Reducing Harm and Preventing Underage Use2020–2021

Corporate Responsibility Progress

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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 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.

Drive Responsibility Through Our Value Chain

Support Our People &

Communities

Engage & Lead

Responsibly

Reduce Harm of Tobacco

Products

Protect the

Environment

Prevent Underage

Use

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INTRODUCTION BOOKMARK

Drive Responsibility Through Our Value Chain

Altria’s Responsibility Focus AreasENVIRONMENTAL SOCIAL GOVERNANCE

Protect the

Environment

Scope Scope

Most of Altria’s net revenues come from the sale of its tobacco operating companies’ products. The use of tobacco products, however, is a significant public health concern, as underscored by the extensive public health authority information on tobacco and health.

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 for smoke-free alternatives, innovation and an appropriate regulatory framework, we have the opportunity to make more progress on harm reduction in the next 10 years than we have in the past 50 years.

The concepts of tobacco harm reduction and underage tobacco prevention are directly linked, and we remain steadfastly committed to both as we lead the adult smoker transition to smoke-free products. We also recognize that our portfolio now includes a broad range of products intended for adults.

• Lead the industry in preventing underage use of products intended for adults 21 and over.

• Contribute to the healthy development of youth ages 12 – 18.

• 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 decided to quit.

Why it Matters Why it Matters

2025 Goals

2025 Goals

Engage & Lead

Responsibly

Drive Responsibility Through Our Value Chain

Support Our People &

Communities

Reduce Harm of Tobacco

Products

Prevent Underage

Use

Adult smoker transition to smoke-free products External conditions for tobacco harm reduction success Cessation support

Responsible marketing Underage access prevention Positive youth development

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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

Sustainability Accounting Standards Board (SASB). You can find our 2020 GRI and SASB

disclosure indices and tables on Altria.com.

What’s in this report?In 2020, we completed a materiality assessment that identified key

responsibility focus areas for our businesses. In order to make progress

toward our Vision through 2030, we are committed to Reducing the Harm of

Tobacco Products and Preventing Underage Use of products intended for adult

consumers 21 years of age or older.

The following report details our approach to Moving Beyond SmokingTM and

progress toward our 2025 goals across these two focus areas, where the activity

and success outcomes are heavily intertwined. This includes Altria’s work to

create the external conditions for tobacco harm reduction success; accelerate

investments to help transition adult smokers to smoke-free products; support

cessation for adult tobacco consumers who have decided to quit; market

responsibly to limit reach to unintended audiences; prevent underage access

through both retail and social sources; and, invest in positive youth development

programs that reduce youth engaging in risky behaviors, including tobacco use.

What’s not in this report?This report is not designed to provide a comprehensive review of the progress

against all our responsibility focus areas. Our website, Altria.com, provides

additional responsibility content including our 2020-2021 Engage and Lead,

Supporting Our People & Communities reports and Driving Responsibility

Through Our Value Chain reports as well as our 2019 Corporate Responsibility

Progress report. We will provide updates on our remaining focus areas

throughout the year through a series of individual “focus reports.”

Table of ContentsIntroduction

Moving Beyond Smoking : A Note from Billy Gifford . . . . . . . . . . . . . . . 5

The Harm Reduction Opportunity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Reducing the Harm of Tobacco Products

Performance Snapshot . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10

Our Strategy & Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Supporting Cessation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Preventing Underage Use

Performance Snapshot . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Our Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Our Strategy & Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Deepening Our Commitments Across the Framework . . . . . . . . . . . . 32

Supporting Our People & Communities 2020–2021

Corporate Responsibility Progress

Notes: 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 began in mid-March, 2020.

TM

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Billy Gifford Chief Executive Officer

"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."

Moving Beyond SmokingTM: A Note from Billy GiffordA 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 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 portfolio and amplifying our voice on harm reduction within the scientific and public health communities.

I’m optimistic about the future for tobacco harm reduction in the U.S. I see signs of progress every day.

� 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 manufacturers to communicate critical, science-based information to adult smokers about less harmful products.

� We hear more voices in public health coming out in support of harm reduction policies. In fact, 15 tobacco control experts – all former presidents of the Society for Research on Nicotine and Tobacco – published an article in August 2021 recognizing the benefits of e-vapor products.

� Data from the National Youth Tobacco Survey suggests that underage e-vapor use, while still high, shows signs of decline. Underage usage rates for traditional tobacco products remain at historical lows and, in the U.S., the minimum legal age to purchase any tobacco product is now 21, which we supported.

� 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 risk continuum is embraced by public health, the scientific community, our regulator and many others. However, 73% of people 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 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 more in this report. I am confident that we can make a lot more progress Moving Beyond Smoking.TM

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The Harm Reduction Opportunity For Adult Tobacco Consumers Today’s adult smokers are seeking new options, including those that reduce risk. In fact, as of September 2020, our research estimates 12 million adult tobacco consumers ages 21-54 are interested in switching from cigarettes to a different tobacco product.1 Tobacco companies are responding with innovative, smoke-free products. The Food and Drug Administration (“FDA”) is evaluating 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.

We are building a diversified business model with smoke-free products to 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.

The percentage of U.S. adult cigarette smokers has been declining for more than 50 years. Today, 14% of adults ages 18 and over are current smokers (34.1 million people), according to the Center for Disease Control's ("CDC") latest National Health Interview Survey (2019).

14.0%

1Tobacco Landscape 2.0 Study, Q3 2020

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FDA’s Regulatory Authority Over Tobacco Products The success of tobacco harm reduction in the United States hinges on a regulatory framework that allows manufacturers to provide adult tobacco consumers with potentially reduced-risk tobacco products and communicate accurate health information about them. This includes the ability to make reduced-harm claims about products that are proven to be lower risk than cigarettes. The FDA acts as the arbiter of this framework, with authority over nearly all aspects of the manufacturing, distribution and marketing of tobacco products.

With the FDA’s expansive authority to define the tobacco marketplace, this agency is in the leading position to create a mature, regulated tobacco marketplace that successfully reduces the harm caused by cigarettes by:

� timely scientific review and authorization of potential reduced-risk tobacco products;

� monitoring manufacturers' post-market surveillance data and quickly identifying and remediating emerging issues (e.g., uptick in underage use of a newly authorized product);

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

� 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.

Regulatory Pathways for FDA Authorization of New Tobacco Products and Modified Risk Claims

A new tobacco product is either a product commercially

marketed in the United States after February 15, 2007,

or any modification to a tobacco product commercially

marketed after February 15, 2007. If a predicate product

existed as of February 15, 2007, applicants can apply via

the Substantial Equivalence ("SE") regulatory pathway.

PMTA: A premarket tobacco application (“PMTA”) is an

application that must be reviewed and authorized by

the FDA before a new tobacco product can be legally

marketed in the United States.

MRTP: A “modified risk tobacco product” is a legal

designation in the U.S. for a tobacco product that poses

lower health risks to individual users and benefits the

population as a whole when compared to existing

products on the market such as cigarettes and for which

the FDA has authorized a modified risk claim.

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Nicotine Misperceptions & the “Risk Cliff”Persistent misperceptions regarding the role of nicotine and the relative risks of different tobacco products prove to be a significant obstacle to adult smokers switching to potentially reduced-harm products. For example, a study from the Health Information National Trends Survey found “a high prevalence of incorrect beliefs about the relationship between nicotine and cancer.” 1

Specifically, the study found “Most people (73%) either incorrectly believed that nicotine is the main substance in cigarettes that causes cancer or were unsure about the relationship between nicotine and cancer.” 2

While nicotine is addictive, it's the smoke from combustion – not nicotine – that causes smoking-related disease. Smoke from the burning of tobacco contains thousands of chemicals that are directly linked to smoking-related diseases such as lung cancer, heart disease and emphysema. FDA and other public health authorities agree that there is a broad “continuum of 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.

While there may be differences in risk profiles between specific smoke-free products, it will take years of epidemiology to quantify those differences. The body of evidence does, however, indicate a profound risk differential between combustible and smoke-free product categories. Data suggest that a two-dimensional "Risk Cliff" model is a useful description of the relative risk between combusted products (such as cigarettes and cigars) and smoke-free products (such as moist smokeless tobacco, heated tobacco, e-vapor and oral nicotine pouches).

Adapted from Nutt, et. al. Estimating the Harms of Nicotine-Containing Products Using the MCDA Approach. Eur. Addict Res 2014; 20:218-225.

1 O'Brien, E. K., Nguyen, A. B., Persoskie, A., & Hoffman, A. C. (2016). U.S. adults' addiction and harm beliefs about nicotine and low nicotine cigarettes. Preventive Medicine, 96, 94-100. doi:10.1016/j.ypmed.2016.12.0482 Id.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 https://www.fda.gov/news-events/speeches-fda-officials/protecting-american-families-comprehensive-approach-nicotine-and-tobacco-06282017.

4 Id.

The millions of U.S. adult smokers seeking less harmful alternatives to cigarettes deserve to be informed about the role of nicotine and the relative risks of different tobacco products. The FDA, the public health community and tobacco manufacturers all have a role to play in addressing misinformation that hinders progress on harm reduction. We believe it is our responsibility to help create the conditions for harm reduction to succeed – through education, awareness and advocacy – as we build a strong portfolio of smoke-free products that satisfy adult smokers’ evolving interests and preferences.

HigherRisk

LowerRisk

CombustibleTobaccoProducts

Smoke-freeTobacco Products

Risk Cliff Between Combustible & Smoke-free Tobacco

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Reducing the Harm of Tobacco Products

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Creating the ConditionsAccelerating Investments

Supporting Cessation

QuitAssist 2020 site visits – ~339,000; 248% increase from 2019 baseline

• 2020 Goal: Increase 50% from 2019 baseline (~97,500 visits)

59 engagements on the topic of tobacco harm reduction and regulatory compliance with the FDA and public health stakeholders

28 external posters and presentations

23 scientific and policy conferences

7 panel discussions

16 publications

On! oral nicotine pouches

• Full global ownership of on!, acquired remaining 20% interest in Helix

• Achieved unconstrained manufacturing

capacity for the U.S. market

• Submitted Pre-Market Tobacco

Applications (PMTAs) to FDA for

on! portfolio

• Distribution in ~78,000 retail stores

as of December 2020; ~105,000

as of June 2021

Through the first half of 2021, 181 engagements across 42 states in which Altria has engaged

with elected officials and policy makers on harm reduction for adult tobacco consumers** Tracking began in 2021

Regulatory & Scientific Engagements in 2020IQOS heated tobacco system

• FDA issued a Modified Risk Granted Order

authorizing a reduced exposure claim, including

“Scientific studies have shown that switching completely from conventional cigarettes to the IQOS system significantly reduces your body’s exposure to harmful or potentially harmful chemicals.”

• 2020 – Launched in Charlotte, North Carolina;

in 2021, added boutique in Northern Virginia

(D.C. suburb) and expanded statewide in

GA, VA, NC and SC

• Q2 2021: Marlboro HeatSticks retail sales volume

increased by nearly 40% compared to Q1

2020 – Q2 2021 Performance Snapshot

87% Smoke-free

tobacco products 8% Combustible

tobacco products5%

Agronomy

Engagement Topics

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Our Strategy & Approach2025 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.

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 them to these alternatives.

Our Product PlatformsOur companies focus on developing, manufacturing and marketing products and brands that meet three important consumer expectations:

� superior sensory experiences and nicotine satisfaction;

� reduced health risks and accurate relative risk information; and

� 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 potential to reduce harm: oral tobacco, heated tobacco and e-vapor.

