on health
                                                                                                     effects of e-cigarettes with conclusive evidence
                                                                                                     that completely substituting e-cigarettes for
                                                                                                     combustible tobacco cigarettes reduces users’
                                                                                                     exposure to numerous toxicants and carcinogens
                                                                                                     present in combustible tobacco cigarettes.

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                          Fisher MT, Tan-Torres SM, Gaworski CL, Black ML and Sarkar MA. Smokeless tobacco mortality risks: an analysis of two contemporary nationally representative longitudinal mortality. Harm Reduction Journal. 2019; 16:27
Tobacco Consumer Insights
                      Based on the regulatory framework in place and our deep understanding
Introduction          of U.S tobacco consumer preferences and behaviors, we believe we can
                      accelerate the pace of harm reduction over the next 10 years. Consumer
                      dynamics support this belief and our opportunity. First, our data indicate
                      purchases for consumers ages 21 through 39 look fundamentally different
                      from older consumers. One-third of tobacco consumers age 21 to 29 are
                      exclusive smoke-free product users, the highest percentage of exclusive use
                      across age cohorts.
                      We also believe it’s critically important to understand the consumer
                      motivations behind their tobacco product selection. Based on our research,
the Harm of           adult tobacco consumers consider reduced social friction and the possibility
Tobacco               of reduced harm as important product features. Additionally, smoke-free
                      products interest both male and female tobacco consumers, although the
                      specific purchase drivers vary by gender, ethnicity, socio-economic status
                      and age. We also know that many consumers are open to using smoke-free
                      products but have not found the right product to meet their needs. As we
                      pursue our Vision, we want to make sure that all adult smokers, regardless
                      of background, demographics or financial means, have equitable access to
                      products, information and opportunities that may reduce their health risk.

Preventing            As tobacco consumer preferences continue to evolve, we will continue to use
Underage Use          tobacco consumer insights and science to inform our smoke-free product
                      development, regulatory engagement and marketing plans

                                One-third of tobacco consumers age 21 to 29
                             are exclusive smoke-free product users, the highest
                               percentage of exclusive use across age cohorts.


IS SUED: OCT. 202 1

Science, Research & Development
                                                                                                                      E    M     P    L       O   Y   E   E       S   P       O     T   L    I   G    H    T
                      Science is at the core of Altria’s approach to tobacco harm reduction. Our
Introduction          investment in research and technology supports our smoke-free product                            Advancing the Science;
                      development and the science needed for product applications submitted to                         Making a Difference
                      the FDA.
                                                                                                                       Maria Gogova
                      Our regulatory science team, led by our Chief Scientific Officer, generates the                  Vice President Regulatory Sciences
                      scientific evidence needed to demonstrate that smoke-free tobacco products                       and Chief Scientific Officer, Altria
                      result in lower exposure to harmful and potentially harmful constituents and/                    Client Services
                      or are lower risk when compared to conventional cigarettes. We’ve been at
                                                                                                                       Science drives our efforts to realize our
                      the forefront of developing new methodologies to assess the health impact of
                                                                                                                       Vision to responsibly lead the transition
Reducing              potentially reduced-risk tobacco products.
                                                                                                                       of adult smokers to FDA-authorized,
the Harm of
                      We follow a rigorous scientific framework for evaluating potentially reduced-risk                smoke-free products. To lead these
Products              tobacco products and supporting product applications to FDA. This framework                      efforts, we announced Maria Gogova as           + Hear more on this topic
                                                                                                                                                                            from Dr. Gogova
                      enables us to evaluate tobacco products from product design to individual                        Altria's Chief Sicentific Officer. Dr. Gogova  in this video on
                      product risk assessments to overall population impact.                                           plays critical roles in shaping Altria's
                      Our regulatory affairs team applies this rigorous framework to substantiate                      pursuit of harm reduction and representing Altria in the scientific and public
                      candidate products demonstrating protection of public health in order to bring                   health community.
                      new reduced-risk products to adult tobacco consumers.

