Altria Group, Inc.

Good day and welcome to the Altria Group 2025 third quarter and nine months earnings conference call. Today's call is scheduled to last about one hour, including remarks by Altria's management and a question and answer session. In order to ask a question, please press star followed by the number one on your touchtone phone at any time. I would now like to turn the call over to Mac Livingston, Vice President of Investor Relations. Please go ahead, sir.

Thanks, Angela. Good morning, and thank you for joining us. This morning, Billy Gifford, Altria's CEO, and Sal Mancuso, our CFO, will discuss Altria's third quarter and first nine months business results. Earlier today, we issued a press release providing our results. The release, presentation, quarterly metrics, and our latest corporate responsibility reports are all available at altria.com. During our call today, unless otherwise stated, we're comparing results to the same period in 2024. Our remarks contain forward-looking statements, including projections of future results. Please review the forward-looking and cautionary statement 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 of Directors. 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 to the most comparable GAAP financial measures 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, Matt. Good morning, and thank you for joining us. Altria continued to build significant momentum in the third quarter with exciting progress across our businesses. For the third quarter, we delivered strong financial performance, growing adjusted diluted earnings per share by 3.6%, and we continued to make meaningful progress across our smoke-free portfolio and toward our long-term adjacency goals. One held steady in a highly competitive environment, and Helix announced plans to launch One Plus, its innovative next-generation oral product. Horizon also made important regulatory followings for a joint venture in heated tobacco products. Looking at our long-term adjacent growth opportunities, we announced a collaboration with KT&G to explore opportunities in international innovative smoke-free products and US non-nicotine products. And importantly, we continue to demonstrate our commitment to returning value to our shareholders. In August, we announced our 60th dividend increase in 56 years. And yesterday, our board authorized an expansion of our share repurchase program. My remarks this morning will focus on results from ON and the launch of ON+, updates on our heated tobacco and evapor portfolio, the state of the regulatory environment, and our strategic relationship with KT&G. I'll then turn it over to Sal, who will provide further details on our business results, 2025 outlook, and our continued commitment to providing significant cash returns to shareholders. Let's begin with on and the nicotine pouch category. Oral nicotine pouches continue to be the primary driver of the estimated 14.5% increase in oral tobacco industry volume over the past six months. In the third quarter, nicotine pouches grew to 55.7 share points, an increase of 11.1 share points year over year. Competitor promotional activity was highly elevated during the third quarter, particularly during September, driving incremental growth for nicotine pouches. We continue to monitor how this elevated promotional activity influences longer-term brand adoption. Despite this competitive landscape, Helix was steady in the third quarter, growing on reported shipment volume to over 42 million cans, representing an increase of nearly 1 percent versus the prior year. For the first nine months, Helix grew on reported shipment volume to over 133 million cans, representing an increase of approximately 15% versus the prior year. While third quarter shipment volumes for ON were influenced by trade inventory dynamics driven by promotional activity in the category, we remain encouraged by the steady consumer demand reflected in our estimated retail takeaway. In fact, Oren's retail share of the total oral tobacco category was 8.7% for the third quarter and first nine months, demonstrating stability for the quarter and an increase of 0.8 share points for the first nine months. Oren's retail price increased by approximately 1.5% in the third quarter versus the prior year. In contrast to the balance of the nicotine pouch category, where average retail prices for the category declined 7% nationally and more than 70% in one major retail chain, a clear reflection of the intense promotional activity during the quarter. Yet, Helix's year-over-year results continue to be a meaningful contributor to the oral tobacco product segment adjusted OCI stability and adjusted OCI margin expansion in the third quarter. KELIX is positioning itself for long-term sustainable success. KELIX recently launched OM Plus in Florida, North Carolina, and Texas. And we are encouraged by the recent actions from the FDA that signal progress toward a more efficient and transparent authorization process for nicotine pouches, which I'll discuss later in my remarks. OrnPlus launched with three flavors and three nicotine strengths, which we believe are complementary to the current Orn portfolio. We believe OrnPlus is a premium and differentiated product that we expect to appeal to both adults who dip and competitive nicotine pouch consumers. OrnPlus uniquely delivers on three desirable attributes for pouch consumers. comfort, nicotine delivery, and flavor satisfaction. In recent research, we compared Orem Plus Mint against several leading competitive brands. While a small sample size, Orem Plus outperformed all competitive brands in the sample. Orem Plus achieved the highest purchase intent score driven by the comfort of the pouch. In addition, innovation and consumer preferences remain at the forefront of Helix's strategy. Helix continues to build a pipeline of new OnePlus flavors and looks forward to bringing them to the U.S. market. In heated tobacco, Horizon completed a key milestone on its path to bring Plume to the U.S. In August, Horizon filed a combined PMTA and MRTPA with the FDA for plume and Marlboro heated tobacco sticks. We believe the science and evidence supporting Horizon's applications are compelling and present a strong case for FDA authorizations. Our teams are working diligently on plumes go-to-market plans, and we look forward to