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Smoke-Free Platform

Our ProductsWhat is its harm reduction

potential?(which must be determined by FDA)

Regulatory Progress

Oral Tobacco – Smokeless Tobacco

U.S. Smokeless Tobacco Company is the most profitable moist smokeless tobacco (“MST”) company, anchored by Copenhagen, the leading MST brand, Skoal, Red Seal and Husky.

From a scientific perspective, based on decades of epidemiology, it is now accepted by most public health researchers that smokeless tobacco, while not safe, is a far less risky way to use nicotine than cigarette smoking. According to our analysis of government data, when looking at all causes of mortality, we believe smokeless tobacco use is at least 96% less risky than cigarette smoking.1

U.S. Smokeless Tobacco Company submitted an MRTP application for Copenhagen Snuff in March 2018. The application contained the results of research that we believe demonstrates the modified risk claim we’re seeking – “IF YOU SMOKE, CONSIDER THIS: Switching completely to this product from cigarettes reduces risk of lung cancer” – is supported by science and understood by adult tobacco consumers.

In February 2019, an FDA scientific advisory committee reviewed our research and overwhelmingly supported the scientific accuracy of our proposed claim. More than two 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 communications.

Oral Tobacco – Nicotine Pouches

On! has a premium portfolio of product offerings across a variety of flavors and nicotine strengths. On! is widely distributed in over 100,000 stores that cover over 80% of total U.S. oral tobacco volume.

Because on! products are tobacco leaf free, they have lower levels of harmful and potentially harmful constituents than combustible tobacco products and traditional oral tobacco products such as snus and MST. We have included this information in our PMTAs filed with FDA for review.

Helix submitted PMTAs for the on! portfolio of products – including multiple varieties and nicotine strengths – in May 2020. They are still in review.

Separately, Helix intends to file a Modified Risk Tobacco Product Application for on!.

Heated Tobacco Products

IQOS is the only FDA-authorized heated tobacco system. In April 2019, the FDA authorized the IQOS PMTAs as appropriate for the protection of public health. We have exclusive rights to commercialize IQOS and three Marlboro HeatStick variants – one non-menthol and two menthol – in the U.S. through our agreement with Philip Morris International (“PMI”).

PMI’s research demonstrates that IQOS reduces levels of 18 harmful and potentially harmful constituents identified by the FDA by over 90% and reduces levels of 15 known carcinogens by more than 95% versus conventional cigarettes.

In July 2020 the FDA issued a Modified Risk Granted Order for the IQOS 2.4 Tobacco Heating System, including three variants of HeatSticks. FDA has authorized the marketing of this version of the IQOS Tobacco Heating System with a reduced exposure claim, including that switching completely from conventional cigarettes to the IQOS system significantly reduces your body’s exposure to harmful or potentially harmful chemicals.

In December 2020, the FDA authorized commercialization of the next generation of the IQOS tobacco heating system device, IQOS 3.0, in the U.S. FDA is currently considering whether the previously-authorized modified risk claim can also be used with the IQOS 3 device.

E-Vapor We participate in the e-vapor space through our 35% economic interest in JUUL, the leading e-vapor manufacturer.

E-Vapor heats e-liquid consisting of tobacco derived nicotine, humectants and flavors and does not produce many of the harmful and potentially harmful chemicals that combustible cigarettes do. The National Academies of Sciences, Engineering and Medicine completed 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.

In July 2020, JUUL submitted a PMTA for the JUUL System, including the JUUL Device and JUULpods in Virginia Tobacco and Menthol flavors at nicotine concentrations of 3.0% and 5.0% As part of Altria’s investment, ALCS provided regulatory and scientific support for those submissions. FDA’s regulatory decision is pending.

1 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

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Tobacco Consumer InsightsBased on the regulatory framework in place and our deep understanding 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, adult tobacco consumers consider reduced social friction and the possibility 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.

As tobacco consumer preferences continue to evolve, we will continue to 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.

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Science, Research & DevelopmentScience is at the core of Altria’s approach to tobacco harm reduction. Our investment in research and technology supports our smoke-free product development and the science needed for product applications submitted to the FDA.

Our regulatory science team, led by our Chief Scientific Officer, generates the scientific evidence needed to demonstrate that smoke-free tobacco products result in lower exposure to harmful and potentially harmful constituents and/or are lower risk when compared to conventional cigarettes. We’ve been at the forefront of developing new methodologies to assess the health impact of potentially reduced-risk tobacco products.

We follow a rigorous scientific framework for evaluating potentially reduced-risk tobacco products and supporting product applications to FDA. This framework enables us to evaluate tobacco products from product design to individual product risk assessments to overall population impact.

Our regulatory affairs team applies this rigorous framework to substantiate candidate products demonstrating protection of public health in order to bring new reduced-risk products to adult tobacco consumers.

Population Harm Reduction

Perception & Behavior Assessment

Risks & Benefits to the Population

• Risk perceptions and likelihood of use

• Actual use studies

• In-market studies

• Product instruction and comprehension studies

• Population modeling

• Post-market surveillance

• FDA's defined list of harmful and potentially harmful constituents

• Other targeted constituents (e.g., metals)

• Non-targeted analysis

• Physical assessment (e.g., particle size, aerosol)

Product Design & Control

• Ingredients and material qualification

• Manufacturing standards and quality controls

• Product stability

• Failure mode and hazard assessments

Constituent Reduction

Chemical & Physical Characterization

Impact on the PopulationThe Product Exposure & Health Risk

Individual Risk Reduction

• Toxicological and risk assessment of ingredients and other constituents

• Biological activity (in-vitro and in-vivo studies)

• Abuse liability assessment

• Short- and long-term switching studies

• Cross-sectional studies

Toxicology & Risk Assessment

Studies in Adult Human Subjects

Maria GogovaVice President Regulatory Sciences and Chief Scientific Officer, Altria Client Services

Science drives our efforts to realize our Vision to responsibly lead the transition of adult smokers to FDA-authorized, smoke-free products. To lead these efforts, we announced Maria Gogova as Altria's Chief Sicentific Officer. Dr. Gogova plays critical roles in shaping Altria's pursuit of harm reduction and representing Altria in the scientific and public health community.

E M P L O Y E E S P O T L I G H T

Advancing the Science; Making a Difference

+ Hear more on this topic from Dr. Gogova

in this video on altria.com

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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 publish, and we actively engage with members of the scientific community and share our research through conferences, meetings and other forums.

Insights-Driven Product Development

Altria’s scientists, engineers, product developers and consumer researchers are accelerating our investments to build unique intellectual property and a robust pipeline of differentiated, innovative smoke-free tobacco products. We are combining our deep knowledge of adult smokers, data analytics and behavioral science to better understand what would motivate and then help adult smokers transition to smoke-free products.

Meanwhile, countless employees across our organization – from procurement and manufacturing, to marketing and sales – are working to gain new insights that will support future product development, as they work to bring our existing, premium smoke-free brands to market, and support adult smokers’ transition to a smoke-free future

For instance, over the recent decades we have maintained a robust adult tobacco consumer database and have developed unique consumer connections through loyalty programs. We are enhancing these tools by working with our retail trade partners to increase the depth and breadth of point-of-sale purchase data. These tools enable deeper understanding of purchasing behaviors and consumer journeys that inform product development to best meet the needs of adult tobacco consumers.

Greg WilsonVice President Regulatory Engagement, Altria Client Services

Achieving our Vision requires engaging with the scientific and public health communities on our science and research. While some seek to exclude the tobacco industry from these opportunities, we believe successful harm reduction for adult tobacco consumers requires our ongoing commitment to the scientific principles of transparency, unbiased data review, direct researcher engagement and open dialogue with all stakeholders.

E M P L O Y E E S P O T L I G H T

The Critical Importance of Engagement with the Public Health and Scientific Communities

+ Read Greg's full story on altria.com

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Oral Nicotine Pouches: On!

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 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 the growing demand.

In the second quarter of 2021, Helix achieved unconstrained manufacturing capacity. By the end of June 2021, on! was available in approximately 105,000 retail stores, representing 80% of total U.S. industry oral tobacco volume and 70% of U.S. cigarette volume. On! can be purchased through its premium-branded website with a robust age verification platform – the same comprehensive age verification practice we employ for all our tobacco product branded websites. On! is also available for purchase on third-party e-commerce websites. For those third-party vendors with which we have contractual agreements, we require age verification prior to purchase.

Helix filed PMTAs for the on! portfolio in May 2020, which we believe makes a compelling case to FDA that the broad on! product offering is appropriate for the protection of public health. For example, our research shows that when comparing the levels of harmful/potentially-harmful constituents (“HPHCs”), the on! mint-flavored pouches containing 4 mg of tobacco-derived nicotine have significantly lower HPHCs as compared to General snus smokeless

Accelerating Investments in Oral Nicotine Pouches and Heated Tobacco

Communicating about the Health Effects of Tobacco Use

Congressionally-mandated health warnings have been on cigarette packs since 1966 and cigarette brand advertising since 1972. Similar warning requirements have been in place since 1986 for smokeless tobacco products and since 2000 for the cigars John Middleton sells. Additionally, our tobacco companies provide certain reports, such as 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 companies communicate about the health effects of their products visit Philip Morris USA's, U.S. Smokeless Tobacco Company's and John Middleton's corporate websites.

Kurt GottfriedDirector Regulatory Affairs, Altria Client Services

We follow a rigorous scientific framework for evaluating potentially reduced risk products in our applications that enables us to assess them from design, to individual risk, to overall population impact. I never cease to be amazed by the sheer brain power of our scientists and researchers. From Analytical and Population Sciences to Clinical and Pre-Clinical, we have a world class team that's laser focused on moving the science of harm reduction forward and using those insights to meet adult smokers where they are with satisfying, smoke-free alternatives.

E M P L O Y E E S P O T L I G H T

Our Science-based Approach to New Tobacco Products

+ Read Kurt's full story on altria.com.

On! Progress 2019 – 2021

105,000 stores (Q2 2021)

~78,000 stores (2020, 5x 2019)

to

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tobacco products, which have been granted both market orders and authorization to be marketed with a reduced risk claim.

The on! PMTA also provides strong evidence of its appeal to adult smokers. In a study we conducted, adult smokers and dippers used on! for 6 weeks after 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 over 70% of the adult dippers did the same. Additionally, we observed that women were just as likely as men to switch to on! at the end of the study. While these results must be considered in the context of study limitations, the data illustrate the promise offered by on!. The research supports our belief that various nicotine levels and flavor options are important to adult tobacco consumers looking to switch to potentially less harmful products.

Our in-market retail data support the findings from our PMTA research, showing that on! continues to primarily source from adult smokers and dippers. We also continue to learn. Female smokers are more engaged with oral nicotine pouches than with traditional moist smokeless tobacco, making up approximately 25% of oral nicotine pouch consumers as opposed to only 5% of MST consumers. With enhanced distribution and in-store visibility, consumers of competitive oral nicotine pouch brands are showing increasing interest in on!. We believe its unique packaging further differentiates on! from traditional smokeless tobacco and competitive oral nicotine pouch products and has broader adult tobacco consumer appeal.

We’re excited about the PMTA research and marketplace results. And, as we await FDA’s decision related to the Helix PMTA submissions, our regulatory and science teams are now planning a modified risk application for on!.

Patty MillerManaging Director Premarket Tobacco Applications, Altria Client Services

We work in a highly regulated industry. Having smoke-free products for cigarette smokers to switch to is key to our Vision. But we can't have those products on the market, accessible to adult smokers who want to switch to smoke-free products, until we get approved by our regulator. It's necessary to get FDA permission to be on the market and it's necessary to satisfy the post-authorization compliance requirements to stay on the market.

