Strategic Performance and Market Dynamics

• Delivered 7.3% adjusted diluted EPS growth driven by strong smokeable product income and disciplined execution across the total nicotine portfolio.

• Cigarette volume declines moderated to 4% (adjusted), attributed to a slowdown in cross-category movement as the illicit flavored e-vapor market shows signs of saturation and increased enforcement.

• Marlboro maintained premium segment dominance with 59.5% share, while the 'Basic' brand was strategically utilized to capture price-sensitive consumers trading down within the discount segment.

• The oral tobacco segment saw significant growth in nicotine pouches, with the category now representing over 58% of total oral tobacco volume.

• Launched on! PLUS nationwide, reaching 100,000 stores and securing premium retail positioning in 90% of contracted volume locations to drive long-term brand equity.

• Management noted early signs of moderation in illicit disposable e-vapor demand, citing supply-related disruptions and federal-local enforcement actions as key drivers.

• Strategic focus remains on a 'total portfolio approach,' using data-driven revenue growth management (RGM) to balance premium brand loyalty with discount segment competitiveness.

2026 Outlook and Strategic Assumptions

• Reaffirmed full-year 2026 adjusted diluted EPS guidance of $5.56 to $5.72, representing 2.5% to 5.5% growth.

• Shifted growth expectations to be more balanced between the first and second halves of the year, reflecting stronger-than-anticipated Q1 volume performance.

• Guidance assumes continued macroeconomic pressure on adult nicotine consumers, specifically citing the cumulative impact of inflation and rising gas prices.

• Anticipates FDA authorization decisions for on! PLUS flavor extensions within the 180-day statutory timeline, citing the use of 'generally recognized as safe' (GRAS) ingredients.

• Expects a steady increase in duty drawback benefits and export volumes throughout the remainder of the year as the import-export business scales.

Regulatory and Structural Developments

• On! PLUS is currently the only product accepted into the FDA's pilot program designed to streamline PMTA reviews for oral nicotine pouches, with final marketing authorizations still under review.

• Retired just over $1 billion of debt in February, maintaining a total debt-to-EBITDA ratio of 1.9x in line with long-term targets.

• Management highlighted the 'Cowboy Cut' Marlboro extension as a tactical tool to retain price-sensitive premium smokers while celebrating the brand's heritage.

• The Master Settlement Agreement (MSA) prevents Altria from using legacy tobacco brands like Copenhagen for tobacco-free nicotine pouches, necessitating the standalone on! brand strategy.