engaging smokers with this innovative product. Moving to our eVapor business and ENJOY. We believe we have completed the product design of a modified ENJOY ACE solution that addresses all four disputed patents. Our teams are evaluating the potential pathways to bring the modified ACE product to market. During the third quarter, both ENJOY and JUUL initiated new litigation against one another. JUUL initiated litigation in federal court and before the ITC against Enjoy asserting claims of patent infringement based on sales of Enjoy daily and on any other products Enjoy may be developing that would infringe JUUL's patents. We do not expect a final determination from the ITC before early 2027. and intend to vigorously defend our positions in this litigation. In addition, ENJOY initiated litigation against Juul in federal court and before the ITC, asserting claims of patent infringement based on the sale of certain Juul products. As we assess our path forward with ACE and work diligently on our innovative product pipeline in eVapor, the market remains saturated with flavored disposable evapor products, the majority of which we believe have evaded the regulatory process. At the end of the third quarter, we estimate the evapor category included approximately 21 million vapors, up nearly 2 million versus a year ago. During the same period, disposable vapors increased by an estimated 2.4 million to nearly 15 million. We believe that flavored disposable e-vapor products continue to represent over 60% of the category. This remains a significant issue, but we are encouraged by the recent enforcement actions and constructive regulatory dialogue that signal progress. For some time, we have advocated for stronger enforcement against holistic products as well as for an acceleration in FDA market authorizations for smoke-free products. During the third quarter, we observed notable enforcement efforts targeting illicit products and welcomed positive plans from the FDA regarding the pace of authorizations within the oral nicotine pouch category. On the enforcement front, we continued to see elevated engagement and action from federal agencies and government officials. These actions included coordinated raids executed by the Federal Multi-Agency Task Force across the U.S., resulting in the seizure of hundreds of thousands of illicit vapor products from retailers and wholesalers and the potential for further legal action. Ongoing seizures of illicit products, including seizure by HHS and U.S. Customs and Border Protection of more than 4 million units of illicit vapor products with an estimated retail value over $86 million, the largest seizure of this kind. And a targeted nationwide operation led by the Drug Enforcement Administration, focused on illicit activity at vape shops. These federal actions alongside efforts at the state and local level are signs of progress. However, we believe sustained and coordinated enforcement is necessary to materially impact the state of the market. We remain steadfast in our commitment to supporting a well functioning regulatory system. It is critical to unlock the full potential of tobacco harm reduction. These ongoing enforcement efforts are essential to provide adult consumers with access to regulated products that are supported by science and are aligned with public health goals. Beyond enforcement, We have been advocating for the FDA to accelerate product authorizations and establish a responsible marketplace for smoke-free products. Regulatory speed and clarity are also essential to delivering innovative options that meet adult consumer preferences and advance harm reduction. In September, the FDA launched a pilot program to streamline PMTA reviews for oral nicotine pouches, and Helix was notified by the FDA that applications for OrmPlus are included in the program. We're encouraged by this development from the FDA, and we're actively engaging with the FDA on these product applications. While the pilot only applies to certain nicotine pouches, we hope it signals broader FDA efforts to increase the speed of regulatory decisions across all smoke-free platforms. As we pursue the smoke-free opportunity within the U.S., we remain committed to our long-term adjacent growth goals. In September, we took another step forward when we announced a new collaboration with KT&G. First, we are jointly exploring opportunities to grow global demand for nicotine pouch products, including the potential expansion of the ORN portfolio into select international markets. As part of our initial steps in International Modern Oral, we entered into an agreement with KT&G to acquire an ownership interest in another snooze factory, the manufacturer of the Loop nicotine pouch brand. Loop is currently available in a range of strengths with unique flavors. Our research shows that complex flavors are driving growth for modern oral in international markets, and we are pleased to add our investment in ASF to complement our portfolio of ON, ON+, and FUMI to effectively compete across all modern oral product segments. Second, our collaboration includes the exploration of opportunities in U.S. , specifically in the energy and wellness space with KT&G's Korea Ginseng Corporation, leveraging their product expertise and our commercial capabilities. In addition, as part of our relationship with KT&G, we're exploring ways to improve operational efficiency in traditional tobacco with the potential benefits for both companies in our respective home regions. We believe this collaboration further supports our enterprise goals and may strengthen our capabilities relevant to international nicotine products. We're excited about our new relationship with KT&G and look forward to providing updates on our joint efforts. In summary, Altria continued to build momentum in the third quarter. Our core tobacco businesses remained resilient. We advanced their smoke-free portfolio, and we opened new pathways for long-term adjacent growth in international modern oil and U.S. non-nicotine innovation. These efforts support the commitment to our vision and enterprise goals. I'm confident in our strategy, energized by the opportunities ahead, and thankful for our team's continued dedication to delivering long-term shareholder value. I'll now turn it over to Sal to provide more detail on the business environment and our results.

