Good day, and welcome to the Altria Group 2023 first quarter earnings conference call. Today's call is scheduled to last about one hour, including remarks with Altria's management and a question and answer session. In order to ask a question, please press star followed by the number 1 on your touch-tone phone at any time. Representatives of the investment community and media on the call will be able to ask questions following the conclusion of the prepared remarks. I would now like to turn the call over to Mac Livingston, Vice President of Investor Relations with Altria Client Services. Please go ahead, sir. Thanks, Katie. Good morning, and thank you for joining us. This morning, Billy Gifford, Altria's CEO, and Sal Mancuso, our CFO, will discuss Altria's first quarter business results. Earlier today, we issued a press release providing our results. The release, presentation, quarterly metrics, and our latest corporate responsibility report are all available at altria.com. During our call today, unless otherwise stated, we're comparing results to the same period in 2022. Our remarks contain forward-looking and cautionary statements and projections of future results. Please review the forward-looking and cautionary statements section at the end of today's earnings release for various factors that could cause actual results to differ materially from projections. Future dividend payments and share repurchases remain subject to the discretion of our board. We report our financial results in accordance with U.S. generally accepted accounting principles. Today's call will contain various operating results on both a reported and adjusted basis. Adjusted results exclude special items that affect comparisons with reported results. Descriptions of these non-GAAP financial measures and reconciliations are included in today's earnings release and on our website at altria.com. Finally, all references in today's remarks to tobacco consumers or consumers within a specific tobacco category or segment refer to existing adult tobacco consumers 21 years of age or older. With that, I'll turn the call over to Billy. Thanks, Mac. Good morning, and thank you for joining us. We are off to a strong start and believe our businesses are on track to deliver against full-year plans. Our tobacco businesses performed well in a challenging macroeconomic environment, and we announced exciting progress toward our vision. Highlights from our first quarter included strong adjusted diluted earnings per share growth of 5.4%, resilient end market performance from our leading brands, including Marlboro and Copenhagen, and continued volume and share growth from on!. Announcements made at our Investor Day, including updates on our pending acquisition of NJOY, the unveiling of our exciting smoke-free products and development, and the introduction of our 2028 enterprise goals. Let's now review first quarter results in more detail, beginning with the macroeconomic environment and its impact on industry cigarette volumes. In the first quarter, consumer discretionary income levels remained under pressure due to the cumulative effects of higher inflation over the past year. As a reminder, the cigarette industry experienced a higher rate of volume decline beginning in the second quarter of 2022 as smokers shifted their purchasing behaviors as a result of the widespread inflation and the rapid increase in gas prices that were exacerbated by the Russian invasion of Ukraine. While gas prices began to recede in the second half of last year, higher inflation persisted across other goods and services, and cigarette volumes remained under pressure. Moving into the first quarter of 2023, the cumulative effects of inflation over the past several quarters continued to impact tobacco consumers' discretionary income and tobacco industry volumes. We will continue to monitor these factors and their impact on tobacco consumers as we progress throughout the year. Sal will provide additional color on industry volume in his remarks. Let's now turn to the oral tobacco category. We are excited by the continued growth of oral nicotine pouch project products, which grew their share of the total oral tobacco category for the twentieth consecutive quarter. Oral nicotine pouches grew 7.1 share points year-over-year and now represent 26.2% of the oral tobacco category. Encouragingly, continued oral nicotine pouch growth was the primary contributor to the estimated 1% increase in total oral tobacco volumes over the past six months. [on!] grew on reported shipment volume to 25.2 million cans during the first quarter, an increase of 38%. On! continued its momentum at retail, growing its share of the total oral tobacco category by 2.4 share points to 6.5% and on! continued to grow its share of the nicotine pouch category, reaching 24.6% in the first quarter, up 3.3 percentage points. Notably, on! outgrew ZYN sequentially on an absolute basis in 50,000 stores. Helix delivered these impressive results as on! retail price grew 7% sequentially and 32% versus the year ago period. We believe on!'s ability to continue to grow share while effectively reducing its promotional investment demonstrates the strength of its product portfolio and