Underage Use                            Constituent Reduction                                    Individual Risk Reduction                                    Population Harm Reduction

                            Product Design &          Chemical & Physical              Toxicology &                 Studies in Adult                  Perception &                  Risks & Benefits to
                                Control                Characterization              Risk Assessment                Human Subjects                 Behavior Assessment               the Population

                        • Ingredients and material • FDA's defined list of        • Toxicological and             • Abuse liability               • Risk perceptions and          • Population modeling
                          qualification              harmful and potentially        risk assessment of              assessment                      likelihood of use             • Post-market surveillance
                        • Manufacturing standards harmful constituents              ingredients and other         • Short- and long-term          • Actual use studies
                          and quality controls     • Other targeted                 constituents                    switching studies             • In-market studies
                        • Product stability          constituents                 • Biological activity (in-vitro • Cross-sectional studies
                                                                                                                                                  • Product instruction and
                                                     (e.g., metals)                 and in-vivo studies)
Appendices              • Failure mode and hazard                                                                                                   comprehension studies
                          assessments              • Non-targeted analysis
                                                   • Physical assessment (e.g.,
                                                     particle size, aerosol)

                                            The Product                                           Exposure & Health Risk                                       Impact on the Population
IS SUED: OCT. 202 1

We are committed to ongoing, transparent communication of the results of our
                      research. We regularly update Altria’s Science website with data we present or   E   M    P    L   O    Y    E    E       S   P    O    T    L   I   G    H   T
                      publish, and we actively engage with members of the scientific community and
                      share our research through conferences, meetings and other forums.               The Critical Importance of
                                                                                                       Engagement with the
                      Insights-Driven Product Development                                              Public Health and Scientific
                      Altria’s scientists, engineers, product developers and consumer researchers      Communities
                      are accelerating our investments to build unique intellectual property and
                      a robust pipeline of differentiated, innovative smoke-free tobacco products.     Greg Wilson
                      We are combining our deep knowledge of adult smokers, data analytics and         Vice President Regulatory
                      behavioral science to better understand what would motivate and then help        Engagement, Altria Client Services
                      adult smokers transition to smoke-free products.                                 Achieving our Vision requires engaging
the Harm of           Meanwhile, countless employees across our organization – from procurement        with the scientific and public health
Tobacco               and manufacturing, to marketing and sales – are working to gain new insights     communities on our science and
Products                                                                                                                                                 + Read Greg's full story
                      that will support future product development, as they work to bring our          research. While some seek to exclude
                      existing, premium smoke-free brands to market, and support adult smokers’        the tobacco industry from these
                      transition to a smoke-free future                                                opportunities, we believe successful
                                                                                                       harm reduction for adult tobacco consumers requires our ongoing
                      For instance, over the recent decades we have maintained a robust adult
                                                                                                       commitment to the scientific principles of transparency, unbiased data
                      tobacco consumer database and have developed unique consumer
                                                                                                       review, direct researcher engagement and open dialogue with
                      connections through loyalty programs. We are enhancing these tools by
                                                                                                       all stakeholders.
                      working with our retail trade partners to increase the depth and breadth
Preventing            of point-of-sale purchase data. These tools enable deeper understanding
Underage Use          of purchasing behaviors and consumer journeys that inform product
                      development to best meet the needs of adult tobacco consumers.