Thanks, Billy. Altria delivered strong third quarter and first nine months financial performance. Adjusted diluted earnings per share increased 3.6% in the third quarter and by 5.9% for the first nine months. In the smokable product segment, adjusted operating company's income grew by 0.7% to nearly $3 billion in the third quarter and by 2.5% to $8.4 billion for the first nine months. Adjusted OCI margins expanded to 64.4% for the third quarter and first nine months, representing impressive margin growth of 1.3 percentage points and 2.7 percentage points, respectively. Smokable products segment reported domestic cigarette volumes declined by 8.2% in the third quarter and 10.6% for the first nine months. When adjusted for trade inventory movements and calendar differences, the segment's domestic cigarette volumes for the third quarter declined by an estimated 9%. slightly above the estimated 8% volume declines at the industry level. For the first nine months, when adjusted for calendar differences and trade inventory movements, the segment's domestic cigarette volumes declined by an estimated 10.5% and by 8.5% at the industry level. PMUSA continues to execute on its strategy of maximizing profitability over the long term. While maintaining its focus on Marlboro and the premium segment, PMUSA recognizes the opportunity to compete within the discount segment, guided by data-driven strategies. Within the highly profitable premium segment, Marlboro maintained its longstanding leadership in the category. In the third quarter, Marlboro expanded its share of the premium segment by three-tenths to 59.6% versus the prior year and by one-tenth sequentially. At the same time, PMUSA continued to strategically invest behind BASIC appealing to a price-sensitive cohort of adult smokers within the discount segment. Many adult smokers continue to face discretionary spending pressures resulting from a variety of macroeconomic headwinds, including the compounding effects of inflation. Leveraging PMUSA's data analytics and robust RGM tools Basic grew 0.9 share points sequentially and 1.4 share points year-over-year for the third quarter. The discount segment of the industry expanded by 2.4 share points year-over-year, with Basic capturing over half of that growth. Importantly, Our data show that most of basic share gains came from adult smokers already within the discount segment, with limited impact on Marlboro. As a result of the combined efforts across the PMUSA portfolio of brands, cigarette retail share increased sequentially for the second consecutive quarter to 45.4%. growing 0.3 share points in the third quarter. Cigars also continued to be a meaningful contributor to our smokable products segment results. For the third quarter and the nine months, Middleton reported shipment volume increased 2% and 1.1%, respectively, as Middleton outperformed in the large mass cigar industry. Let's turn now to the oral tobacco product segment. In the third quarter, adjusted OCI declined by less than 1%. Over the same period, the segment saw improved profitability through impressive adjusted OCI margin expansion of 2.4 percentage points to 69.2%. For the first nine months, adjusted OCI increased by 3.3%, with adjusted OCI margin expansion of 1.8 percentage points to 69%. GILX's year-over-year performance was a meaningful contributor to the stability of adjusted OCI in the third quarter and to the adjusted OCI growth for the first nine months. Total segment reported shipment volume decreased 9.6% for the third quarter and 5.2% for the first nine months, as growth in ON was more than offset by lower MST volumes. When adjusted for calendar differences and trade inventory movements, We estimate that third quarter and first nine months, oral tobacco product segment volumes declined by an estimated 5.5% and 3.5% respectively. Oral tobacco product segment retail share was 31.1% for the third quarter and 32.9% for the first nine months. In the highly profitable moist smokeless tobacco segment, Copenhagen continued to maintain its longstanding premium leadership. Turning to ABI's financial results, we recorded $157 million of adjusted equity earnings in the third quarter, up 9% versus the prior year. As Billy mentioned, Our businesses performed well in a dynamic environment during the first nine months of the year, and we effectively maintained the strength of our core tobacco businesses while investing toward our vision. As a result, we raised the lower end of our 2025 guidance range. We now expect to deliver adjusted diluted EPS in a range of $5.37 to $5.45, representing a growth rate of 3.5% to 5% from a base of $5.19 in 2024. We expect EPS growth to moderate in the fourth quarter, as we lap the lower share count associated with the 2024 Accelerated Share Repurchase Program and the benefit of the MSA Legal Fund expiration. We are also mindful of the challenged state of tobacco consumers and will continue to closely monitor their purchasing behaviors. Our strong financial performance for the first nine months enabled us to return nearly $6 billion to our shareholders, including $5.2 billion in dividends and $712 million in share repurchases. We remain committed to providing significant cash returns to our shareholders, as demonstrated by our recent dividend increase and share repurchase announcement. In August, our Board increased our regular quarterly dividend by 3.9% to $1.06 per share, marking our 60th dividend increase in 56 years. This milestone underscores our legacy of delivering consistent shareholder value and highlights the resilience of our businesses through decades of change. And today, we announced that our board authorized the expansion of our existing share repurchase program from $1 billion to $2 billion, which now expires on December 31, 2026. Lastly, our balance sheet remains strong Our debt-to-EBITDA ratio as of September 30th was two times, in line with our target of approximately two times. 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. Operator, let's open the question and answer period.