brand equity. Helix is continuing its focus on strategically investing behind the brand as the category grows and remains committed to achieving profitability in 2025. Let's now move to e-vapor, which has been the most successful category in the U.S. in transitioning smokers to alternative products. We believe the category is continuing to undergo a significant reset, and we estimate that first quarter e-vapor volumes decreased 11% versus a year ago and 1% sequentially. We have observed a decline in traditional multi-outlet and convenience channel volumes, which we believe is primarily a result of the FDA marketing denial orders issued for JUUL and myblu. This volume decline has been partially offset by increased volume in non-traditional channels such as e-commerce and vape stores. We are excited about our pending acquisition of NJOY and its portfolio of e-vapor products. NJOY is the only company to receive a marketing granted order for pod-based product. We continue to believe the strength of our commercial resources can benefit smokers and vapers across the U.S. and expand smoke-free competition in stores where NJOY ACE has not been distributed. The completion of the NJOY transaction is subject to customary closing conditions, including clearance from the Federal Trade Commission. Moving to the regulatory environment, we remain optimistic about the future of harm reduction in the U.S., and we continue to encourage the FDA to make more progress for the benefit of the 47 million tobacco consumers. In February, the FDA provided a response to the Reagan-Udall Foundation's assessment of FDA's tobacco operations. We are encouraged that the agency recognizes some important areas for improvement, including developing and communicating a five-year strategic plan, improving transparency and defining more efficient product pathways, increasing enforcement of marketing denial orders, and exploring ways the agency can and should address nicotine misperceptions through communications. We look forward to learning more details on these efforts. In addition, FDA enforcement is critical to making continued progress toward reducing youth usage of e-vapor products. The FDA has the necessary enforcement tools, and we encourage them to take the appropriate action against non-compliant manufacturers. We continue to believe that harm reduction, not prohibition, is the best path forward, and we have made this clear in the public comments we submitted in response to the FDA's proposed menthol ban. Our comments highlight the many unintended consequences of prohibition, including the adoption of adulterated and unregulated products and the development of illicit markets. Unfortunately, we believe a number of those consequences are playing out in California, where a ban on flavored nicotine products went into effect in late 2022. Our operating companies immediately ceased their shipment of products to California wholesalers that we determined were not compliant with the law. Their brands continued to perform well in the state, with Marlboro and Copenhagen growing retail share sequentially. However, we remain concerned with the lack of enforcement in the state as some flavored products remained in the market. We also believe some manufacturers have introduced new products or rebranded existing ones to sidestep the purpose of the law. In March, menthol cigarettes still represented nearly 40% of the volume sold in the multi-outlet channel in California, an increase of 1.3 percentage points from January. Additionally, we have seen evidence that some California smokers are self-mentholating their cigarettes using alternative products such as flavor cards and menthol drops. We have also observed flavored e-vapor products in the market that appear to have been renamed to mislead state regulators. Trade dynamics in surrounding states suggest that some smokers are crossing state borders to purchase menthol products. For example, the share of menthol in Nevada increased 1.3 percentage points sequentially in the first quarter to 37.4%. We believe this is significant as the total share of menthol in Nevada has not been greater than 36.5% over the past four years. Compliance remains a top priority, and our government affairs teams are engaging with California government officials to encourage them to enhance enforcement and to hold all manufacturers to the same standard. Our goal is for policymakers to embrace harm reduction as the proper framework for tobacco and nicotine product regulation. In fact, public opinion strongly favors harm reduction over prohibition, and science shows a significant public health benefit of moving smokers away from combustible products toward a smoke-free future. As we described at our Investor Day, we are continuing our efforts to create the conditions for harm reduction to succeed through advocacy, engagement, and our actions. I believe we are well positioned for success in 2023 and beyond. While the external environment remains dynamic, I am confident that we have the tools in place to succeed. We have amazing brands, sound strategies, and most importantly, talented and dedicated employees. With these things in mind, we reaffirm our guidance to deliver 2023 full