IS SUED: OCT. 202 1

Accelerating Investments in Oral
                                                                                                      Communicating about the Health Effects of Tobacco Use
                      Nicotine Pouches and Heated Tobacco
                                                                                                      Congressionally-mandated health warnings have been on cigarette
                                                                                                      packs since 1966 and cigarette brand advertising since 1972. Similar
                                              On! Progress 2019 – 2021
                                                                                                      warning requirements have been in place since 1986 for smokeless
                                                                                                      tobacco products and since 2000 for the cigars John Middleton sells.
                               ~78,000 stores to 105,000 stores                                       Additionally, our tobacco companies provide certain reports, such as
                                   (2020, 5x 2019)                       (Q2 2021)                    ingredient disclosures and information about harmful or potentially
                                                                                                      harmful constituents in tobacco products to various federal and state
                                                                                                      agencies, including the FDA.
                                                                                                      For more information about product ingredients and how our tobacco
the Harm of
                                                                                                      companies communicate about the health effects of their products
Tobacco                                                                                               visit Philip Morris USA's, U.S. Smokeless Tobacco Company's and
Products              Oral Nicotine Pouches: On!                                                      John Middleton's corporate websites.
                      In April 2021, we announced another important milestone on Altria’s journey.
                      We acquired the remaining 20% global interest in our Helix subsidiary, for
                      full global ownership of the novel oral nicotine pouch product, on! Since
                      August 2019, Helix has been focused on accelerating availability of on! for
                                                                                                      E   M    P   L    O   Y    E   E       S    P   O    T    L   I   G    H   T
                      adult tobacco consumers. There are now approximately one million U.S. oral
                      nicotine pouch consumers and we’re excited about Helix’s progress to meet       Our Science-based Approach
                      the growing demand.                                                             to New Tobacco Products
                      In the second quarter of 2021, Helix achieved unconstrained manufacturing       Kurt Gottfried
Underage Use
                      capacity. By the end of June 2021, on! was available in approximately           Director Regulatory Affairs,
                      105,000 retail stores, representing 80% of total U.S. industry oral tobacco     Altria Client Services
                      volume and 70% of U.S. cigarette volume. On! can be purchased through           We follow a rigorous scientific framework
                      its premium-branded website with a robust age verification platform – the       for evaluating potentially reduced
                      same comprehensive age verification practice we employ for all our tobacco      risk products in our applications that
                      product branded websites. On! is also available for purchase on third-party     enables us to assess them from design,
                      e-commerce websites. For those third-party vendors with which we have           to individual risk, to overall population
                      contractual agreements, we require age verification prior to purchase.          impact. I never cease to be amazed by              + Read Kurt's full story
                      Helix filed PMTAs for the on! portfolio in May 2020, which we believe makes a   the sheer brain power of our scientists                on
                      compelling case to FDA that the broad on! product offering is appropriate for   and researchers. From Analytical and
                      the protection of public health. For example, our research shows that when      Population Sciences to Clinical and Pre-Clinical, we have a world class team
                      comparing the levels of harmful/potentially-harmful constituents (“HPHCs”),     that's laser focused on moving the science of harm reduction forward and
                      the on! mint-flavored pouches containing 4 mg of tobacco-derived nicotine       using those insights to meet adult smokers where they are with satisfying,
                      have significantly lower HPHCs as compared to General snus smokeless            smoke-free alternatives.
IS SUED: OCT. 202 1

tobacco products, which have been granted both market orders and
                      authorization to be marketed with a reduced risk claim.                            E   M   P    L   O    Y    E     E         S      P     O      T     L     I     G     H      T
                      The on! PMTA also provides strong evidence of its appeal to adult smokers. In
Introduction                                                                                             Our Focus on Responsibility
                      a study we conducted, adult smokers and dippers used on! for 6 weeks after
                                                                                                         Before and After FDA
                      a screening and trial period. These consumers were provided the product
                      in various nicotine levels and flavor varieties. At the end of the study, more
                      than a quarter of the adult smokers completely switched to on! products and        Patty Miller
                      over 70% of the adult dippers did the same. Additionally, we observed that         Managing Director Premarket
                      women were just as likely as men to switch to on! at the end of the study.         Tobacco Applications, Altria Client
                      While these results must be considered in the context of study limitations, the    Services
                      data illustrate the promise offered by on!. The research supports our belief
                                                                                                         We work in a highly regulated industry.
Reducing              that various nicotine levels and flavor options are important to adult tobacco
the Harm of                                                                                              Having smoke-free products for
                      consumers looking to switch to potentially less harmful products.
Tobacco                                                                                                  cigarette smokers to switch to is key
Products              Our in-market retail data support the findings from our PMTA research,                                                             + Read Patty's full story
                                                                                                         to our Vision. But we can't have those
                      showing that on! continues to primarily source from adult smokers and              products on the market, accessible to
                      dippers. We also continue to learn. Female smokers are more engaged with           adult smokers who want to switch to
                      oral nicotine pouches than with traditional moist smokeless tobacco, making        smoke-free products, until we get approved by our regulator. It's necessary
                      up approximately 25% of oral nicotine pouch consumers as opposed to                to get FDA permission to be on the market and it's necessary to satisfy the
                      only 5% of MST consumers. With enhanced distribution and in-store visibility,      post-authorization compliance requirements to stay on the market.
                      consumers of competitive oral nicotine pouch brands are showing increasing
                      interest in on!. We believe its unique packaging further differentiates on! from
Preventing            traditional smokeless tobacco and competitive oral nicotine pouch products
Underage Use
                      and has broader adult tobacco consumer appeal.
                      We’re excited about the PMTA research and marketplace results. And, as we                                       Smokers interested in switching
                      await FDA’s decision related to the Helix PMTA submissions, our regulatory
                      and science teams are now planning a modified risk application for on!.                 55%                   to a product based on an authorized
                                                                                                                                           reduced exposure claim
                                                                                                                                        Source: Altria Client Services research study, February 2021