E M P L O Y E E S P O T L I G H T

Our Focus on Responsibility Before and After FDA Authorization

55%Smokers interested in switching

to a product based on an authorized reduced exposure claim

Source: Altria Client Services research study, February 2021

+ Read Patty's full story on altria.com

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Heated Tobacco: IQOS

IQOS has been the most successful next generation product for transitioning adult smokers globally, and, according to PMI, approximately 14.7 million adult smokers have stopped smoking and switched to IQOS.

In April 2019, the FDA authorized the sale of the IQOS heated tobacco system 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.

On July 7, 2020, the FDA also granted authorization to use a modified risk claim on the IQOS Tobacco Heating System 2.4 with three HeatStick variants. Specifically, FDA authorized the marketing of the IQOS Tobacco Heating System with the following reduced exposure claim:

Available Evidence to Date:

� The IQOS system heats tobacco but does not burn it.

� This significantly reduces the production of harmful and potentially harmful chemicals.

� Scientific studies have shown that switching completely from conventional cigarettes to the IQOS system significantly reduces your body’s exposure to harmful or potentially harmful chemicals.

The FDA’s review and authorization of a reduced exposure claim for IQOS are important milestones for this heated tobacco system to realize its harm reduction potential for adult smokers.

While many smokers recognize that IQOS addresses many of the social friction experiences they have with smoking, such as no ash and less odor, they have low awareness of reduced exposure to HPHCs when smokers 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.

Adult Smoker Awareness, Engagement & Trial of IQOS

Our IQOS consumer journey framework focuses on the adult smoker from awareness to switching, responsibly. At every stage, teams of trained Experts begin by taking steps to limit IQOS's reach to adult smokers 21+. Read more about IQOS's responsible marketing practices in the Underage Prevention chapter of this report.

Awareness

We're using multiple channels to generate adult smoker awareness for IQOS, including paid media, communications using our adult tobacco consumer database, and retail touch points at both our boutiques and trade partner stores.

Engagement & Trial

We have a number of unique consumer touch points to drive engagement and trial. Our flagship boutiques and nearby mall kiosks are designed to generate adult smoker awareness and provide them with the opportunity to engage fully with the brand. IQOS mobile infrastructure, which includes corners and education vehicles, allows the IQOS team to meet the adult smokers in different locations, such as at meet-up locations or outside retail stores. IQOS Corners, which are set up within select retail stores, engage adult smokers where they normally purchase their cigarettes. Finally, we have a network of over 500 trained IQOS Experts who can provide guided trials across these and other locations.

Through our marketing efforts, we've found that more than half of adult smokers who engaged with IQOS continue to the guided trial process. We know that guided trial is critical for explaining how to use the IQOS device, its reduced exposure MRTP claim, its non-health benefits and its taste profile.

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We believe smokers’ understanding of the harm-reduction benefits of smoke-free products relative to cigarettes will be an important factor in their decision to switch. And PM USA continues to strongly and responsibly reinforce this important message with smokers.

In November 2020, PM USA began a national digital campaign to grow adult smoker awareness of the IQOS system and its reduced exposure designation. The digital advertising was served to adult smokers whose age is verified against public or government records prior to receiving the ad. This campaign was expanded through print advertising in 2021. These campaigns are executed in compliance with all regulatory and legal requirements, including the FDA’s review and post-marketing surveillance requirements, as well as our marketing policies – with the intention to minimize reach to unintended audiences.

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, PM USA:

� launched IQOS and Marlboro HeatSticks in two new metro markets and across four states;

� developed creative digital tools to enhance consumer engagement;

� communicated with smokers using the FDA-authorized reduced exposure claim about the benefits of switching completely from cigarettes; and

� provided extensive post-marketing information to FDA related to its marketing, advertising, consumer research and related matters.

PM USA continues to maximize the product’s organic growth potential by focusing first on densely populated metro areas, and then expanding outwards as the user base grows. As IQOS expands distribution, PM USA is evolving its plans based on learnings from the lead markets.

We’ve learned that providing flexible options for smokers to engage with the product was especially critical during the pandemic. Prior to boutiques closing in March 2020, more than half of device purchases were made from a boutique. As stores reopened in June, device purchases shifted primarily to mobile retail, accounting for nearly two-thirds of device purchases through the end of the year. These options allowed smokers to engage with our teams in convenient and socially distant settings. Further, PM USA developed online guided tutorials and mobile video chat capabilities to support age-verified smokers in their IQOS journeys.

40% of IQOS purchases sourcing from competitive smokers

Source: CAGNY

Marlboro HeatSticks Q2 total retail sales volume increased nearly

40% compared to Q1 2021Source: Q2 Earnings

40%

Performance

� Statewide expansions of HeatSticks and devices across GA, VA, NC and SC in 2020

� Expanded into the Northern VA metro market in Q2 2021

HeatSticks grew across all metro markets in 2020:

� Richmond, VA

� Charlotte, NC

� Atlanta, GA

Atlanta, GA

Richmond, VA

Charlotte, NC

SC

Expansion

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On December 7, 2020, the U.S. FDA authorized commercialization of the next generation of the IQOS tobacco heating system device, IQOS 3, in the U.S. IQOS 3 offers several enhancements to the IQOS 2.4 currently being sold in select U.S. markets, including longer battery life, faster recharging time, a side opening mechanism, and magnetic closure.

As we pursue our Vision, we want to make sure that all adult smokers, regardless of background, demographics or financial means, have equitable opportunities to reduce the harm of smoking. For example, IQOS is focused on equitable tobacco harm reduction. One of the main drivers of initial awareness of IQOS across all demographic groups is hearing about the product from a fellow smoker. Our IQOS Experts over-index among the Black and Hispanic population compared to the markets we operate in, which has led to an even higher word-of-mouth awareness among non-white smokers. Another critical component of these awareness-building activities is developing an understanding and credibility of the reduced exposure MRTP claim. We have translated the MRTP claim to Spanish to help Spanish-speaking smokers have an accurate understanding of the science behind IQOS.

In May 2021, an International Trade Commission (ITC) Administrative Law Judge (ALJ) found that the IQOS system infringes two plaintiff's patents and recommended imposition of a ban on the importation of the IQOS system. In July 2021, the ITC accepted review of the ALJ's findings and recommendations on certain issues, including issues related to the patent infringement claims and potential remedies. On September 29, 2021, the ITC issued an order imposing an importation ban on the IQOS device and Marlboro HeatSticks into the U.S., and a cease and desist order on the marketing and sale of product already imported into the U.S. The ITC’s order is subject to review by the Administration’s U.S. Trade 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.

As we have expanded into new markets and channels, we have learned that some smokers are hesitant to purchase IQOS based on the initial cost of a device and HeatSticks options, particularly in the indirect retail channel where we have the broadest reach to a diverse smoker population. To address these concerns and encourage product trial, PM USA introduced more device 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 the decision to purchase. Purchases from these new bundle options and the lending program accounted for over 60% of Charlotte device sales in 2020 and the lending program has accounted for approximately 10% of sales across all markets, with an impressive trial to purchase rate of 87% through Q2 2021. We are encouraged by the results. And we believe these options will make IQOS more affordable for a broader range of adult smokers seeking a reduced harm alternative.

With a particular focus on the four states where IQOS is currently available and in consideration of future expansion, PM USA intends to maximize its first mover advantage while responsibly positioning the U.S. heated tobacco category for long-term growth and profitability.

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Creating the Conditions for Harm Reduction Success Through Advocacy & Engagement

A key strategy for achieving our Vision is to lead in the external environment through communications, engagement and science-based policy and regulatory solutions. We believe this is an important aspect of creating the conditions for making progress in harm reduction for adult tobacco consumers.

This commitment to Altria’s Vision means engaging actively and responsibly with policy makers at all levels of government. We engage to share who we are, where we are headed, and the vital role legislation and regulation play in shaping the future of our industry. Participating in the democratic process is vital to our business and to the many stakeholders with an interest

in transforming this industry for the better – including our shareholders, employees, business partners, communities, and adult consumers.

We also regularly engage with the scientific, public health, and regulatory communities through face-to-face meetings, regulatory filing, publishing in scientific journals and participating at scientific conferences where we present our research. We listen to and welcome feedback on our work.

Altria's Vision sets the direction for all our legislative and regulatory efforts. For us, Moving Beyond SmokingTM means advocating for a harm reduction future where the entire industry is operating within science-based federal regulation, where underage tobacco use continues to decline, and where adult smokers who don't quit are switching to FDA-authorized less harmful products.

Transformational changes in recent years have made this future more possible than ever. Today we see:

� Generational lows in underage use of all traditional tobacco products.

� A national minimum age of 21 driving underage use down further for all product categories.

� Scientists agreeing that while nicotine is addictive, it’s smoke that causes most tobacco-related harm.

� Manufacturers innovating new, smoke-free products with the potential to reduce harm.

� The FDA regulating the industry and authorizing reduced harm products based on science.

Our goal in our engagement with regulatory and policy stakeholders is to advance our Vision by supporting policies and regulations necessary for harm reduction to succeed.

Phil ParkVice President Government Affairs, Altria Client Services

The issue of tobacco harm reduction and the FDA’s regulatory framework for tobacco products is complex. It’s my team’s job to engage with federal policy makers to talk about what 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.

E M P L O Y E E S P O T L I G H T

Engaging with Policy Makers on the Science of Potentially-Reduced Harm Tobacco Products

+ Read Phil's full story on altria.com

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Key Legislative & Regulatory Priorities

Supporting Science-Based FDA Regulation

Harm reduction can’t succeed without effective, comprehensive federal regulation of tobacco products.

Advocating for Legislation Preventing Underage Use

Harm reduction starts with preventing underage use of all tobacco products.

Endorsing Tax Policy That Gives Less Harmful Products a Better Chance

Tax classifications written many decades ago make little sense today given the science showing major risk differences between combustible and non-combustible products.

Protecting the Legal, Regulated Market from Illegal Trade

A thriving underground market in tobacco products is a serious threat to effective regulation and public health.

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.

Urging Foundational Rules for SE, PMTA, and MRTPA

Congress established specific pathways to market for new or modified tobacco products and a process for seeking FDA authorization to make modified risk claims.

Supporting FDA-Authorized, Smoke-Free Flavored Products as Critical to Harm Reduction

Published data demonstrate that flavors are critical in adult smokers’ trial and adoption of smoke-free products.

Opposing Ban on Menthol Cigarettes or Flavored Cigars Not Supported by Science and Evidence

We believe that the better way to reduce harm is to offer adult smokers appealing smoke-free tobacco products such as IQOS and on! instead of imposing prohibition-type bans that rarely work and have significant collateral consequences.

Promoting Access to Better Choices for Adult Smokers 21+

Adult smokers who don’t quit should be encouraged to switch to FDA-regulated less harmful products.

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.

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Supporting Cessation2025 Goal:

Provide access to expert quitting information for those who have decided to quit.

For adult consumers concerned about the health effects of tobacco use, the best thing to do is quit. For many, quitting can be very difficult. For those who decide to quit, we offer QuitAssist,® an online resource to help them be more successful. Developed with a review board of smoking cessation experts, QuitAssist® highlights the Centers for Disease Control and Prevention’s "Five Keys for Quitting" and helps connect adult tobacco users who have decided to quit to expert quitting information from public health authorities and others. In 2020, we began the process of re-evaluating QuitAssist® to ensure the site provides cessation resources that are effective and inclusive of the diverse population of adult consumers who have made the decision to quit.

