Priya Ohri-Gupta: So I really appreciate your commentary, Sal, around the intent to pay down your upcoming euro maturity later this month. I guess, as we take a step back, your euro-denominated debt has really sort of come down, I guess, partly driven by sort of the income that you’re receiving from the ABI stake given that that was sort of a natural hedge. Given where sort of your euro exposure stands now in terms of your debt portfolio, are you with where that is, or is there a need to continue to grow that euro exposure over time, either synthetically or through outright issuance in that market?
Sal Mancuso: Yes. Priya, first, I’m going to start my answer by just reiterating, I really have nothing to report. And as it pertains to ABI, we continue to believe holding the asset is in the best interest — long-term interest of our stakeholders. Second, I would tell you that while we have flexibility, it’s really a market-by-market analysis and a transaction-by-transaction analysis related to what markets we may or may not enter as we think about managing our debt going forward. So, that’s kind of how I would answer your question.
Operator: At this time, we will open the Q&A to members of the media. We’ll take our next question from Jennifer Maloney with The Wall Street Journal.
Jennifer Maloney: My first question is about your JUUL valuation. I saw that you lowered the value of your stake to a price that values JUUL at $714 million. I wondered if you could explain the reasoning behind that valuation decrease. I was a little surprised because in the fourth quarter, JUUL resolved a large part of the litigation that it faced, which eliminated some of the uncertainty around the company. So, could you explain that valuation?
Sal Mancuso: Sure. Good morning, Jennifer. First, I’ll remind you that we had taken an impairment related to litigation, and we really captured it within kind of our overall discount rate of the JUUL assets. So, we had accounted for that. But on a quarterly basis, the way we account for JUUL is, has us run an analysis of the fair market value of the investment. It’s not publicly traded, so we have to do an independent analysis. And from quarter-to-quarter, there’s going to be changes, and we’ve been pretty communicative about that. This quarter, it did — our investment was reduced to $100 million and it’s really macro driven, it’s really macroeconomics and other factors that are considered when doing that analysis.
Jennifer Maloney: So, things like inflation and possible recession?
Sal Mancuso: Yes, macro market conditions, inflation, discount rates, things like interest rates, consumer dynamics, all of that goes into the analysis.
Billy Gifford: You’ll note, Jennifer, when you build a discount rate, it starts with a risk-free rate. So certainly, the interest rate increases we’ve seen through time are going to continue to impact it as long as they’re still on an upward trajectory.
Jennifer Maloney: Got it. My second question is a little more color around the consumer purchasing patterns right now. Can you talk a little bit more about what you’re seeing consumers doing? The volume has come down. So, is it because people are making fewer trips to the store to purchase cigarettes, or are they buying less each time? Can you sort of talk about what the actual pattern is?
Billy Gifford: Yes. It’s a great question. What we’re seeing is as we see mobility increase, if you will, the U.S. is coming out of the COVID pandemic, we’re actually seeing a return to more frequent trips. Remember, our consumer pre-COVID would go either every day or every other day. I think what you’re seeing and what consumers tend to do when they get under economic pressure is they reduce their number of nicotine occasions in a day. So through time, that factors into their purchasing behavior. You see a little bit, and we highlighted that, which was the consumers that are under dire economic conditions at times will either switch out or trade out to a cheaper brand. We try to give them a safe landing place within the Marlboro franchise. But as far as a number of trips, we haven’t seen a reduction in the number of trips. It’s more about through time, reducing their nicotine occasions.
Jennifer Maloney: I see. So, they’re smoking fewer cigarettes per day?
Billy Gifford: That’s correct. So remember, as we came into the — there’s no change in the overall trend, if you will, the long-term trend. As we went through COVID and there was less mobility, less societal pressures, we actually saw what we believe nicotine occasions go up. We see in — when the economic conditions and the macroeconomic environment is greatly impacting the consumer, they will strict their nicotine occasions. As they become more comfortable with that they tend to return to a normal trend.
Operator: Thank you. It appears at this time we have no further questions. I’ll turn the call back over to Mac Livingston, for any additional or closing remarks.
Mac Livingston: Thanks to everyone for joining us. Please contact the Investor Relations team if you have further questions. Thanks, and have a great day.
Operator: This concludes today’s call. Thank you for your participation. You may disconnect at any time.