IS SUED: OCT. 202 1

Adult Smoker Awareness, Engagement & Trial of IQOS
                      Heated Tobacco: IQOS
                                                                                                        Our IQOS consumer journey framework focuses on the adult smoker
                      IQOS has been the most successful next generation product for transitioning       from awareness to switching, responsibly. At every stage, teams of trained
                      adult smokers globally, and, according to PMI, approximately 14.7 million adult   Experts begin by taking steps to limit IQOS's reach to adult smokers
                      smokers have stopped smoking and switched to IQOS.                                21+. Read more about IQOS's responsible marketing practices in the
                      In April 2019, the FDA authorized the sale of the IQOS heated tobacco system      Underage Prevention chapter of this report.
                      in the U.S. market. After evaluating the submitted PMTA, the FDA determined
                      that marketing these products is appropriate for the protection of public
                      health.                                                                           We're using multiple channels to generate adult smoker awareness for
the Harm of
                                                                                                        IQOS, including paid media, communications using our adult tobacco
                      On July 7, 2020, the FDA also granted authorization to use a modified risk
Tobacco                                                                                                 consumer database, and retail touch points at both our boutiques and
Products              claim on the IQOS Tobacco Heating System 2.4 with three HeatStick variants.
                                                                                                        trade partner stores.
                      Specifically, FDA authorized the marketing of the IQOS Tobacco Heating
                      System with the following reduced exposure claim:                                 Engagement & Trial
                        Available Evidence to Date:                                                     We have a number of unique consumer touch points to drive
                         ƒ The IQOS system heats tobacco but does not burn it.                          engagement and trial. Our flagship boutiques and nearby mall kiosks are
                                                                                                        designed to generate adult smoker awareness and provide them with the
                         ƒ This significantly reduces the production of harmful and potentially         opportunity to engage fully with the brand. IQOS mobile infrastructure,
                           harmful chemicals.                                                           which includes corners and education vehicles, allows the IQOS team
Preventing                                                                                              to meet the adult smokers in different locations, such as at meet-up
Underage Use             ƒ Scientific studies have shown that switching completely from
                           conventional cigarettes to the IQOS system significantly reduces your        locations or outside retail stores. IQOS Corners, which are set up within
                           body’s exposure to harmful or potentially harmful chemicals.                 select retail stores, engage adult smokers where they normally purchase
                                                                                                        their cigarettes. Finally, we have a network of over 500 trained IQOS
                      The FDA’s review and authorization of a reduced exposure claim for IQOS           Experts who can provide guided trials across these and other locations.
                      are important milestones for this heated tobacco system to realize its harm
                                                                                                        Through our marketing efforts, we've found that more than half of adult
                      reduction potential for adult smokers.
                                                                                                        smokers who engaged with IQOS continue to the guided trial process.
                      While many smokers recognize that IQOS addresses many of the social               We know that guided trial is critical for explaining how to use the IQOS
                      friction experiences they have with smoking, such as no ash and less odor,        device, its reduced exposure MRTP claim, its non-health benefits and its
                      they have low awareness of reduced exposure to HPHCs when smokers                 taste profile.
                      completely switch from cigarettes. Last July, upon the FDA’s Modified Risk
                      Grant Order, Philip Morris USA ("PM USA") quickly began to communicate the
                      reduced exposure claim through its digital engagement platforms, direct mail,
                      at boutiques and mobile retail.