We communicate about QuitAssist® through our corporate and product websites, email and direct mail. Since its launch in 2004, the website has received over 3.9 million visits. In 2019, the legal age of purchase moved to 21 at the federal level, giving 18-, 19- and 20-year old tobacco users a prime opportunity to decide to quit. With this understanding, from 2020 to 2021 we increased investments in digital advertising and online search to raise awareness of the expert tips and resources located on QuitAssist® and continued this work through 2021. Through these advertising and search investments, site visits increased more than 248% in 2020 year-over-year, far exceeding our goal of increasing visits by 50% .

Our cessation support strategy continues to evolve. We are considering ongoing accessibility and equity in supporting the quitting journey of a diverse set of adult tobacco consumers who have decided to quit a range of different tobacco products – not just cigarettes. This will require engagement with public health cessation experts and a deep understanding of the

Natasha Knight, Manager Underage Prevention and Cessation Support, Altria Client Services

We are re-evaluating our foundation for cessation support, making sure that what we're doing makes sense for the time that we're in. We work closely with our colleagues in regulatory sciences to generate insights that allow us to make informed decisions. The work supports the company by continuing to be evidence based and done with integrity.

E M P L O Y E E S P O T L I G H T

Driving a Strategy to Support Adult Consumers in Cessation

+ Read Natasha's full story on altria.com

2020 – 2021 Goals for QuitAssist® website

Increase 2020 visits by 50%, from a 2019 baseline. Achieved

248% increase

landscape of products, users and the barriers to quitting, as well as providing the most effective quitting resources through QuitAssist®. We are also focused on modernizing the site with the most up-to-date tobacco cessation resources, optimizing for mobile use, and adding more inclusive and relatable testimonials from a broader range of adult tobacco consumers who have successfully quit tobacco use.

Increase 2021 visits by 100%, from a 2020 baseline

Progress through June 2021:

44% toward goal of 100%

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Looking ForwardThe tobacco marketplace is dynamic and evolving. Changing consumer preferences and societal expectations have spurred an industry shift to a smoke-free future. For many years, Altria has been focused on harm reduction. Altria is Moving Beyond Smoking™, leading the way in moving adult smokers away from cigarettes by taking action to transition millions to potentially less harmful choices – believing it is a substantial opportunity for adult tobacco consumers, Altria’s businesses and society. At Altria, we are committed to

supporting science and research, offering adult smokers a diverse portfolio of satisfying smoke-free alternatives and supporting them in their efforts to switch. We believe all adult consumers, inclusive of age, race, ethnicity, gender, geographic location and socioeconomic status, should have equal access to product information and the science about health risks. We expect to continue to constructively engage with regulatory bodies and the broader scientific community to advance tobacco harm reduction and realize our Vision.

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From 18

To 21.

Preventing Underage Use

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Responsible Marketing Positive Youth Development

Underage Access Prevention

100% of our Brand employees and key

business partners were trained on marketing guidelines and policies,

against target of 100% in 2020.

0 Master Settlement Agreement enforcement actions in 2020 for Philip Morris USA, against

target of zero.

Success 360° partners’ prevention programming in

20 states

$25.8 million invested in Success360° programs – More than 50% of total budgeted corporate contributions

More than

17 million kids reached by

Success360° partners nationwide

183,046

pieces of Underage Social Access Prevention signage shipped

pieces of We Card™ point of sale shipped

445,562

2020: First Half 2021 Progress

# of States Enacted 33 states + D.C. (+14 states)

39 states + D.C. (+6 states)

% of U.S. Population 73% 84%

Tobacco 21 LawsStates that have enacted legislation to increase the legal age of purchase (“LAOP”) to 21 years of age

2020 – Q2 2021 Performance Snapshot

2020: First Half 2021 Progress

# of Retail Stores Participating with Validated Adoption ~65,000 ~75,000

Product Volume Represented

47% of PM USA Volume

58% of E-Vapor Volume

51% of PM USA Volume

62 % of E-Vapor Volume

Responsible Retailing Incentive Program, encouraging adoption of age-validation technology: kits sent to over

130,000 retailers in 2020

100% of IQOS-owned retail

locations met We CardTM requirements

91% of contractually obligated stores were verified to have

the required signage posted and 85% also had posted Altria-provided social access prevention signage *

*Based on a sample of approximately 35,000 stores from September 27, 2020 to December 28, 2020.

100% of third-party IQOS employees (“IQOS Experts”) received training for Good Conversion Principles including age/tobacco status qualifications

Many retailers, especially regional and national chains, have custom training

systems designed to train retail employees to prevent underage access. For those that don’t, Altria offers free We Card™ training

through Altria Group Distribution Company’s online retailer portal.

**Based on last comprehensive update Q1 2021

As part of our ongoing efforts to market IQOS responsibly, we use retail mystery shopper audits to remediate any gaps in execution

and retrain IQOS Experts

95+% pass rates for IQOS retail mystery shopper audits for qualifying tobacco status and age validation**

4,921 Altria-funded retail employee trainings through We Card™

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Our CommitmentsToday, underage use of conventional tobacco products is at the lowest levels in a generation. In fact, the latest Monitoring the Future study estimates youth smoking rates to be 4.2% in 2020, an 85% reduction from its 1997 peak. FDA regulation covers nearly every aspect of how tobacco products are manufactured, marketed and sold. Retailer compliance rates with legal age of purchase laws have risen over the past 20+ years. Today, the compliance rates hover around 90%. After an alarming rise in youth vaping rates in 2018 and 2019, we see early signs that this trend may be reversing – according to the 2020 National Youth Tobacco Survey, 13.1% of middle and high schoolers reported past 30-day e-vapor use, a decline from the 2019 peak of 20%. While we recognize the progress, we understand the importance of tobacco manufacturers, regulators and policymakers staying vigilant and acting collaboratively to prevent youth use of products intended for adults 21+.

Altria is committed to being part of the solution. Through our 2020 materiality assessment, our stakeholders reaffirmed their expectations that we continue to lead our industry in preventing underage use. That’s why we established a broader vision of success and declared our 2025 goals: to lead the industry in preventing underage use of products intended for adults 21+, while contributing to the healthy development of youth ages 12 – 18.

The scope of our focus is intentionally broader than “preventing underage tobacco use.” We acknowledge the responsibility we have to shape positive outcomes for youth in preventing use across a broad range of for-adult product categories in our operating company and investment portfolios. We also acknowledge the immediate opportunity in front of us: To preserve the opportunity for adult tobacco harm reduction, ensure youth use of traditional tobacco products remains at generational lows and continues to decline, and prevent youth use of new-to-market tobacco products intended for adults 21+.

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Past 30-day tobacco products use among middle school students: Percentages, 2011-2020National Youth Tobacco Survey

7.5

6.7 6.5

7.77.4 7.2

5.6

7.2

12.5

6.7

4.3

3.5

2.92.5 2.3 2.2 2.1 1.8

2.3

1.6

3.52.8 3.1

1.9

1.62.2

1.5 1.6

2.31.5

2.21.7

1.4

1.6

1.82.2 1.9 1.8

1.8 1.2

0.61.1 1.1

3.9

5.3

4.3

3.3

4.9

10.5

4.7

0

2

4

6

8

10

12

14

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Perc

enta

ge (%

)

Any Tobacco Cigarettes Cigars Smokeless Tobacco E-Cigarettes

3

Source for 2011-2018 data: https://www.cdc.gov/mmwr/volumes/68/wr/mm6806e1.htmOffice on Smoking and Health. 2018 National Youth Tobacco Survey. Atlanta, GA: U.S. Department of Health and Human Services, Centers for Disease Control and Prevention, National Center for Chronic Disease Prevention and Health Promotion, Office on Smoking and Health, 2018.Source for 2019 data: Tobacco Product Use and Associated Factors Among Middle and High School Students – United States, 2019: https://www.cdc.gov/mmwr/volumes/68/ss/pdfs/ss6812a1-H.pdfNote: In 2014 and 2015, modifications were made to the e-cigarette measure to enhance its accuracy, which may limit the comparability of these estimates to those collected in previous years. The dotted lines from 2011 to 2013 represent these differences.Note: In 2019, modifications were made to the survey, as well as e-cigarette measure through inclusion of a brand example (JUUL), authors caution against comparisons to prior years.Note: In 2020, the data collection timeline was truncated because of widespread school closures during the coronavirus disease 2019 pandemic.

Trends in Underage Tobacco Use | Altria Client Services l Regulatory Affairs: Population Science | June 2021 l Confidential |Prepared in support of underage tobacco prevention and regulatory research and engagement. See Underage Tobacco Use, Tobacco Initiation, and Tobacco Cessation Information Policy.

Past 30-day tobacco products use among middle school students. Percentages, 2011–2020. National Youth Tobacco Survey

Past 30-day tobacco products use among high school students: Percentages, 2011-2020National Youth Tobacco Survey

24.223.3 22.9

24.625.3

20.2 19.6

27.1

31.2

23.6

15.8

14.012.7

9.2 9.38.0 7.6 8.1

5.8

4.6

11.612.6

11.9

8.2 8.67.7 7.7 7.6

7.6

5.0

7.36.4

5.7

5.5 6.0 5.85.5 5.9 4.8

3.1

1.52.8

4.5

13.4

16.0

11.3 11.7

20.8

27.5

19.6

4.15.4 5.2

9.4

7.2

4.83.3

4.13.4 2.7

0

5

10

15

20

25

30

35

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Perc

enta

ge (%

)

Any Tobacco Cigarettes Cigars Smokeless Tobacco E-Cigarettes Hookah

2

Source for 2011-2018 data: https://www.cdc.gov/mmwr/volumes/67/wr/mm6722a3.htmOffice on Smoking and Health. 2018 National Youth Tobacco Survey. Atlanta, GA: U.S. Department of Health and Human Services, Centers for Disease Control and Prevention, National Center for Chronic Disease Prevention and Health Promotion, Office on Smoking and Health, 2018.Source for 2019 data: Tobacco Product Use and Associated Factors Among Middle and High School Students – United States, 2019: https://www.cdc.gov/mmwr/volumes/68/ss/pdfs/ss6812a1-H.pdfNote: In 2014 and 2015, modifications were made to the e-cigarette measure to enhance its accuracy, which may limit the comparability of these estimates to those collected in previous years. The dotted lines from 2011 to 2013 represent these differences.Note: In 2019, modifications were made to the survey, as well as e-cigarette measure through inclusion of a brand example (JUUL), authors caution against comparisons to prior years.Note: In 2020, the data collection timeline was truncated because of widespread school closures during the coronavirus disease 2019 pandemic.

Trends in Underage Tobacco Use | Altria Client Services l Regulatory Affairs: Population Science | June 2021 l Confidential |Prepared in support of underage tobacco prevention and regulatory research and engagement. See Underage Tobacco Use, Tobacco Initiation, and Tobacco Cessation Information Policy.

Past 30-day tobacco products use among high school students. Percentages, 2011–2020. National Youth Tobacco Survey

Past 30-day tobacco products use among high school and middle school students: Percentages, 2011-2020. National Youth Tobacco Survey

Past 30-day tobacco products use among 8th , 10th & 12th grades combined: Percentages, 1991-2020Monitoring the Future

20.7

28.3

4.2

9.2

9.7

4.96.5

4.9

12.8

9.9

12.0

19.2

22.521.2

3.9

1.8

7.4

3.14.5

2.4

0

5

10

15

20

25

30

199119921993199419951996199719981999200020012002200320042005200620072008200920102011201220132014201520162017201820192020

Cigarettes Smokeless Tobacco E-Cigarettes Large Cigars Flavored Litt le Cigars Regular Little Cigars

%

1

Source: http://monitoringthefuture.org/data/20data/table7.pdf* For e-cigarettes, 2017 and prior years are not comparable due to methodological changes.

