USSTB 2012 Retail Program External Customer Presentation Effective April 1, 2012 1 | Altria Group Distribution Company l 02/22/2012
Smokeless Category: Overall Value Growing Category¹ Robust Margins¹ Valuable Consumer² Index of C-Store Basket Spend by Type of Adult Tobacco Consumer Adult Tobacco Buyers 21+ vs. Average Adult C-Store ¹ Source: ALCS MICR Internal Estimates. ² Source: VideoMining Report, May 2011 . 2 | Altria Group Distribution Company l 02/22/2012
Adult MST Consumer Preferences Adult MST Consumers are likely to go out of their way when selecting a store if that store consistently: 1. Maintains their brand in-stock 2. Offers special deals on their brand 3. Provides fresh product 4. Offers a wide selection of MST Products Source: Retail Experience Study; October, 2011 3 | Altria Group Distribution Company l 02/22/2012
USSTB 2012 Retail Program A pay for performance program to help Retailers meet Adult MST Consumer expectations Program Objectives: • Ensure USSTB Product Availability and Freshness • Clearly Communicate Value and Brand News to the Adult MST Consumer • Special Price Promotions • New USSTB SKUs • Product Promotions 4 | Altria Group Distribution Company l 02/22/2012
USSTB 2012 Retail Program All program comparisons in reference to the USSTB 2010 Retail Program What’s What’s What’s Staying the Same? Eliminated? New or Enhanced? • • • Smokeless Tobacco Products Flat Rate Payment Options Base Payment Share of Space Merchandising¹ • • Copenhagen Consistent Fixture Plan Merchandising • New Brand Acceptance and Ordering Incentive Payment Look Repurchase Requirements • • Option to merchandise on a Enhanced Fixture Look Option Fixture if participating in the and Enhanced Fixture Look Visibility Plan² Option Payment • • 4 foot minimum size USSTB Designated SKUs requirement of the Smokeless • USSTB Designated SKU Tobacco Product Category Space Purchase Requirements under the Fixture Plan • Retail Price Promotion Participation Requirement • Quarterly Insightsc3m Access ¹ Smokeless Tobacco Products and Signs merchandised in the bottom 24” of a cigarette Fixture pursuant to Retailer’s agreement with a cigarette manufacturer will not be included in Smokeless Tobacco Product Category Space for purposes of determining the USSTB Share of Smokeless Tobacco Product Category Space ² A store that merchandises Smokeless Tobacco Products on one or more Fixtures may only participate in the 5 | Altria Group Distribution Company l Final Fixture Plan
Revised Designated USSTB SKUs 2012 Requirement: Maintain saleable inventory and visibly merchandise all 7 Designated USSTB SKUs , as specified by USSTB USSTB 2010 Retail Program USSTB 2012 Retail Program Designated SKUs Designated SKUs Region 1 Regions 2-4 Region 5 SKUs Varied By Geography Top 7 USSTB SKUs Nationally 6 | Altria Group Distribution Company l 02/22/2012
USSTB Designated SKU Purchase Requirements 2012 Requirement: A Store must meet both the Copenhagen Weekly Purchase Requirement* and the Other Designated SKU Monthly Purchase Requirement. • Copenhagen Weekly Purchase Requirement: – A Store must purchase from a STARS-reporting wholesaler for 12 out of 13 STARS weeks during a STARS Quarter, in addition to any USSTB promotional product, both: • One straight stock 5-can roll of Copenhagen Fine Cut Natural; and • One straight stock 5-can roll of Copenhagen Long Cut Natural • Other Designated SKU Monthly Purchase Requirement: – A Store must purchase from a STARS-reporting wholesaler in addition to any USSTB Promotional Product, at least one straight stock 5-can roll of each of the following Designated USSTB SKUs during each STARS Month: • Copenhagen Long Cut Wintergreen, Skoal Fine Cut Wintergreen, Skoal Long Cut Wintergreen, Skoal Long Cut Straight and Skoal Long Cut Mint *Same measurement as the USSTB 2010 Retail Program’s Copenhagen Consistent Ordering Incentive 7 | Altria Group Distribution Company l 02/22/2012
USSTB Designated SKUs Purchase Requirements Example Failure to meet either , (1) the Copenhagen Weekly Purchase Requirement, or (2) the Other Designated SKUs Purchase Requirements during a STARS Quarter will result in the Store not earning its Merchandising Payment for that STARS Quarter. Copenhagen FCN & LCN Can Purchases by STARS Week Week 1 2 3 4 5 6 7 8 9 10 11 12 13 Copenhagen FCN 15 5 5 5 10 5 15 15 10 5 5 5 10 Pass Copenhagen LCN 20 15 15 10 5 0 20 15 5 10 5 5 5 (12 of 13 weeks) Pass / Fail P P P P P F P P P P P P P Other USSTB Designated SKU Can Purchases by STARS Month Month 1 Month 2 Month 3 Copenhagen LCWG 15 10 15 Skoal FCWG 5 10 10 Fail Skoal LCWG 10 5 5 (1 of 3 months) Skoal LCS 5 0 10 Skoal LCM 5 5 5 Pass / Fail Pass Fail Pass USSTB Designated SKU Purchase Requirements were not met, resulting in the Store not earning its Merchandising Payment for that quarter 8 | Altria Group Distribution Company l 02/22/2012