year adjusted diluted EPS in a range of $4.98-$5.13. This range represents an adjusted diluted EPS growth rate of 3%-6% from a $4.84 base in 2022, and excludes the potential financial impacts of the pending NJOY transaction. I'll now turn it over to Sal to provide more detail on the business environment and our results. Thanks, Billy. In the smokable product segment, we continue to execute our strategy of maximizing profitability in combustibles over the long term while appropriately balancing investments in Marlboro with funding the growth of our smoke-free portfolio. Smokable segment adjusted Operating Companies' Income was essentially unchanged, and the segment expanded its adjusted OCI margins to 60.4%, driven by strong net price realization of 10.9%. As a reminder, manufacturer price realization does not reflect the retail price change. At retail, Marlboro's net pack price increased 6.8% in the first quarter compared to last year. Total smokable segment reported shipment volumes declined by 11.1% in the first quarter as an 11.4% decline in cigarette volumes was partially offset by modest growth in cigars. When adjusted for trade inventory movement, calendar differences and other factors, we estimate that segment domestic cigarette volumes for the first quarter declined by 11% and that industry volumes declined by 9% over the same period. As Billy mentioned, we believe that industry volume trends have been negatively impacted by the cumulative effects of higher inflation, and we expect volume declines to moderate over time as the macroeconomic environment stabilizes. At retail, the discount segment grew 1.8 share points in the first quarter and 0.5 sequentially. We believe some smokers today are trading down as a result of adverse financial conditions. We continue to see increased competitive activity in the discount segment, including multiple branded discount offerings priced at deep discount levels. Marlboro share declined 0.2 sequentially and 0.6 versus the year ago period. Partially driven by the discount dynamics that I described, we have also seen a decline in Marlboro Menthol share of the total category as a result of the California flavor ban and increased competitive activity from premium menthol brands in the balance of the country. We believe that Marlboro remains the aspirational brand in the category as it retained the vast majority of its share in this challenging environment, growing its share of the premium segment to 58.5%, an increase of 0.1 sequentially and 0.7 year-over-year, while other brands ceded share in the segment. We believe that PM USA has the appropriate tools to navigate this challenging environment. For example, we recently announced a series of investments behind the Marlboro Black family of products, which are intended to provide additional support for price-sensitive Marlboro smokers. Included in these investments is the introduction of Marlboro Black Gold pack non-menthol offerings with a smooth flavor and rich taste. These products are intended to bolster the offerings within the Marlboro Black family of products and will be available nationwide beginning in May. Our RGM and advanced analytics capabilities inform the geographies and promotional rates for these strategic investments, allowing us to be precise with our spend while supporting our overall strategy for the segment. As a result of the flavor ban in California, PM USA shipments to California retailers declined 12.8% in the state, while reported industry shipments to retailers declined 18.8%. We've included more details related to first quarter California market dynamics in our metrics document that is available on altria.com. Moving to the oral tobacco product segment. Adjusted OCI grew 2.2% in the first quarter, and the segment delivered strong adjusted OCI margins of 69.3%. Total segment reported shipment volume decreased 1.8% as growth in on! was more than offset by lower MST volumes. When adjusted for calendar differences and trade inventory movements, we estimate that first quarter oral tobacco segment volumes declined by an estimated 3%. Oral tobacco products segment retail share declined 1.8 percentage points as declines in our MST brands were partially offset by the continued growth of on!. We continue to be encouraged by the performance of our oral tobacco products as on! continued to grow share in a competitive category and Copenhagen remained the category leader. Turning to our investment in ABI, we recorded $180 million of adjusted equity earnings for the quarter, up 28%. We continue to view the ABI stake as a financial investment and our goal remains to maximize the long-term value of the investment for our shareholders. As of the end of the first quarter, our debt to EBITDA ratio was 2.1. In February, we retired $1.3 billion of notes that came due with available cash. As part of the IQOS agreement we announced last fall, we expect to receive the remaining $1.7 billion plus interest from Philip Morris International by July of this year. We remain committed to creating long-term shareholder value through the pursuit of our vision and our focus on significant capital returns. We demonstrated this commitment in the first quarter by paying