Note: In 2020, the total sample size only represents a quarter of the typical annual sample size due to the COVID-19 pandemic. Data were gathered from a broad geographic and representative sample and statistically weighted to provide national numbers.

Trends in Underage Tobacco Use | Altria Client Services l Regulatory Affairs: Population Science | June 2021 l Confidential |Prepared in support of underage tobacco prevention and regulatory research and engagement. See Underage Tobacco Use, Tobacco Initiation, and Tobacco Cessation Information Policy.

Past 30-day tobacco products use among 8th, 10th and 12th grades combined. Percentages, 1991–2020. Monitoring the Future

Source: http://monitoringthefuture.org/data/20data/table7.pdf

* For e-cigarettes, 2017 and prior years are not comparable due to methodological changes.

Note: In 2020, the total sample size only represents a quarter of the typical annual sample size due to the COVID-19 pandemic. Data were gathered from a broad geographic and representative sample and statistically weighted to provide national numbers.

Source: https://www.cdc.gov/mmwr/volumes/67/wr/mm6722a3.htm

Note: Any tobacco product use is past 30-day use of cigarettes, cigars, smokeless tobacco, electronic cigarettes, hookahs, pipe tobacco, and/or bidis on ≥1 day in the past 30 days.

Note: For smokeless tobacco, 2015 and prior years data are not comparable due to

methodological changes into 2015. In 2015 smokeless tobacco includes chewing tobacco/ snuff/dip, snus, and dissolvable tobacco because of limited sample sizes. Prior to 2015, smokeless tobacco included only chewing tobacco/snuff/dip.

Note: In 2020, the data collection timeline was truncated because of widespread school closures during the coronavirus disease 2019 pandemic.

Source for 2011-2018 data: https://www.cdc.gov/mmwr/volumes/68/wr/mm6806e1.htm

Office on Smoking and Health. 2018 National Youth Tobacco Survey. Atlanta, GA: U.S. Department of Health and Human Services, Centers for Disease Control and Prevention, National Center for Chronic Disease Prevention and Health Promotion, Office on Smoking and Health, 2018.

Source for 2019 data: Tobacco Product Use and Associated Factors Among Middle and High School Students – United States, 2019: https://www.cdc.gov/mmwr/volumes/68/ss/pdfs/ss6812a1-H.pdf

Note: In 2014 and 2015, modifications were made to the e-cigarette measure to enhance its accuracy, which may limit the comparability of these estimates to those collected in previous years. The dotted lines from 2011 to 2013 represent these differences.

Note: In 2019, modifications were made to the survey, as well as e-cigarette measure through inclusion of a brand example (JUUL), authors caution against comparisons to prior years.

Note: In 2020, the data collection timeline was truncated because of widespread school closures during the coronavirus disease 2019 pandemic.

Source for 2011-2018 data: https://www.cdc.gov/mmwr/volumes/67/wr/mm6722a3.htm

Office on Smoking and Health. 2018 National Youth Tobacco Survey. Atlanta, GA: U.S. Department of Health and Human Services, Centers for Disease Control and Prevention, National Center for Chronic Disease Prevention and Health Promotion, Office on Smoking and Health, 2018.

Source for 2019 data: Tobacco Product Use and Associated Factors Among Middle and High School Students – United States, 2019: https://www.cdc.gov/mmwr/volumes/68/ss/pdfs/ss6812a1-H.pdf

Note: In 2014 and 2015, modifications were made to the e-cigarette measure to enhance its accuracy, which may limit the comparability of these estimates to those collected in previous years. The dotted lines from 2011 to 2013 represent these differences.

Note: In 2019, modifications were made to the survey, as well as e-cigarette measure through inclusion of a brand example (JUUL), authors caution against comparisons to prior years.Note:

In 2020, the data collection timeline was truncated because of widespread school closures during the coronavirus disease 2019 pandemic.

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Our Strategy & Approach2025 Goals:

Lead the industry in preventing underage use of products intended for adults 21+.

Contribute to the healthy development of youth ages 12 – 18.

For more than two decades, Altria’s tobacco companies have made significant investments to prevent kids from using tobacco, guided by our Standards for Underage Use Prevention and underage tobacco prevention framework. These efforts include:

� supporting programs and organizations that positively influence kids and their decision not to engage in risky behaviors like tobacco use;

� providing parents with tools to help them raise kids who don’t use tobacco;

� supporting trade programs, retailer training and legislative efforts that help prevent underage access to tobacco products; and

� taking steps designed to limit the reach of their brands and marketing materials to unintended audiences.

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Accountability InfrastructureTo advance the Preventing Underage Use goals, we rely on established infrastructure, employee resources and shared accountability across a variety of business functions.

Standards for Underage Use Prevention

In accordance with our Standards for Underage Use Prevention, each tobacco operating company and service company affiliate works to identify, support, develop and execute programs to help prevent underage use. Annual Underage Tobacco Prevention plans outline the concrete steps each operating company will take to help prevent underage tobacco use.

In 2020, we updated these Standards to reflect our broader vision of success and codify our accountability infrastructure, consisting of Board oversight, Altria’s Underage Use Prevention Steering Committee and related expectations for future, potential strategic investments.

Underage Tobacco Prevention Framework

Our underage tobacco prevention framework serves as an important anchor for how we contribute to reducing underage use of tobacco products.

Key Functions

� Underage Prevention & Cessation Support

� Compliance

� Corporate Responsibility

� Digital Marketing Services

� Field Sales Force

� Government Affairs

� Law

� Marketing Compliance

� Brand

� Industry Engagement

� Trade Marketing

� Regulatory Advocacy

� Regulatory Sciences

Key Systems

� Brand Management Education and Training

� Marketing Compliance Training and Toolkit

� Media Buyer and Ad Agency Partner Training

� Move to 21 – Advocacy and Retailer Support

� Retail Contracts

� Responsible Retailing Incentive Program – Age Validation Technology

� We CardTM Signage Requirements, Distribution & Tracking System (Trax)

� We CardTM Training through Altria Retailer Portal

� IQOS Employee/Expert Training

� Mystery Shopper Audits

� FDA-Issued "No Tobacco Sale Order"– Aligned Retailer Penalties

� Online Electronic Age Verification

� Underage Tobacco Use Survey

� LAOP 21 Advocacy

� Success 360° Network & CEO Convenings

Key Policies, Principles & Guidelines

� Domestic Cigarette, Smokeless Tobacco and Cigar Advertising & Marketing Policy

� IQOS Good Conversion Principles

� Product Communication

Business Practices

Research

Communications & Engagement

ParentCommunications

Positive Youth Development

Grant Program

Underage Access Prevention Policy

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Leadership Oversight

Jennifer Hunter, Altria’s Senior Vice President Corporate Citizenship, has direct oversight for all of Altria’s enterprise responsibility efforts, including strategies for underage tobacco prevention. She reports directly to Altria’s CEO and provides regular updates to Altria’s executive leadership team on progress with respect to Altria’s underage tobacco prevention strategies and associated activity. In addition, and in accordance with our Standards for Underage Use Prevention, she also shares the activity and progress in her purview to Altria’s Board of Directors’ Nominating, Corporate Governance and Social Responsibility Committee.

In addition to Board and leadership team oversight, in 2020 we formed an overarching Underage Use Prevention Steering Committee. In this committee, which meets quarterly, senior leaders, subject matter experts and employees with direct accountability to our key systems and policies meet to discuss emerging issues, share updates on related initiatives and identify additional activity necessary to make progress toward our 2025 goals. This committee also enforces policies that guide the daily activities of our employees with underage tobacco prevention responsibilities, including marketing our tobacco companies’ products to adult tobacco consumers. Read more about our responsible marketing practices later in this report, and check out our policies in Appendix A.

Compliance

Each fall, Altria’s Corporate Audit department conducts a detailed risk assessment process, considering auditable risks across the enterprise and determining how to prioritize audit resources for the coming year. High-risk areas are audited on a three-year schedule; whereas medium-risk areas are audited every six years. Audits are scoped using a risk-based approach and may focus on any number of issues, depending on the greatest risks identified. Over the past three years, the department has conducted 11 audits that touch marketing compliance risk areas, including: age verification, controls around our Adult Tobacco Consumer Database, retail compliance, online fulfillment services, the Marlboro Rewards platform, third-party retail and merchandising services, retail/consumer engagement, digital consumer engagement and adult tobacco consumer direct marketing. None of these audits surfaced findings related to marketing policy non-compliance.

In the third quarter of 2021, Corporate Audit completed an internal audit to evaluate accountable key functions’ use of and adherence to the standards, policies, guidelines, and systems designed to help support our efforts to prevent underage use of tobacco products. The scope of the audit included:

� the operating companies’ annual planning process,

� policy compliance,

� program efficacy,

� marketing compliance training,

� retailer accountability to contractual requirements and

� corporate responsibility reporting related to our progress toward preventing underage use.

This internal audit is designed to further strengthen the infrastructure supporting our efforts. The results of the audit indicated that the appropriate internal controls are in place and operating effectively to mitigate identified risks, while also identifying an opportunity to further enhance our data substantiation methodology and processes. It is important to note that we continuously evolve our policies and audit process based on new risks identified, as the ways we interact with consumers continue to evolve. We continuously assess the oversight of our underage prevention planning process and will do so through 2022.

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Deepening Our Commitments Across the FrameworkAs our work to prevent underage tobacco use continues, we’re acutely focused on reducing youth e-vapor use and we are deepening our efforts across:

� foundational research;

� business practices, with a focus on responsible marketing;

� policy advocacy and regulatory engagement;

� underage access prevention, including supporting responsible retailing and addressing social source access; and

� positive youth development, through our Success 360° grant portfolio.

Foundational ResearchResearch continues to guide all of our underage tobacco prevention efforts. In early 2019, a Regulatory Sciences research team created a new approach for this portfolio to deepen our understanding of demographics, use patterns and risk and protective factors of e-vapor and other new products. This approach informs our prevention and cessation strategies. The plan is guided by strategies to increase the timeliness and quality of surveillance and target and accelerate learnings from relevant stakeholder perspective.

The rapidly changing tobacco landscape demands that our underage tobacco prevention strategies be informed by the latest available information and this survey will generate actionable information on a more frequent, timely basis than what is currently provided through the government and Public Health national data sets. In the first quarter of 2020, Altria piloted a new underage tobacco use monitoring tool designed to provide timelier data covering more product categories, as compared to current survey tools.

We began full execution of the Underage Tobacco Use Survey in the second quarter of 2020. We assess several key measures of tobacco use among underage individuals, including awareness of tobacco products, current and ever tobacco use, demographic characteristics, brand and flavors used, and sources of access. The annual target sample size for the survey is 5,500 individuals under the legal age for tobacco use. Data was collected from May to November 2020. The final sample consisted of 5,252 underage individuals. We shared this data with FDA and made the results public through our Altria Science website, where we provide updates every 6 months.

This Underage Tobacco Use Survey is designed to help us meet stakeholder expectations – made clear through interactions with FDA personnel evaluating product and claim authorizations, the Tobacco Product Scientific Advisory Committee, investors, public health groups and others – that we and other tobacco manufacturers need to understand the latest product-specific underage tobacco use trends.

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Business Practices, with a Focus on Responsible MarketingOur companies' marketing approach is guided by our Vision to responsibly lead the transition of adult smokers to a smoke-free future. “Responsibly lead” means we must limit reach, access and appeal to unintended audiences, including youth and adults who don’t use tobacco. This is a key pillar of our underage tobacco prevention framework and imperative to tobacco harm reduction.