Thank you. Once again, as a reminder, if you would like to ask a question, please press the star key followed by the number one on your touchtone 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 Matt Smith with Stifel. Please go ahead.

Good morning, Billy and Sally. Thank you for taking my question. Sal, you raised the low end of the guidance again, which is nice to see here, but the fourth quarter implies a deceleration in the earnings growth. You called out lapping the share repurchase and the MSA legal fee expiration. Are there any other key puts and takes as we think about the fourth quarter and, more importantly, the path to growing smokable OCI again?

Thank you. thank you matt um no as you as you mentioned that we did talk about the share repurchase and msa legal funnel i'll also say we continue to monitor consumer spending that the marketplace remains dynamic um so i would i would really focus on that but we feel really good about the ability to narrow guidance by raising the bottom we're very pleased with the first nine month financial performance And then smokable profitability, again, we feel really good about PMUSA's performance, their ability to expand margins for Marlboro to remain strong within the premium segment. So we feel really good about the smokable business and, you know, happy to be able to provide the guidance.

Thank you. And as a follow-up, you called out the underlying cigarette industry rate of decline moderating on a sequential basis. Billy, I know you provide the 12-month bridge that shows the macroeconomic factor, but sometimes that 12-month bridge can not move as much on a quarter-to-quarter basis. So when we think about the moderation that we saw sequentially, can you talk about the drivers that you think are leading to that? Thank you. Pass it on after that.

Yeah, thanks for the question, Matt. I think when you step back and look at it, you're right that 12 months doesn't move quite as quickly. I think what you're seeing in the marketplace, and look, are consumers still under pressure? Again, they don't need improvement. They just need consistency. And we've seen a bit of consistency around gas prices, inflation, things of that nature, and we'll see how that continues through the year. And I think we're starting to see some of the, and I talked about it in my remarks, some of the stepped-up enforcement in eVapor. It puts consumers back at play. We would love to be able to keep them in the smokeless category, but when enforcement happens, it certainly puts them at play and they consider other nicotine categories.

we'll take our next question from bonnie herzog with goldman sachs please go ahead all right thank you good morning um i guess i have a question first on the nicotine pouch category you know the competitive environment has really intensified so could you touch on what you're seeing and whether i guess you've been happy with the performance and positioning of on considering the moderating growth And then could you talk about, you know, some of your initiatives that you're, you know, implementing, I guess, to maybe turn the performance around? I guess I'm kind of wondering, do you feel that you need to step up promotional spend? And then finally, could you maybe share early feedback on the rollout of OnPlus? And I guess assuming it's positive, you know, should we assume you'll roll out that brand nationally?