approximately $1.7 billion in dividends and announcing a new progressive dividend goal that targets mid-single-digit dividend growth annually through 2028. Due to the timing of our announcement of the NJOY transaction, we did not repurchase any shares in the first quarter. As of March 31st, we had $1 billion remaining under the current share repurchase program, which we expect to complete by the end of this year. With that, we'll wrap up, and Billy and I will be happy to take your questions. While the calls are being compiled, I'll remind you that today's earnings release and our non-GAAP reconciliations are available on altria.com. We've also posted our usual quarterly metrics, which include pricing, inventory, and other items. Let's now open the question-and-answer period. Operator, do we have any questions? Thank you. Once again, as a reminder, if you'd like to ask a question, please press the star followed by the number one on your touch tone phone at this time. Investors, analysts, and media representatives are now invited to participate in the question-and-answer session. We will take questions from the investment community first. Our first question comes from Bonnie Herzog with Goldman Sachs. Please go ahead. Morning, everyone. Good morning, Bonnie. Morning. I guess my first question is, you know, on your cig volumes, which, you know, were pretty pressured this quarter, down 11%, and that's actually prompting some pretty significant declines. Could you maybe just, you know, I don't know, I'm thinking take a step back for us and then, you know, give us a better sense of, you know, what you're seeing in the category? You know, how much of the pressure is attributable to down trading and then the pressures that are mounting on consumer? You know, it looks like you amended your estimates for the industry cig price elasticity, which now appears stronger. Just maybe a little more color on what's driving that change would be helpful. Sure. Thanks for the question, Bonnie. I think trying to take it in parts, I think when you think about the consumer, you know, we tried to highlight in our remarks where you're seeing the cumulative impact of high inflation across all of their spending categories. It's, it's not just high inflation in a quarter, it's the cumulative impact of that through time. I think certainly you're seeing, you know, interest rates climb, which is impacting consumers' mortgages, credit cards, car loans. Underneath all that, to respond to the consumer, we are seeing accelerated debt as well as decline of savings rates. They're using what they have available to them, but it's the cumulative impact of that. It's not new to the cigarette space. I think you can go back in history a bit. We've seen other instances where the consumer came under extreme pressure. You can look at the 2008, 2009 period or the 2001, 2002 period. You see where the consumer in those instances were under pressure because of the recessions that were taking place. Here, the other factors I described, we feel like we have the tools in place. I think you see the resiliency of Marlboro in the marketplace, gaining share in the premium space. Certainly, we've seen competitors, you know, I'll call it using your term, Bonnie, renting share at the bottom, where they're pricing some of their discount brands at deep discount levels. Really, if you think about our strategy in the cigarette space, it's to maximize profitability over the long term while making appropriate investments in Marlboro and the growth areas. I think when you think about the question about price elasticity, yeah, we made the minor adjustment at Investor Day. If you look at even the decomposition that we provide in our metrics, you can see that's been pretty consistent over the past, four periods that we showed on a 12-month moving. Really don't see anything there from a standpoint of, the consumer, anything, any changes in the price elasticity other than the minor adjustment that we made going into Investor Day. All right. Thanks for that. Just maybe one more question just as it relates to price gaps and your share. You know, your relative price gaps are, you know, have widened again this quarter, I guess, to 43%. Wanted to get a sense from you how concerned, you know, are you about that as well as, you know, Marlboro share was pressured, obviously, given some of the obvious pressures you've highlighted on the consumer. Maybe also, you know, in light of the frequency and strength of some of the pricing actions, you guys actually just took your price increase this year. Just trying to get a sense of how much, you know, room do you see for further pricing at these levels? You know, how flexible maybe are you in terms of your promotional strategy as ways to offset, you know, some of the pressures the consumer is facing? I guess I'm just wondering if there's, you know, a point where it becomes difficult to keep, you know, some of the Marlboro consumers in the brand family. Thanks. Yeah, I appreciate the question, Bonnie. I'm sure you've seen with your connections to retail as part of that price announcement, we also made a separate announcement making some adjustments to promotional spend in the marketplace. Those