The cornerstone of our approach to marketing responsibly is compliance with all legal, regulatory and internal policy requirements. We work hard to instill a culture of responsibility throughout our marketing and sales organizations and with our business partners. Marketing programs vary among our tobacco companies and their brands. But the focus remains the same – to responsibly grow market share by enhancing brand awareness, rewarding loyalty and driving adult tobacco consumers to switch from competitive brands to our smoke-free products – all while limiting our reach to unintended audiences, including non-users and those under the legal age to purchase tobacco products..

Altria’s tobacco operating companies marketing is intended to appeal to adult tobacco consumers 21+, an audience that is broad-based and multicultural. In order to understand adult smoker preferences, and market its products effectively to the evolving population of adult smokers, the tobacco operating companies will conduct consumer research among this multicultural population, including among specific ethnic or cultural groups. Our tobacco operating companies will continue to conduct marketing activities to communicate effectively with the changing population of adult smokers.

Marketing Policies

Our Code of Conduct establishes the basic compliance principles for our businesses in several key areas, including marketing responsibly. Specific advertising and communication policies guide the daily activities of our employees who have responsibilities for how our tobacco companies market their products to adult tobacco consumers. These policies can be reviewed in Appendix

A. We develop, review and approve consumer advertising materials through a step-by-step compliance review process. This process includes controls to identify business or legal issues before the materials are produced.

To support these efforts, employees must:

• create marketing materials and programs that comply with all legal requirements, our Code, policies, practices and commitments;

• hold advertising agencies and marketing consultants to these standards;

• never make misrepresentations about our companies' products, including the health effects of those products;

• substantiate all claims about our companies' products before making claims; and

• never market our companies' products to underage persons.

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Connecting with Our Consumers

Our tobacco operating companies’ dedicated brand teams and the digital and marketing services team develop annual plans that use a variety of activities, tools and channels, including a substantial age-verified adult tobacco consumer database, to engage with adult consumers.

Our companies use brand websites to communicate with adult tobacco consumers 21+. To gain access, we require visitors to confirm they are adult tobacco consumers and we use an age-verification process to confirm they are 21 years of age or older. Some of our companies, including Helix and PM USA for IQOS, sell age-restricted products through branded e-commerce websites. In addition to the age-verification process, the sites are designed to comply with all laws involving the sale and delivery of tobacco.

The external vendor that manages our electronic age-verification process conducts quarterly audits. In 2020, each of these quarterly audits reflected a 100% effectiveness rate in screening out persons under the minimum age.

If our tobacco companies advertise in traditional media, they limit these ads to newspapers, magazines and other publications that meet the criteria of an "adult

Examples of our tobacco companies’ marketing practices include:

• connecting with adult tobacco consumers through direct mail and websites;

• supporting product launches in adult-only facilities;

• working with retailers to merchandise tobacco products responsibly;

• denying requests to use their brands in movies, television, video games and other entertainment media; and

• advertising only in publications that meet the Food and Drug Administration’s proposed criteria for an adult publication.

Our marketing practices comply with all restrictions and regulations in the 1998 Tobacco Settlement Agreements as well as FDA regulation. Learn more on Altria.com.

Age-Verification on Brand Communication & E-Commerce Websites

We limit access to our tobacco brand websites to adult tobacco consumers 21+. We require consumers to confirm that they are adult tobacco consumers and we use an electronic age-verification process to ensure they are 21 years of age or older. In order to purchase product on an owned e-commerce site, or to access branded marketing materials on our websites, consumers must meet these age requirements.

Electronic age-verification works by comparing personal information an individual provides against public-records databases and other third-party data sources to find matching records that independently verify the personal information and confirms that the individual is old enough to access the website. If the individual’s age cannot be verified, then they are denied access to the branded marketing portions of our tobacco brand websites, and such consumer cannot purchase products on our e-commerce websites.

To further prevent underage persons from accessing our tobacco brand websites, our sites are compatible with age-filtering software. Such software can be used to block access to websites considered unsuitable for children.

We also carefully consider responsible marketing practices as we venture into third-party e-commerce partnerships for our innovative, non-combustible tobacco products. As those partnerships continue to evolve, we are exploring how best to codify our responsibility expectations and monitor adherence to our contractual responsible marketing practices.

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Protecting our Consumers – Data Security

We collect personal information as part of our age-verified adult tobacco consumer database and we take protecting that data seriously. We continue to make investments in administrative, technical and physical safeguards intended to protect our information systems and data from cyber threats, including human error and malicious acts. Our safeguards include employee training, testing and auditing protocols, backup systems and business continuity plans, maintenance of security policies and procedures, monitoring of networks and systems, and third-party risk management.

Engaging New Suppliers in Underage Prevention

In pursuit of our Vision, our IQOS and on! marketing teams are testing new approaches to engage effectively with adult tobacco consumers while limiting reach to non-users, especially anyone under the legal age of purchase. As these brands work with new vendors to execute innovative solutions, Altria’s infrastructure for training marketing suppliers in our responsible marketing practices remains a foundational system to support our efforts. A real-world case study, played out earlier this year, reinforced the importance of our focus on continuous evaluation and improvement.

In February and March 2021, IQOS halted paid digital media after an IQOS national MRTP ad was inadvertently displayed on the online learning platform Quizlet – a website that was on the brand’s digital media “deny” list of websites where IQOS ads should never be displayed. An initial investigation found that a supplier process error resulted in delivery of ads to Quizlet.

IQOS engaged FDA on the incident and began an external, third-party audit of its digital advertising processes. Additionally, IQOS took immediate action to replace its “deny” list approach with an “approved” list – where ads are only delivered on a vetted and approved list of websites. IQOS resumed digital advertising using this approach in April 2021.

While the IQOS team took proper precautions and acted swiftly with corrective action, the event highlighted the importance of understanding the issues that may arise when we use a supplier for these purposes. With this insight, a cross-functional team, including Corporate Audit, Procurement, Digital Marketing Services and Corporate Citizenship, commenced efforts to enhance marketing supplier contracts, onboarding, training and systems inspections – with emphasis on our focus, practice and supplier expectations to market responsibly and prevent underage use.

publication" under the FDA's proposed definition. Under this standard, an adult publication is one:

� whose readers younger than 18 years old make up 15% or less of the total readership as measured by competent and reliable survey evidence; and

� that is read by fewer than two million persons younger than 18 as measured by competent and reliable survey evidence.

Social media has become a powerful channel for companies to stay connected to their consumers. Most of our tobacco companies do not use social media to market or otherwise display product or brand imagery. However, as IQOS is a product authorized by the FDA, PM USA has taken a measured and responsible approach to educate and engage adult smokers and IQOS consumers 21+ via these channels. PMTA authorization requires IQOS to share all marketing assets with the FDA 30 days prior to placement, which includes all marketing assets used on IQOS’s social media pages on Instagram and Facebook.

IQOS’s age-gated (to 21+), branded pages on Instagram and Facebook provide a channel for IQOS product news, education and customer support. These pages also foster a sense of community among adult IQOS consumers and smokers 21+ interested in IQOS and provide positive encouragement as they completely transition away from cigarettes.

IQOS also has a Twitter presence, but as this medium cannot be age-gated, it is used strictly for customer care should an adult 21+ IQOS consumer have a question about the product.

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Policy Advocacy & Regulatory EngagementOur policy efforts focus in two areas:

1. Promote policies that address tobacco harm reduction for adults while addressing underage use of tobacco products; and

2. Promote policies that contribute to the healthy development of youth ages 12 to 18.

In 2019, we championed legislation to raise the legal age of purchase for tobacco products to 21 at the state and federal levels. We are pleased with the December 2019 federal action to enact “Tobacco 21” nationwide. In addition, as of June 2021, 39 states and Washington D.C. had enacted laws raising the minimum age. We believe this is essential to reducing youth tobacco use, especially within the e-vapor category. Data shows that youth under 18 get tobacco products – including e-vapor – primarily through social sources, like friends or siblings who are 18 or older. Many high school students in the U.S. turn 18 years old before they graduate. By raising the minimum age to 21, high school students should not be able to purchase tobacco products legally.

While social sources are the primary point of access for underage (12-17 year olds) tobacco users, 9.3% of youth users reported sourcing their e-vapor products from stores. That’s why, through our Value Chain and Preventing Underage Use goals, we’re committed to enhancing underage access prevention at retail.

Source: ALCS analysis of the PATH Wave 4.5 Youth Data.

Usual Source of Access to Tobacco Products Among Past 30-day Tobacco Users Ages 12-17 (2017-2018)

As communication channels evolve, we will consider the implications for how we responsibly engage with our adult tobacco consumers. As always, we will be guided by our current marketing practices, including taking steps designed to limit reach to unintended audiences.

Our companies’ commitments to responsible marketing extend across our product portfolios, to include innovative products like on!® nicotine pouches. New products that have already received FDA authorization, like IQOS, are subject to FDA’s advanced review of marketing materials and post-market surveillance requirements. These regulatory requirements reinforce our standards for responsible marketing and serve as affirmation of our companies’ adherence to our commitments. However, FDA has not issued regulations to broadly restrict manufacturer marketing practices of newer tobacco products, like oral nicotine pouches.

In absence of these regulations, we believe all manufacturers have a responsibility to limit reach to unintended audiences, including non-users and people under the legal age to purchase tobacco products. Doing so will help to oversee that these innovative tobacco products do not cause unintended societal harm and preserve the viability of these products as potential pathways for adult tobacco consumers interested in transitioning away from cigarettes.

That’s why Helix Innovations, manufacturer and marketer of on!® nicotine pouches, is focusing marketing communications to adult tobacco consumers 21+ and taking specific actions to prevent access and awareness among youth and non-tobacco users. For example, the on! brand only connects with adult tobacco consumers 21+ through direct mail, email, vetted digital advertising channels and its age-verified owned e-commerce website. The brand also only conducts one-to-one consumer engagements for which they age verify every adult tobacco consumer is 21+. Helix also holds retail partners – including third-party e-commerce websites with which we have contractual agreements – to high standards of responsibility while providing tools and resources to prevent underage access. Examples include requiring non-self-service product placement at retail and imposing quantity limits on individual orders in its owned e-commerce site, contracted third-party e-commerce sites and contracted tobacco retail channels. We believe Helix’s approach leads the oral nicotine pouch category by example, in the absence of FDA-issued marketing regulations.

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Underage Access PreventionRetailer compliance with the new federal minimum age law is critically important in preventing anyone under 21 from accessing tobacco, including e-vapor products. Our tobacco companies sell their products to wholesalers, who in turn, sell to retailers and other wholesalers. Altria Group Distribution Company ("AGDC") provides the sales and distribution services for our tobacco companies. Wholesalers and retailers, also known as our "trade partners,” play critical roles in our product distribution network. AGDC calls on nearly 210,000 retailers across the country, representing approximately 92% of tobacco industry volume. Our goal is to enhance trade partner participation in underage access prevention programs to establish retail and future sales channels as the most trusted place to responsibly sell and distribute tobacco products.

AGDC works with our trade partners to execute our retail trade programs, which are built on effective category management principles, and help retailers responsibly manage their tobacco category. Our retail trade program includes features that go beyond federal law to help prevent underage access to tobacco products, such as store clerk training and underage access prevention signage. In addition, we've developed rigorous compliance and training systems to govern retail marketing materials. In some tobacco categories, we also offer financial incentives to retailers who refrain from placing any tobacco products on top of or below the front of the selling counter.