Yeah, thanks for the question, Bonnie. You're right. The competitive environment significantly stepped up. I mean, we tried to dimensionalize it. You know, ON was moving up, call it 1.5% at retail from a price perspective, while the entire category was down 7% on a national basis, but as much as 70% in a major retail. So it was a significant shift in promotional spending by competitors. We had that early on in the marketplace when we launched, and we talked about how we're bringing the revenue growth management tools over to the category. So we're extremely pleased with the performance where we were moving up in retail price and the category was moving down significantly. I know people get hung up on some of the shipment volume. I think the encouraging aspect that we see is on the retail takeaway volume. And when you look at that, that's the true demand by the consumer, and that was steady even in that highly competitive environment. Much too early on OM Plus to really mention, we are certainly excited about the differentiation that product has in research, and we're excited to be able to bring that to market and expand it when it's appropriate.

All right. Thanks for that. And then I just wanted to also ask about your KT&G partnership. You know, it was recently expanded and you touched on this, but just hoping for a little more color on the operational efficiencies you see, especially as it relates to, you know, opportunities to maybe take advantage of the double duty drawback. Also, could you give us a little more color on you know, I guess opportunities for alternative revenue streams as well as, you know, further expansion internationally given this partnership. Thank you.

Yeah, thanks, Bonnie. And you touched on two of the three. We really see it as three-pronged. Certainly the modern oral initiative, being able to expand on and on plus in international markets is something that we'll be exploring. Rounding out our portfolio with the inclusion of Loop into that. So we feel like that completes the portfolio, and we look forward to continuing discussions with them on how to think about expanding internationally into other markets. The second point is certainly the non-nicotine opportunities, and I tried to highlight a little bit where we would explore working with them. They have certainly the product expertise in the Korean red ginseng, and we would look to work with them based on our commercial distribution strength in the U.S., of what are the opportunities there, and certainly we'll share more when it's appropriate. And the third was the operational efficiencies. And what we saw there was it was the ability to adapt our manufacturing center for cigarettes For items that are specific to international markets, whether that be pack size or trace and tracking and things of that nature, it certainly, to your point, allows us to take advantage of duty drawback. That's a benefit of it. But it also opens up the door for us to think about international opportunities in the future.

All right. Thank you. I'll pass it on.

Thanks.

And as a reminder, it is star 1 if you'd like to ask a question. We'll go next to Eric Sirota with Morgan Stanley. Please go ahead.

Thanks guys. Good morning. Um, Billy is starting on, on plus, uh, realize that the very early days, um, but you did mention it, uh, as premium positioning. Could you talk a bit about the price point as you launch in, uh, the three States where you did a realizing only matter of weeks or less, but how are you thinking about the relative price point of on plus relative to on and relative to competitors, which I realize are a moving target at the moment. Then sal controllable costs and smokables were up pretty significantly year on year. I realize they were down in a year ago, so there was perhaps a comparison issue. But how are you thinking about controllable costs going forward? Was there any additional color you could talk about in the quarter? And, you know, the smokable OCI growth was relatively muted at less than 1%. You know, was that really the controllable costs? Or are there other factors that you'd point to that, you know, constrain the OCI growth in the quarter? Thank you.

Yeah, thanks, Eric. And so I'll kick this off and then Sal can follow up with a question for him. I think when you think about 1+, we certainly see that as a premium price product because of the differentiation and the satisfaction we think it brings in the experience to the consumer. In our research, the consumers choose that as the top product from a total experience standpoint, and we think it can demand a premium price at retail. Certainly in any introduction, you have introductory price promotions. We know as soon as we get it in consumers' hands, they experience that differentiation that I'm trying to highlight to you. And so we'll certainly have introductory price promotions as we look to expand when appropriate.