IS SUED: OCT. 202 1

We believe smokers’ understanding of the harm-reduction benefits of smoke-           We’ve learned that providing flexible options for smokers to engage with
                      free products relative to cigarettes will be an important factor in their decision   the product was especially critical during the pandemic. Prior to boutiques
                      to switch. And PM USA continues to strongly and responsibly reinforce this           closing in March 2020, more than half of device purchases were made from
                      important message with smokers.                                                      a boutique. As stores reopened in June, device purchases shifted primarily to
                                                                                                           mobile retail, accounting for nearly two-thirds of device purchases through
                      In November 2020, PM USA began a national
                                                                                                           the end of the year. These options allowed smokers to engage with our
                      digital campaign to grow adult smoker
                                                                                                           teams in convenient and socially distant settings. Further, PM USA developed
                      awareness of the IQOS system and its reduced
                                                                                                           online guided tutorials and mobile video chat capabilities to support age-
                      exposure designation. The digital advertising
                                                                                                           verified smokers in their IQOS journeys.
                      was served to adult smokers whose age is
                      verified against public or government records
                      prior to receiving the ad. This campaign was                                                                                 Expansion
Reducing              expanded through print advertising in 2021.
the Harm of
                      These campaigns are executed in compliance                                                                                          HeatSticks grew across all
Products              with all regulatory and legal requirements,                                                                                         metro markets in 2020:
                      including the FDA’s review and post-marketing                                                                                        ƒ Richmond, VA
                      surveillance requirements, as well as our                                                                      Richmond, VA
                                                                                                                                                           ƒ Charlotte, NC
                      marketing policies – with the intention to
                                                                                                                                                           ƒ Atlanta, GA
                      minimize reach to unintended audiences.
                                                                                                                                   Charlotte, NC
                      PM USA worked with Altria Group Distribution Company’s sales force to
                      expand product availability for adult smokers. In 2020 and the first half of 2021,
                                                                                                                              SC                      ƒ Statewide expansions of
                      PM USA:
                                                                                                              Atlanta, GA                               HeatSticks
Underage Use           ƒ launched IQOS and Marlboro HeatSticks in two new metro markets and                                                             and devices across GA, VA, NC
                         across four states;                                                                                                            and SC in 2020
                       ƒ developed creative digital tools to enhance consumer engagement;                                                             ƒ Expanded into the Northern VA
                                                                                                                                                        metro market in Q2 2021
                       ƒ communicated with smokers using the FDA-authorized reduced exposure
                         claim about the benefits of switching completely from cigarettes; and
                       ƒ provided extensive post-marketing information to FDA related to its
                         marketing, advertising, consumer research and related matters.
                                                                                                                                               40% of IQOS purchases sourcing
Appendices            PM USA continues to maximize the product’s organic growth potential by focusing                                            from competitive smokers
                      first on densely populated metro areas, and then expanding outwards as the user                                                                 Source: CAGNY

                      base grows. As IQOS expands distribution, PM USA is evolving its plans based on
                      learnings from the lead markets.
                                                                                                                   40%                           Marlboro HeatSticks Q2 total
                                                                                                                                            retail sales volume increased nearly
                                                                                                                                                 40% compared to Q1 2021
IS SUED: OCT. 202 1                                                                                                                                                   Source: Q2 Earnings