adjustments are really down at the local level. What we were seeing were pockets of area where we felt like Marlboro Menthol was under pressure, and Sal highlighted in his remarks the stepped up promotional spend by a competitor in the menthol space. We're making some adjustments there using various packings within the Marlboro franchise, depending on what resonates with the consumer in those localities. Some of the other adjustments are related to exactly your question, where we see the consumer under extreme economic pressure, and we're making some adjustments within the Marlboro franchise on promotional spend to counteract and give them a place where they can continue to engage with Marlboro. It is not new. We've done this before, Bonnie. I'm sure you're well aware whether you think about Marlboro Special Blend in history, which is now Special Select in the marketplace. What it allows us to do is to keep the consumer who aspires to be a Marlboro consumer engaged with Marlboro, and then as their economics conditions change, we can actually shrink that promotional discount to the Marlboro main line. What we see through time is it's actually much more efficient and effective because we see in going back in history when we did it with Special Blend, some of the consumers, as we shrunk that discount, popped back to main line, and some of them stuck with Special Blend because it was a flavor that they enjoyed. We feel like we have the tools available to us and we'll continue to monitor all those adjustments that we announced effective May were included in the reaffirmation of the guidance. All right. Thanks again for that color. Appreciate it. Sure. Thank you. Thank you. Our next question will come from Vivien Azer with TD Cowen. Your line is now. Hi. Good morning. Morning, Vivien. Thank you so much for the incremental detail around California. That was particularly helpful. You know, I noted the intra-quarter commentary, the January through March, which I really appreciated, Billy. I was wondering whether you'd be willing to expand on any of that intra-quarter commentary. How did Marlboro share trends progress through the first quarter in California, if you wouldn't mind commenting on that? Thanks. I mean, certainly you saw that overall for the quarter, Marlboro was up in share. It's telling that the consumer continues to choose Marlboro as the brand of choice. I think when you see that it's in line with some of the previous studies where consumers, when menthol is banned and they no longer have access, tend to go to the non-menthol space, and I think that's what you're seeing with Marlboro and the strength of Marlboro in California for the quarter. Understood. That's helpful. Thank you. I think encouraging to hear that you guys are gonna be introducing Marlboro Black Gold Pack. Do you have a targeted ASP or a price gap relative to main line Marlboro in mind? Recognizing, of course, it'll vary by geography. Yeah, it'll certainly vary by geography. I think you can think of it being in line with other Black packings that are in the Black family that are in the marketplace, depending on the locale and the pricing in that locale. Perfect. My last quick one. The call-out about, kind of some of the category dynamics relative to 2009 and 2001 make perfect sense. I mean, it seems like, in terms of premium share of segment, it's basically at where we were in 2009. I think one of the nuances, of course, is that in both of those prior periods, not only were there macroeconomic headwinds for the consumer, they were also compounded by the introduction of disruptive federal excise tax increases. How do you think about that? Recognizing, maybe this macroeconomic backdrop is incredibly nuanced because of COVID comms, but there's not disruptive excise tax increases happening right now. Yeah, I appreciate your question, Vivien. I think what you're seeing, though, is the exacerbation of cumulative high inflation that's put the consumer under pressure. They had been subsidized by the government to a large extent since the pandemic, and I appreciate you raising that. You saw when they had that subsidy that Marlboro actually benefited from it. The consumer is still the aspirational brand in the cigarette category. That's why we're making what we feel like are the appropriate adjustments headed into May for those pockets of areas where we see the consumer under pressure, and we'll continue to monitor and make adjustments as appropriate. That's helpful. Thank you so much. Thank you again. If you would like to ask a question, please press star one on your touch tone phone. Our next question will come from Andrei Condrea with UBS. Your line is now open. Good morning. Andre, please make sure your phone is not on mute. We are hearing no response from the line. We will go to our next question. Our next question will come from Pamela Kaufman with Morgan Stanley. Your line is now open. Hi. Good morning. Morning, Pamela. Given the elevated rate of cigarette volume declines, do you believe that it's becoming increasingly difficult to drive PM USA revenue growth through pricing in excess of volumes? It seems that higher pricing creates a virtuous cycle whereby it drives trade down and market share