Retail Price Promotion Participation Requirement 2012 Requirement: A Store must participate in and comply fully with the terms of all USSTB Retail Price Promotions for which it is eligible Measurement: Any Store that does not participate in and comply fully with the terms of a USSTB Retail Promotion in which the Store is eligible to participate, will be issued a systematic non-performance resulting in the Store forfeiting one month’s Merchandising Payment . Example Month 1 Month 2 Month 3 Store Participating in all USSTB Yes No Yes Retail Price Promotions USSTB Retail Program Yes No Yes Merchandising Payment* *Subject to satisfaction of all USSTB 2012 Retail Program requirements 9 | Altria Group Distribution Company l 02/22/2012
Fixture Plan Merchandising: Base Look 1 New Base Look Elements: 1. Dual-Brand Fixture Header 2. Vertical Brand Blocking 2 3. Deal Zone 3 Fixture Plan Base Payment: 2 ₵ per can payment* *Subject to satisfaction of all USSTB 2012 Retail Program requirements Image shown with USSTB Hex Tray shelf, an optional merchandising resource available to USSTB 2012 Retail Program Fixture Plan participants 10 | Altria Group Distribution Company l 02/22/2012
Enhanced Fixture Look Option Merchandising Available to Fixture Plan Participants Only 1 Enhanced Fixture Look Option 0 00 Elements: 1. Single-Brand Fixture Header 2 0 00 2. Secondary Brand Sign • Within USSTB Portion of the Primary MST Merchandising Area • Minimum Size of 12” x 12” Enhanced Fixture Look Option: 4 ₵ per can payment* *Subject to satisfaction of all USSTB 2012 Retail Program requirements Image shown with USSTB Hex Tray shelf, an optional merchandising resource available to USSTB 2012 Retail Program Fixture Plan participants 11 | Altria Group Distribution Company l 02/22/2012
Visibility Plan Merchandising USSTB Showcase Merchandising Units Minimum Number of USSTB Facings Average Industry Smokeless Tobacco USSTB Products Required Facings Purchased Per Week 0 - 25 8 26 - 50 12 51 - 100 20 101 - 150 22 151 - 200 24 Visibility Plan Base Payment: 201 - 300 26 2 ₵ per can payment* 301+ 30 *Subject to satisfaction of all USSTB 2012 Retail Program requirements 12 | Altria Group Distribution Company l 02/22/2012
Interim Merchandising Requirements Performance under all Program Requirements, including the USSTB Designated SKU Purchase Requirements , is required beginning with the Effective Date of the Agreement, except for the following, which must be in place by May 30, 2012: Fixture Plan: • USSTB Fixture Header (Single-Brand or Dual-Brand) • Secondary Brand Sign (for Enhanced Fixture Look Option only) • USSTB Share of Space¹ Visibility Plan: • USSTB Showcase Merchandising Units¹ • Minimum Number of USSTB Facings¹ ¹ If participant is unable to achieve full merchandising values as outlined in the USSTB 2012 Retail Program, due to lack of available AGDC merchandising resources, participant must maintain its current merchandising, as designated by USSTB, with regards to the requirements noted above until AGDC resources become available and are provided to such participant. During such period, a participant will be deemed to have met their respective plan merchandising requirements. 13 | Altria Group Distribution Company l 02/22/2012
Retail Website Access Requirement • 2012 Requirement : Beginning Q2 2012, Stores must log-on to www.insightsc3m.com each quarter¹ • The insightsc3m.com website provides retailers with instant access to: • Retail Trade Program presentations, sample agreements, and your signed contract • Trade Announcements • Up to 18 months of account specific AGDC payment information • Account specific Price and Product Promotion information • Access to EFT registration and We Card resources • Tobacco News and Consumer Insights ¹ Failure to log-on to www.insightsc3m.com each STARS quarter will result in a non- performance and reduction of one- month’s merchandising payment for the corresponding STARS quarter. 14 | Altria Group Distribution Company l 02/22/2012
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