Good morning, Eric. And as far as controllable costs go, I guess I'd start by saying that I would not look at controllable costs quarter by quarter. I really believe you need to look at the costs over the long term exactly for the reasons you highlighted in the question. There are some comparison issues. costs are not linear. There's timing within a quarter. So you touched on that in the question. I think you were right to point that out. As far as controllable costs going forward, I'm going to be careful not to kind of lean into future guidance and things like that. But I would tell you how we think about costs. Obviously, in a declining category like smokable and cigarettes in particular, cost management is an important part of the growth algorithm along with pricing. We do manage our overall cost. Obviously, we've shared with you the Optimize and Accelerate program. That program is not just about effective cost management and cost reductions. It's also about better performance and speed to market. And we are taking those cost savings and reinvesting that in our future. I'll also share that, you know, we spend a lot of time continuing to hone our data analytics and our revenue growth management tools, and that has been extremely helpful. And while it manifests itself as price realization in the P&L, I look at that as productivity because we are better able to to use promotional investments to support our brands and pmusa and our data analytics team continue to do a terrific job of using data analytics and those rgm tools extremely effectively so we're very happy about that and then you know oci for smokable i really would look at that over a longer term again not a particular quarter. Smokable is up 2.5% on a year-to-date basis. Very pleased with its performance, especially when you see the strength of Marlboro within the premium segment.

Great. Thanks so much. I'll pass it on. Sure.

We'll go next to Faham Beg with UBS. Please go ahead.

Thanks, guys. Good morning, everyone. A couple from me as well. Firstly, if I could come back on the duty drawbacks. If we take a bigger look at the picture, Altria is likely to make around $3 billion in federal excise tax payments this year. Should this be the amount that we think about the potential benefit from the duty drawbacks? And is this likely to be the sort of key engine that drives group EPS growth to high single digits over the next couple of years to meet the mid-single digit EPS CAGR to 2028? So, that's the first question. There's a second one, going back to the pilot program that the FDA is running. Could this impact your decision to go ahead with the national launch on Plus, i.e., you may wait for the decision on this or you may take a decision irrespective of the program? And the second one on that is, why do you think it's possible for the FDA to accelerate this process on nicotine pouches, but it's not possible to do so in vapor, which is arguably a much larger category, and reviews there began much earlier?

Yeah, so quite a few things in that question, so if I don't touch on one, please follow up. I think when you think about the duty drawback, I wouldn't jump to a conclusion at this point in time. It's really about a relationship with international players. How do we think about producing cigarettes for international and some of the other benefits that we get? Certainly drawback is an additional benefit to that. When you think about the pilot program, I want to be clear that we want a functioning regulatory system. So we're going to always make our decisions based on what's the long-term best interest of the company with an eye towards what is best to get a functioning regulatory system. I think your question related to pouches versus vapor, I think from comments from them, but just the interpretation of it being called a pilot program, they wanted to start where it made sense to start, and that's in nicotine pouches, a fairly set category, even though we've seen some players maybe enter the marketplace illicitly. it gives them a way to think about thinking about the category in total and then differentiated products and what's different between individual products in the marketplace which should speed up their review of that I think when you think about vapors you know the marketplace is a mess right now and so I think the nature of a pilot program is to learn and They will learn. Manufacturers, including us, will learn. It's been a very collaborative process with constant engagement through the application review process, which is very different and very encouraging from the FDA we experienced under the previous administration. So I think once you have those learnings, we would hope and encourage the FDA to expand it to other categories.

I guess just a quick follow-up. Could you clarify that? the EPS growth is suggested to accelerate to high single digits over the next couple of years in order to meet your mid-single-digit EPS CAGR. Is that still the ambition?

Our ambition is the goal. We haven't changed our goals from an overall CAGR that we stated previously, and that's been our stated goal. So, yeah, that's the way I would think about how we're going to manage the business going forward.

Brilliant. Thank you.

There appears to be no further questions at this time. I would now like to turn the call back over to Mac Livingston for any closing remarks.

Thanks, everybody, for joining us today, and have a great day.

This concludes today's call. Thank you for your participation. You may disconnect at any time.