In 2019 AGDC announced a new retailer incentive program to further encourage responsible retailing through age validation technology at the point of purchase. In the second half of 2020, AGDC completed the first assessment of the Age Validation Technology program. To participate in the

incentive program, retailers must implement a technological solution that requires an electronic scan of a consumer’s government-issued identification (e.g., driver’s license) to purchase any tobacco product. In 2020, the program was validated in approximately 65,000 stores, representing 47% of PM USA volume and 58% of e-vapor category volume.

AGDC continues to promote the program and aims to increase participating stores to 120,000. In the first half of 2021, over 75,000 stores have participated . Throughout the year, AGDC is focused on completing a second wave, presenting the program to approximately 128,000 stores between July 2021 and October 2021, as well as continuing to validate the program in participating retail locations.

Alex McGuireSenior Manager Trade Marketing, Altria Group Distribution Company

By providing hardware and tech support, we are making age validation technology ("AVT") more accessible to many small chains and "mom-and-pop" stores. While we had great success in our first wave, it is vital that we have the right incentive structure to encourage widespread retailer participation and achieve our 2021 goals of 120,000 stores and 70% PM USA volume on AVT.

E M P L O Y E E S P O T L I G H T

Widespread Adoption of Age Validation Technology at Retail

+ Read Alex's full story on altria.com.

Learn more about state and national retailer violation rates and the SYNAR Program.

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The contract requirements include teaching store clerks how to check IDs and placing We Card™ or equivalent signs in their stores. We also require participating retailers to place signs reminding adults to not buy tobacco products for underage persons. AGDC employees validate display and placement of these required signs on every store visit using image recognition technology and they replace damaged or faded signage as needed throughout the year. Currently, 96% of the retailers supported by AGDC – over 197,000 stores – are contractually obligated to fulfill these requirements as part of one or more of our companies’ retail trade programs.

In addition to We Card™ signage requirements in our retail contracts, we are founding sponsors of the We Card™ organization, which provides retailer training and resources to help prevent underage access. Retailers participating in our trade programs and their employees can access free We Card™

“No Tobacco Sale Order” Penalties

FDA’s retail compliance check inspections monitor retail stores for violations of tobacco regulations and minimum age requirements. If violations are found, FDA issues increasing levels of monetary penalties, up to and including termination of a retailer’s ability to sell tobacco products – a “No Tobacco Sale Order” ("NTSO"). AGDC monitors FDA’s reporting on a weekly basis, and if a PM USA, John Middleton (“JMC”), U.S. Smokeless Tobacco Company ("USSTC") or Helix contracted store receives an NTSO, we suspend select retail program incentives. In alignment with the FDA penalization process, if a store receives a third NTSO, PM USA, JMC, USSTC or Helix may terminate the retailer’s contract.

2020 Verification of Retailer Signage Requirements

From March 2020 to February 2021, COVID-19 precautions impacted AGDC employees’ ability to physically call on most retail stores and verify signage compliance. During this time, there was also a natural attrition of the number of properly displayed underage tobacco prevention and We Card™ signs. To monitor that these signs are in place at contracted retail locations, we shipped over 628,000 pieces of underage tobacco prevention and We Card™ point-of-sale material in 2020.

As AGDC employees returned to the field in the fourth quarter of 2020, AGDC resumed compliance validation activities. Based on a sample of approximately 35,000 contractually obligated stores, AGDC confirmed that 91% were verified to have the required signage posted (versus 95% for the same time period in 2019) and 85% also had posted Altria-provided social access prevention signage (versus 80% for the same time period in 2019). In 2021, AGDC is reinforcing placement of We Card™ and social access prevention signage at retail through a new communication plan.

training through our retail trade website. With our support, We Card™ has trained hundreds of thousands of retail employees and distributed millions of education and training materials.

In 2020, we supported We Card™ as they conducted qualitative and quantitative research on social source access prevention. Social source access or “social sourcing” is the method through which youth get access to tobacco products through adults 21+. The data from this research will inform two access prevention pilot programs in 2021. These programs are designed to drive awareness of the issue of social source access, provide tools to help adult consumers take preventative action, and inform a nationwide campaign to prevent youth access while improving the reputation of retail as the most responsible place to buy tobacco and vapor products.

NTSO 1st 2nd 3rd

Penalty

Suspend Merchandising Payment for 1

Quarter

Suspend Merchandising Payment for 2

Quarters

Retail Contract Termination

No. Issued in 2020 14 1 0

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Positive Youth DevelopmentIn addition to the actions we’ve discussed to market responsibly and limit underage access to tobacco products, we support a range of evidence-based positive youth development programs. Positive youth development theory posits that emphasizing protective factors in kids’ lives – such as positive relationships and activities – and reducing risk factors, helps kids make healthy decisions and resist a broad range of risky behaviors, including tobacco use.

With a focus on middle school students, our Success 360° initiative aims to promote the healthy development of kids and help them avoid risky behaviors like tobacco use.

Through this initiative, Altria’s tobacco companies invest in leading youth-serving organizations such as 4-H, Big Brothers Big Sisters, Boys & Girls Clubs, Communities In Schools and The First Tee. Success 360° helps these organizations collaborate and better connect the services they provide to kids and their families in and out of the classroom. Collectively, our partners reach more than 17 million kids with a range of programs, including mentoring, adolescent substance abuse prevention and tobacco cessation programs.

We are supporting our Success 360° prevention and cessation grantees to pursue an integrated approach to programming and direct service interventions and prevention in an expanded geography of 20 states. These states were strategically selected based on where prevention partners have a footprint and youth use of tobacco products is highest. This approach is the result of increased and strengthened alignment of the prevention and adolescent cessation programs at a national level. It includes a focus on pursuing an evidence-based approach, credentials for prevention programs (including Blueprints designation) and identifying additional funding partners and revenue streams to support and promote the work. Through the University of Colorado Center for the Study and Prevention of Violence, LifeSkills Training was initiated in high schools in nine states, reaching more than 18,000 students in the first year of implementation. This reach spanned across 41 school districts and 87 schools.

Many of our Success 360° partners were hard-hit by COVID-19, with disruptions to critical programs and increased needs for the youth being served. To help them through this time, we provided additional flexibility with the use of grant contributions to support general operating needs. We also convened the Success 360° program leads on a monthly basis to create a space to engage, reflect, support one another and share best practices for navigating the pandemic as they prioritized the basic needs of the youth and families being served.

Looking ForwardThe concepts of tobacco harm reduction and youth tobacco prevention are directly linked, and we remain steadfastly committed to both as we lead the adult smoker transition to smoke-free products. For decades, we have been committed to preventing underage tobacco use. We believe kids should not smoke, vape or use any tobacco products. It's a goal we share with public health, policy makers, parents, youth-serving organizations and many others who care about young people making healthy decisions. Underage prevention is critical to our business success. It is the expectation of many of our stakeholders, including our regulator, public health and policy makers, and society. We know we must address the issue of underage prevention to have a license to operate. As we look to the future, we are deepening our commitment as leaders in the industry in preventing underage use of products intended for adults 21+. We will continue our focus across all elements of the underage prevention framework. We look forward to seeing progress in a few areas: continued engagement from our trade partners in adopting age validation technology; learning from the underage tobacco use study about youth use trends with greater frequency than possible through the national data sets; and depth and breadth of the Success 360° partners' reach and work. We believe this approach will continue to serve us well, as we are fully committed to tobacco harm reduction and offering adults enjoyable product experiences while preventing underage use.

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Appendix A: Governing Polices for Underage Tobacco Prevention & Responsible Marketing

Policies Governing Practices Related to Responsible Tobacco Marketing and Product Communication, and Underage Tobacco Prevention Information

Policy Name: Domestic Combustible Cigarette, Smokeless Tobacco and Large-Mass Cigar Advertising and Marketing Policy

PURPOSE

Our Code of Conduct states that our companies will responsibly provide information that helps the intended audience in making informed decisions regarding the purchase and use of our products. This Policy provides guidance on advertising and marketing the company’s domestic cigarette, smokeless tobacco and cigar products.

DEFINITIONS

1. AdultAn individual who is of legal age to purchase tobacco products in a particular state or locality

2. Adult-Only Facility (AOF)A facility or restricted area (whether open-air or enclosed) where the owner/operator ensures that no person younger than legal age (for tobacco products) is present or permitted to enter at any time; provided, however for those facilities not permanently restricted to Adults, the owner/operator must ensure that no person under legal age is present during the event or time period in question

3. Adult Tobacco ConsumerAn Adult who uses a tobacco product

4. Age-QualifiedIndividuals who have (a) certified their tobacco consumer status and that they are 21 years of age or older; (b) certified that they are willing to receive communications from the Company and its affiliates, subject to federal and state law; (c) provided their self-certified date of birth; and (d) had their age verified as 21 years of age or older by either a face-to-face examination by a Company representative of the individual’s valid government-issued identification (GIID), the validity of which is certified by the individual, or by completing third-party electronic age verification

5. Brand NameA brand name (alone or in conjunction with any other word), logo, symbol, motto, selling message, recognizable color or pattern of colors, or any other indicia of product identification identical or similar to, or identifiable with, those used for any brand of tobacco products

6. CartoonA drawing or other depiction of an object, person, animal, creature, or a similar caricature that satisfies any of the following criteria: (a) the use of comically exaggerated features; (b) the attribution of human characteristics to animals, plants or other objects, or the similar use of anthropomorphic technique; or (c) the attribution of unnatural or extra-human abilities, such as imperviousness to pain or injury, X-ray vision, tunneling at very high speeds, or transformation. The term “Cartoon” does not include a drawing or other depiction that on July 1, 1998 was in use in a tobacco product manufacturer’s corporate logo or in a tobacco product manufacturer’s tobacco product packaging

7. Point-of-Sale (POS) MaterialsPrinted promotional materials containing tobacco advertising produced by or on behalf of the operating company that are placed on the interior or exterior of retail establishments that sell tobacco products

8. Qualified Adult-Only Facility (QAOF)An AOF that:

• requires each person present to provide to a law enforcement officer (whether on or off duty) or to a security guard licensed by a governmental entity a GIID showing a photograph and an age of 21 years or older;

• does not sell, serve or distribute alcohol;

• is not located adjacent to or immediately across from (in any direction) a space that is used primarily for Youth-oriented marketing, promotional or other activities;

• is a temporary structure constructed, designated, and operated as a distinct enclosed area;

• is enclosed by a barrier that

— is constructed of, or covered with, an opaque material (except for entrances and exits);

— extends from no more than 12 inches above the ground or floor (which area at the bottom of the barrier must be covered with material that restricts visibility but may allow airflow) to at least 8 feet above the ground or floor (or to the ceiling);

— prevents persons outside the QAOF from seeing into the QAOF, unless they make unreasonable efforts to do so; and

• does not display on its exterior

— any tobacco product advertising;

— a Brand Name other than in conjunction with words for an area or enclosure to identify an AOF facility; or

— any combination of words that would imply to a reasonable observer that the operating company has a Brand Name sponsorship

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Appendix A: Governing Polices for Underage Tobacco Prevention & Responsible Marketing (Continued)

9. SamplingProviding, without requiring some form of consideration in exchange, packages or samples of tobacco products to adult tobacco consumers for promotional purposes

10. YouthA person or persons under 18 years of age

REQUIREMENTS

1. Marketing and Consumer Research Audience MatrixAll advertising and marketing initiatives will be directed only to Adult Tobacco Consumers of the relevant tobacco products based on the Marketing and Consumer Research Audience Matrix.