As we have expanded into new markets and channels, we have learned that
                        On December 7, 2020, the U.S. FDA authorized commercialization of the        some smokers are hesitant to purchase IQOS based on the initial cost of a
                        next generation of the IQOS tobacco heating system device, IQOS 3, in        device and HeatSticks options, particularly in the indirect retail channel where
                        the U.S. IQOS 3 offers several enhancements to the IQOS 2.4 currently        we have the broadest reach to a diverse smoker population. To address these
                        being sold in select U.S. markets, including longer battery life, faster     concerns and encourage product trial, PM USA introduced more device
                        recharging time, a side opening mechanism, and magnetic closure.             purchasing options. Initially launched in Charlotte, a five-pack option provides
                                                                                                     a lower cost choice for smokers who are hesitant about buying a ten-pack
                                                                                                     bundle. PM USA also established a lending program for consumers to try
                                                                                                     the IQOS device for two weeks at a low introductory cost prior to making
                      As we pursue our Vision, we                                                    the decision to purchase. Purchases from these new bundle options and the
                      want to make sure that all                                                     lending program accounted for over 60% of Charlotte device sales in 2020
Reducing              adult smokers, regardless of                                                   and the lending program has accounted for approximately 10% of sales
the Harm of           background, demographics or                                                    across all markets, with an impressive trial to purchase rate of 87% through
Tobacco                                                                                              Q2 2021. We are encouraged by the results. And we believe these options will
Products              financial means, have equitable
                      opportunities to reduce the                                                    make IQOS more affordable for a broader range of adult smokers seeking a
                      harm of smoking. For example,                                                  reduced harm alternative.
                      IQOS is focused on equitable                                                   With a particular focus on the four states where IQOS is currently available
                      tobacco harm reduction. One                                                    and in consideration of future expansion, PM USA intends to maximize its
                      of the main drivers of initial                                                 first mover advantage while responsibly positioning the U.S. heated tobacco
                      awareness of IQOS across                                                       category for long-term growth and profitability.
                      all demographic groups is
                      hearing about the product
Underage Use          from a fellow smoker. Our IQOS
                                                                                                        In May 2021, an International Trade Commission (ITC) Administrative Law
                      Experts over-index among the
                                                                                                        Judge (ALJ) found that the IQOS system infringes two plaintiff's patents
                      Black and Hispanic population
                                                                                                        and recommended imposition of a ban on the importation of the IQOS
                      compared to the markets we
                                                                                                        system. In July 2021, the ITC accepted review of the ALJ's findings and
                      operate in, which has led to an
                                                                                                        recommendations on certain issues, including issues related to the
                      even higher word-of-mouth
                                                                                                        patent infringement claims and potential remedies. On September 29,
                      awareness among non-white smokers. Another critical component of these
                                                                                                        2021, the ITC issued an order imposing an importation ban on the IQOS
                      awareness-building activities is developing an understanding and credibility
                                                                                                        device and Marlboro HeatSticks into the U.S., and a cease and desist
                      of the reduced exposure MRTP claim. We have translated the MRTP claim to
                                                                                                        order on the marketing and sale of product already imported into the
                      Spanish to help Spanish-speaking smokers have an accurate understanding of
Appendices                                                                                              U.S. The ITC’s order is subject to review by the Administration’s U.S. Trade
                      the science behind IQOS.
                                                                                                        Representative, which is expected to last 60 days. PM USA expects to
                                                                                                        continue marketing and selling IQOS in its current geographies through
                                                                                                        this 60-day review period, and is working with PMI on contingency plans
                                                                                                        and considering legal options.
IS SUED: OCT. 202 1

Creating the Conditions for Harm                                                  in transforming this industry for the better – including our shareholders,
                                                                                                        employees, business partners, communities, and adult consumers.
                      Reduction Success Through Advocacy &
                                                                                                        We also regularly engage with the scientific, public health, and regulatory
                      Engagement                                                                        communities through face-to-face meetings, regulatory filing, publishing in
                                                                                                        scientific journals and participating at scientific conferences where we present
                      A key strategy for achieving our Vision is to lead in the external environment    our research. We listen to and welcome feedback on our work.
                      through communications, engagement and science-based policy and
                      regulatory solutions. We believe this is an important aspect of creating          Altria's Vision sets the direction for all our legislative and regulatory efforts. For
                      the conditions for making progress in harm reduction for adult tobacco            us, Moving Beyond SmokingTM means advocating for a harm reduction future
                      consumers.                                                                        where the entire industry is operating within science-based federal regulation,
                                                                                                        where underage tobacco use continues to decline, and where adult smokers
                      This commitment to Altria’s Vision means engaging actively and responsibly        who don't quit are switching to FDA-authorized less harmful products.
Reducing              with policy makers at all levels of government. We engage to share who
the Harm of
                      we are, where we are headed, and the vital role legislation and regulation        Transformational changes in recent years have made this future more possible
Products              play in shaping the future of our industry. Participating in the democratic       than ever. Today we see:
                      process is vital to our business and to the many stakeholders with an interest     ƒ Generational lows in underage use of all traditional tobacco products.