pressure. With the exception of 2020, which was clearly an unprecedented time, PM USA top line hasn't grown since 2017. Can you talk about how you're thinking about driving top line growth in PM USA, and if you think it's possible? Yeah, Vivien, I think I would really point you to price elasticity. When you think about price elasticity, that's the nature of a - 0.35, is that for every% that you increase price, you expect that 0.35 impact on volume. It's much, much lower than other industry categories in the CPG space. You can see in the decomposition, we try to break down what's taking place in the cigarette category. You see secular declines pretty steady. The big factor is macroeconomic that swings around. I think if you go back in history, you'll see macroeconomic, the conditions that the consumer is under will swing it up or down. You can recall in 2015, I think you were asking us did we expect volume to stay flat for a period of time. These are natural fluctuations that take place as the consumer experiences their economic conditions differently, sometimes under pressure and sometimes, they have a windfall. It's natural. We'll continue to monitor and make the adjustments that we feel appropriate. I, you know, I've mentioned in earlier answers some of the adjustments we're making going into May down at the local level where we see different conditions for consumers versus just a homogeneous, if you will, condition of the consumer across the entire U.S. That's some of the benefit of the tools and the advanced analytics team that we have, is we can make those adjustments down at the granular level. Okay. Just on your, what you're seeing in the competitive landscape, you pointed out how branded suppliers are pricing, their branded discounts at deep discount levels. Given the growth in the deep discount segment, would you reconsider your strategy on L&M? How are you thinking about, you know, participation within that segment? I appreciate it, Pamela. Certainly we're going to participate, but we're premium focused. I would remind you that strategy hasn't changed in the cigarette space for us. It's maximize profitability over the long term while making appropriate investments in Marlboro and into the growth areas. You know, you may have heard in my previous answer, it's not something that is new to the cigarette space. You know, I pointed to a couple of time periods where we saw similar things. You see as the economic conditions for the consumer change through time, it tends to revert back on a historical perspective. Again, we want to be there for consumers. It's really about keeping the consumer engaged with Marlboro, whether they want to stay with Marlboro long term or whether we put them on the journey to the smoke-free products in our portfolio. It's really about continuing to engage with the consumer through time. Thank you. Thank you. Our next question will come from Andrei Condrea with UBS. Your line is now open. Hi. Good morning. Okay. Good morning. Can you hear me now? Yes, we can. Brilliant. Yeah, thank you very much for taking my questions, Billy. I have two. The first one is just on the California menthol ban, because obviously this isn't the first flavor ban we've seen in the U.S. on a state level. If you were to just net the impact you've seen in California versus other neighboring states, could you hazard a guess as to the impact on the total U.S. level just in terms of the haircut? I think what we tried to show you was what we see thus far. I think it's too early to declare, oh, this is the total impact to the U.S. I think what we were trying to highlight is when legislation passes with the purpose of the law, they really need to give heavy consideration into how they're going to enforce that. And based on the comments we provided to the FDA with their proposed menthol ban and some of the consequences, the unintended consequences of that we're seeing play out in California. As far as your question about what the net impact, I think it's too early to tell to see how that plays out. No, that's fair. Thank you. My second one is just a bit more long-term, thinking about your international expansion with your heated tobacco capsules, but more so your nicotine pouches, whether it's on! PLUS or on!. Are you seeing any feedback for the time being on your current on! pilots? Because I know you've got one going on in London. I'm just wondering if you will take rather the foot off the pedal until you get on! PLUS online. I appreciate your question. I think when you think about it's early on in the international space. It's really about learning in the space with the consumer, receiving their feedback. We're certainly excited to be able to bring on! PLUS to the international market. We think it'll resonate well with the consumer. More to come on that. That makes sense. Cool. That's it for me. Thank you very much. Thank you. Thank you again. As a final reminder, please press star one now if you would like to join the queue. Our next question will come from Matt Smith with Stifel. Your line is now open. Hi, good morning. Just two questions for me. The first is Marlboro share performance has been fairly resilient despite the robust price realization. Could