2. Advertising ContentMarketing and advertising materials must be created, developed and executed in compliance with the following requirements:

• Take no action, directly or indirectly, to target Youth in the advertising, promotion, or marketing of its tobacco brands or any action the primary purpose of which is to initiate, maintain, or increase the incidence of Youth tobacco use.

• Take no action, directly or indirectly, aimed at increasing the incidence of tobacco use.

• No advertisement may contain a Cartoon.

• No one depicted in advertising may be, or appear to be, under 25 years of age.

• No advertisement may suggest that tobacco use is essential to social prominence, distinction, success or sexual attraction.

• No advertisement may feature a person who is using tobacco in an exaggerated manner.

• Individuals depicted in advertising may appear attractive and healthy, but there can be no suggestion that attractiveness and good health are due to tobacco use.

• No advertisement may suggest that most people use tobacco.

• No advertisement may show physical activity requiring stamina or athletic conditioning beyond that required for normal recreation.

• No advertisement may show anyone who is or has been well known as an athlete.

• No advertisement may contain sports or celebrity testimonials or testimonials of others who would have a special appeal to persons under 21 years of age.

• Claims made in advertising must be substantiated.

3. Restricted Advertising

3.1. Outdoor/TransitNo advertising on billboards, wall murals, bus stops, taxi tops, or other outdoor or transit media with the exception of signage permitted by the Master Settlement Agreement (MSA) or the Smokeless Tobacco Master Settlement Agreement (STMSA).

3.2. Product PlacementNo payments for product placement and no providing product, product packages, product advertisements or other items bearing branding to third parties for use in movies, theatrical productions, television shows or video games (except media that are not intended to be distributed or displayed to the public or are intended to be viewed in AOFs or QAOFs).

3.3. Television, Radio and TelephoneNo advertising on television, radio or by telephone.

3.4. Sponsorship• Cigarettes and Smokeless Tobacco: Do not sponsor or cause to be sponsored

any athletic, musical, artistic, or other social or cultural event, or any entry or team in any event, in the Brand Name or using any other indicia of any brand.

• Cigars: Do not sponsor or cause to be sponsored any athletic, musical, artistic, or other social or cultural event, or any entry or team in any event, in the Brand Name or using any other indicia of any brand without approval of PM USA President & CEO.

3.5. Branded Apparel or MerchandiseDo not distribute branded apparel or other branded merchandise or services to consumers.

4. Permitted Advertising (subject to described restrictions)

4.1. PrintAll advertising materials in general circulation print media must meet applicable placement and readership requirements (maintained by marketing compliance group). Philip Morris USA does not currently advertise its cigarette brands in consumer magazines and newspapers.

4.2. Direct Marketing• Direct marketing materials may be mailed in accordance with the Intended

Audience Matrix only to Adult Tobacco Consumers who are Age-Qualified and on the AGDC mailing list.

• Direct marketing materials may be emailed in accordance with the Intended Audience Matrix only to Adult Tobacco Consumers who are Age-Qualified, on the AGDC mailing list, and who have opted to receive email messages.

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• All commercial emails must include a mechanism to allow recipients to discontinue further email communications.

4.3. Internet• Advertising is permitted over the Internet through branded websites and

electronic communications (e.g., email messages).

• Branded websites and electronic communications are restricted to Age-Qualified Adult Tobacco Consumers in accordance with the Intended Audience Matrix.

• Electronic communications must comply with applicable federal, state, and local laws and regulations.

4.4. RetailEach operating company markets and advertises its brands to that brand’s intended audience (per the Intended Audience Matrix) by placing POS Materials:

• Outside retail stores, or inside retail stores facing out, each sign being limited to 14 square feet or less in size.

• Inside retail stores within or near the tobacco category (including exterior doors facing inward when other tobacco advertising is present).

4.5. Adult-Only Facilities and Qualified Adult-Only Facilities• Brands may be advertised in AOFs and QAOFs.

• An outdoor sign may be placed at the site of an AOF or QAOF during the period the facility or enclosed area constitutes an AOF or QAOF, but in no event more than 14 days before the activity, and that does not advertise any tobacco products (other than by using a Brand Name in conjunction with words to identify the AOF or QAOF).

• Promotions may be conducted in AOFs and QAOFs, including but not limited to sweepstakes, contests and distribution of coupon offers.

• Availability of offers within an AOF or QAOF is restricted to smokers and tobacco consumers 21 years of age or older (per the Intended Audience Matrix).

4.6. Promotions• Entry in brand contests, sweepstakes and incentive programs is limited to

Adult Tobacco Consumers 21 years of age or older in accordance with the Intended Audience Matrix.

• Product and price promotions at retail are intended to be available to Adult Tobacco Consumers.

4.7. Non-Tobacco ItemsThe following items may be distributed: items that do not include a Brand Name; coupons using a Brand Name; and materials whose function is solely to advertise tobacco products.

5. Sampling and Sales

5.1. No Sampling of cigarettes.

5.2. No Sampling of cigars.

5.3. Smokeless tobacco may be sampled only in a QAOF. Only one sample package may be taken out of a QAOF by a tobacco consumer each day. This sample package may contain no more than 0.53 ounces (15 grams) or 8 individual portions of smokeless tobacco.

5.4. No sale or distribution of cigarettes or smokeless tobacco to consumers through the mail or other direct delivery services.

5.5. No sale or distribution of cigars to consumers through the mail or other direct delivery services without approval of PM USA President & CEO.

6. Warnings and Notices

6.1. Smokeless tobacco advertising must comply with the Comprehensive Smokeless Tobacco Health Education Act of 1986 (CSTHEA), as amended by the Family Smoking Prevention and Tobacco Control Act, which governs warning statement content, size, format and type size.

6.2. Cigarette advertising must comply with the Federal Cigarette Labeling and Advertising Act, as amended by the Family Smoking Prevention and Tobacco Control Act, which governs warning statement content, size, format and type size.

6.3. Cigar advertising must comply with the FTC Complaint and Consent Order, dated August 18, 2000, which governs warning statement content, size, format, type size, safety margins and rotation for cigars.

6.4. The Company may inform Adult Tobacco Consumers in advertising, POS Materials, and on packaging, that they can find more information about the Company, its products, or quitting by visiting the Company website or by telephone (e.g., “For product information visit [Company web address] or call [Company telephone number]”).

6.5. Public health conclusions and other information may be communicated on or in packaging.

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7. Process to Ensure Advertising and Marketing Compliance with RequirementsTo help satisfy company policies and commitments, advertising and marketing materials must be reviewed by the Marketing Compliance group and Law department through the following process prior to production:

Stage 1: Promotion Concept

Review and discuss preliminary promotional concept. Identify concerns or issues and offer options and recommendations that will successfully achieve both compliance obligations and business objectives.

Stage 2: Prototype & Comp

Review for layout and copy to help ensure necessary requirements are satisfied and the offer is clearly communicated. Make required changes prior to creating art and keyline.

Stage 3: Intellectual Property

Conduct appropriate intellectual property reviews and searches, including trademark reviews and searches.

Stage 4: Art & Keyline

Review artwork, copy, and required elements to help ensure the accuracy of the promotional offer and the placement of required regulatory elements. Ensure copyright notice is placed on advertising and marketing materials.

8. Additional InformationGiven the complexity and evolution of the regulatory environment, contact the ALCS Marketing Compliance group or your Law support for clarification or more information about advertising and marketing compliance.

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Policy Name: Product Communication

PURPOSE

Our Code of Conduct states that our companies will responsibly provide information that helps the intended audience in making informed decisions regarding the purchase and use of our products. This Policy outlines requirements governing product communications for each company’s smokeable and smokeless products when providing marketing or more-general product information to the general public. These communications include applicable legal and company policy requirements and express company commitments.

DEFINITIONS

1. Public Health An authoritative body that has been officially appointed or otherwise sanctioned by either a national or international governing body to serve in the capacity of making Public Health determinations and communicating these determinations to the public; examples include U.S. Surgeon General, U.S. Centers for Disease Control, U.S. National Toxicology Program, U.S. National Cancer Institute, World Health Organization (WHO), and sub-organizations within WHO such as the International Agency for Research on Cancer.

REQUIREMENTS

2. General Product Communications RequirementsThe following are the general requirements for product communications, through appropriate vehicles, including in advertising for marketing purposes and on Company websites for informational purposes.

2.1. When communicating with the public, defer to authoritative statements of Public Health on matters of the risks of tobacco use, and share findings of Public Health about Company products.

• Authoritative statements of Public Health are conclusive statements intended to be relied upon as a guide or precedent.

Note: This requirement does not preclude appropriate communications by Company employees with scientists, with regulators, or in a litigation context. When appropriate, employees are authorized to communicate on topics relevant to their specific function and role while engaging and communicating externally.

2.2. Disclose to consumers known adverse effects of the Company’s tobacco product and provide warnings regarding reasonably foreseeable misuse.Note: This requirement may be satisfied by government-mandated warnings.

2.3. Disclose major food allergens consistent with the U.S. Food and Drug Administration requirements for major food allergen disclosure.

3. Website Product InformationThe Company provides detailed information about the Company’s tobacco product on the Company website. This includes information about ingredients, health effects, manufacturing, and design. This information is not intended to market or advertise Company brands.

4. Additional InformationGiven the complexity and evolution of the regulatory environment, contact the ALCS Marketing Compliance group or your Law support for clarification or more information about product communications.

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Appendix B: Good Conversion Principles

As we bring IQOS to market, there are seven principles that form the foundation of all our consumer engagements and guide everything we do.

1. Our goal is for adult smokers to switch completely to IQOS.

2. IQOS is for adult smokers who want to continue enjoying tobacco products. IQOS is not for people who have never used tobacco products or who have quit using tobacco products.

3. We provide adult smokers with factual, scientific information, and we are committed to supporting them in their switch from cigarettes to IQOS.

4. IQOS should not be used by anyone under the legal age to purchase tobacco, and we age-verify every adult smoker in our one-to-one consumer engagements.

5. To experience the benefits of IQOS, adult smokers should switch completely from cigarettes to IQOS.

6. IQOS is not an alternative to quitting. The best choice for consumers concerned about the health risks of smoking is to quit altogether.

7. IQOS is not risk free or a safe alternative to cigarettes.

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About this Report Unless otherwise noted, this report includes data and progress for Altria Group, Inc. and its wholly owned subsidiaries for calendar year 2020. It covers Altria’s tobacco operating companies Philip Morris USA Inc., John Middleton Co., U.S. Smokeless Tobacco Company LLC, Helix Innovations LLC and wine company, Ste. Michelle Wine Estates Ltd, representing more than 99 percent of revenue of Altria’s family of companies. The report also covers other Altria subsidiaries including Altria Group Distribution Company, which provides sales and distribution services to certain Altria operating companies, and Altria Client Services LLC which provides various support services in areas such as legal, regulatory, consumer engagement, finance, procurement, human resources and external affairs to Altria and its companies. Philip Morris Capital Corporation, Altria’s subsidiary which maintains a portfolio of finance assets, is not in scope. Altria and its companies operate principally in the United States and substantially all of Altria’s net revenues are from sales generated in the United States.

Certain statements in this report are “forward-looking statements” within the meaning of Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on current plans, estimates and expectations and projections, and are not guarantees of future performance. They are based on management’s beliefs, projections or expectations that involve a number of risks and uncertainties, any of which could cause actual results to differ materially from those expressed in or implied by the forward-looking statements. Altria undertakes no obligation to publicly update or revise any forward-looking statement in this report. The risks and uncertainties relating to the forward-looking statements in this report include those described in Altria’s publicly filed reports, including its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q.

If you have questions about our report, please feel free to contact us.