                                                                                                         ƒ A national minimum age of 21 driving underage use down further for all
                                                                                                           product categories.
                        E   M    P    L   O    Y   E    E      S   P    O    T   L   I   G    H   T
                                                                                                         ƒ Scientists agreeing that while nicotine is addictive, it’s smoke that causes
                         Engaging with Policy Makers                                                       most tobacco-related harm.
                         on the Science of Potentially-
                         Reduced Harm Tobacco                                                            ƒ Manufacturers innovating new, smoke-free products with the potential to
Underage Use                                                                                               reduce harm.
                         Phil Park
                         Vice President Government Affairs,                                              ƒ The FDA regulating the industry and authorizing reduced harm products
                         Altria Client Services                                                            based on science.
                         The issue of tobacco harm reduction                                            Our goal in our engagement with regulatory and policy stakeholders is to
                         and the FDA’s regulatory framework                                             advance our Vision by supporting policies and regulations necessary for harm
                         for tobacco products is complex. It’s                                          reduction to succeed.
                         my team’s job to engage with federal
                         policy makers to talk about what              + Read Phil's full story on
                         tobacco harm reduction is, educate
                         them about innovative new tobacco
                         products, and the process by which FDA will authorize them – that is to say,
                         helping introduce FDA-reviewed tobacco products, with the potential for less
                         harm, to adult tobacco consumers.
IS SUED: OCT. 202 1

Key Legislative & Regulatory Priorities
                                                                                                    Encouraging FDA's Role as Regulator of Ingredients & Flavors
                                                                                                    Legislators engaged on tobacco issues should start with understanding
                                                                                                    the central role the FDA plays in regulating the industry – and the scientific
                                                                                                    capabilities and extensive resources it applies to the job.

                                                                                                    Correcting Nicotine Misperceptions
                                                                                                    FDA should commit resources and expertise to correct the deeply entrenched
                                                                                                    public misperceptions regarding the health risks of nicotine.

Reducing                                                                                            Urging Foundational Rules for SE, PMTA, and MRTPA
the Harm of
Tobacco                                                                                             Congress established specific pathways to market for new or modified
Products                                                                                            tobacco products and a process for seeking FDA authorization to make
                                                                                                    modified risk claims.

                                                                                                    Supporting FDA-Authorized, Smoke-Free Flavored Products as Critical
                      Supporting Science-Based FDA Regulation                                       to Harm Reduction
                      Harm reduction can’t succeed without effective, comprehensive federal         Published data demonstrate that flavors are critical in adult smokers’ trial and
                      regulation of tobacco products.                                               adoption of smoke-free products.

Underage Use          Advocating for Legislation Preventing Underage Use                            Opposing Ban on Menthol Cigarettes or Flavored Cigars Not Supported
                                                                                                    by Science and Evidence
                      Harm reduction starts with preventing underage use of all tobacco products.
                                                                                                    We believe that the better way to reduce harm is to offer adult smokers
                      Endorsing Tax Policy That Gives Less Harmful Products a                       appealing smoke-free tobacco products such as IQOS and on! instead of
                      Better Chance                                                                 imposing prohibition-type bans that rarely work and have significant collateral
                      Tax classifications written many decades ago make little sense today given
                      the science showing major risk differences between combustible and non-
                                                                                                    Promoting Access to Better Choices for Adult Smokers 21+
                      combustible products.
                                                                                                    Adult smokers who don’t quit should be encouraged to switch to FDA-
                      Protecting the Legal, Regulated Market from Illegal Trade                     regulated less harmful products.

                      A thriving underground market in tobacco products is a serious threat to
                      effective regulation and public health.                                          To learn more about our leadership in the external environment and
                                                                                                       how we communicate our Vision to stakeholders in the scientific,
                                                                                                       public health and regulatory communities, visit the Communications
                                                                                                       & Engagement page of the Altria Science website.
IS SUED: OCT. 202 1

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