you discuss the mix of volume within the Marlboro family? Are you seeing an acceleration in consumers down trading within Marlboro that would've otherwise moved to discount brands? Nothing that I would point out as a trend break. You always have consumers moving around, and then that's really goes back to what I was referring to as far as advanced analytics. Depending on the situation of the consumer in a locality, they are gonna face different pressures than other parts of the U.S. You'll see fluctuations at the local level around the U.S. and sometimes they're in sync with each other and sometimes they're counter to each other as far as what way, the consumer is moving and what they're feeling. I think overall though, the takeaway right now is with the adjustments that we're making to our promotional spends in some locales, we're seeing a more widespread of the consumer being under economic pressure. I highlighted some of the reasons we believe that it's occurring and we want to keep the consumer engaged with Marlboro. Okay, thank you for that. You mentioned the introduction of Marlboro Black Gold pack. Are you positioning this offering to regain some of the adult smokers that traded down into discount and bring them back to the Marlboro family or more to keep Marlboro smokers within the family? We know that the consumer aspires to be Marlboro. You know, you heard my comments earlier about in the pandemic when they had extra discretionary income, Marlboro share actually went up. It shows that Marlboro is the aspirational brand in that category. It's to do both. If consumers had felt the need to trade out because they were under economic pressure, it gives them a space within the Marlboro franchise where they can reengage, or if a consumer comes under pressure, it gives them a space to continue to engage with Marlboro. It's really about the engagement with the consumers that want to choose Marlboro as their brand. Okay, thank you for that and I'll pass it on. Thank you. Thank you. At this time, we will open the lines for media. Our next question will come from Jennifer Maloney with The Wall Street Journal. Your line is now open. Sorry, I was muted. Hi, I wonder if you could explain to me what you think is going on in California with respect to the increase in menthol share to 40%. I'm trying to like imagine what's actually playing out in stores. Is it like consumers are finding retailers who still have menthol cigarettes on the shelves and then they're stocking up a lot because they think that it might not be available soon? What do you think is going on there? Yeah, I appreciate the question. If I said 40, that was by error. It was 4% in California. Okay. I apologize. I apologize for that. To answer your question directly, I think what we're seeing take place is a number of the unintended consequences that we highlighted for the FDA in our comments on menthol ban that they had proposed. I think what you're seeing take place. The purpose of the law had a purpose, and what we're seeing is the lack of enforcement and some of the ways that product is in the marketplace is counter to what the purpose of the law was. Enforcement and the thought process behind how it's gonna be enforced is extremely important to really achieve the purpose of the law. Some of the things we highlighted for you, Jennifer, we're seeing some of the consumers self-mentholating, whether that be with menthol cards or menthol drops. We are seeing menthol still in the stores in California. We saw in some of the other spaces a number of flavor products just renamed. The enforcement is necessary if they want to achieve the purpose of the law. Overall in California, are cigarette volumes down more than you would normally expect with the absence of a menthol ban? Yeah. You saw what we tried to do is in our metrics page. What we tried to do is from an industry standpoint, if you think about Q1 of 2023 to Q1 of 2022, in California they were down 18.8% and for the rest. If you think about a total U.S. standpoint, down 8.9%. You can see that— how— I'm sorry. No, go ahead. You can see that even on a sequential basis, again, California down 11.1%, total U.S. down 6.1%. It certainly had an impact on shipments in California. We also highlighted some of the cross-border dynamics. You highlighted Nevada, and I wonder, can you quantify the uptick in volumes in all of the bordering states that might mitigate somewhat the decline in shipment volumes in California? Yeah, again, I think it's too early to say, try to get to a net impact of a California ban netting out the positives. We tried to show is certainly we see what we think is indication of cross-border in Nevada, using that as an example of menthol share, its representation in Nevada is higher than it has been over the past four years. Okay, thanks very much. Thank you. Thank you. This appears to be no further questions at this time. I will now turn the call back over to Mac Livingston for closing remarks. Thanks again for everybody for joining us. Please contact the investor relations team if you have any further questions. Thanks. Have a great day. This concludes today's call. Thank you for your participation. You may disconnect at this time.