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Lenox Hill Hospital 100 -Llif 77... 51•Kf Ntw -x• Nav. " 1Q('i2/ November 3, 1978 t,r Dr. Nilliam U. Gardner Scientific Director Council for Tobacco 8siearch 110 East 59th Street Nev York, N.Y. 10022 Dear Bill: SF0800031 I have been thiakin= about the recent activities of couasel, C'PB, over the nast tan days. If antitrust lav caanot be ezolained to sK tben I camnot understand it, a typical Catch 22 situation. In regard to the iuza appl4cation there is no possible relevance to antitrust that I can sae. Sencs advice of couaael is out of bounda, and sisply adds another level.of authority on relevance. I think GTR should be renamed Council for Legally Yer- ffitted Tobacco Research, CLIPT for short. When fay personal counsel sives advice that I cannot follow it is ignored. My advice as SAb Chairnan is that on the Fuxa applica- tion the counsel is in error, and usual considerations should Qovern. Remember when condensate fract.ton research vas proscribed, we lost Dr. Craiebead. My considered opinion is that the time for as to sever connectioas with CTR is near. I would be pleased to tell Mr. Joseph Cullman the problesu if be is interested. With all othera involved w have bad aore than complete discussions. Best wishes. Sheldon C. Sotaars, M.D. Director of Laboratories SCS:cm cc: Mr. Addison Yeaaan J ~.r t f"`.. i i~ j ti..~* -'T ~~ .~ L.• ~

Confidential - Subject to Minnesota Protective Order and Addendum \ Category I STATE OF MINNESOTA AND BLUE CROSS AND BLUE SHIELD VS. PHILIP MORRIS INCORPORATED, ET AL AMMENDED EXPERT ANALYSIS OF ADVERTISING, R&D AND YOUTH PREVENTION EXPENSE BY PAUL J. MUCH JULY 1997 HOULIHAN LOKEY HOWARD & ZUKIN A SPECIALTY INVESTM ENT BANKING FIRM Chicago Los Angeles New York San Francisco Minneapolis Washington D.C. loronto Dallas Atlanta

Confidential - Subject to Minnesota Protective Order and Addendum \ Category I The attached bound volume constitutes the expert report of Paul J. Much. This report and Mr. Much's opinions and testimony will be based on his academic training and experience and his ongoing review of publicly available corporate financial data and internal tobacco industry documents and discovery. A listing of the documents relied upon by Mr. Much is attached. Defendants have yet to fully answer discovery upon which portions of this report are based. Mr. Much may review additional documents and discovery produced or to be produced by defendants and may rely on other experts in this case. Mr. Much reserves the right to supplement and revise this report, in accordance with the court's orders of March 13, 1997, and May 16, 1997. ~ ~ Senior Managing Director 7-;~- r'7

Confidential - Subject to Minnesota Protective Order and Addendum \ Category 1 Table of Contents Tab Philip Morris & R.J. Reynolds 1 Statistical Analysis Philip Morris Charts R.J. Reynolds Charts Brown & Williamson and American Tobacco A B C 2 Statistical Analysis Brown & Williamson Charts American Tobacco Charts Liggett and Lorillard A B C 3 Statistical Analysis Liggett Charts Lorillard Charts Footnotes A B C 4

CTR HN 043290

CTR NN 043291

ADVERTISING, R&D AND YOUTH PREVENTION (S Actual) I 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 Philip Morris Rneuch & Development Expeaditum (a) $2.483.259 $2,943,747 $3,180,591 Ceat.l..Nee+ to CTR Coaolarion: to Graenl Food (b) 5147,450 580,000 $98,750 $112,500 591,305 $75,372 592,968 $109,250 f115250 $139,531 $150,000 Coombutionz to Special Projects (b) 0 0 0 0 0 0 0 0 0 0 0 Toul Coatnb.tlo.u to C7R $147 450 S80 000 S98 750 5112 500 S91 105 $75,372 $92 968 5109 250 5115 250 SU9 531 5150 000 Rewreh & Developmeet Eapenditurn aad Coalribntbu to CTR 5147,450 580,000 598,750 5112,500 $91,305 $75,372 $92,969 $109,250 $2.598.309 53,083,278 $3,3)0,591 Adverti.l.g. Martett.g & Promotioa Expeaditum (c) peRditnrro Youth P.ermtinn F± , Youth Prerention Expenditures (d) Yoath Prevrntion Expenditures Wough TI (e) 0 0 0 0 0 0 0 0 0 0 0 Total Youth Prrveetioa Expeaditum R.J. Reynolds Rnear[Y & Developme.t Eape.dlt.rn (t) CwatAal.... te CTR Contobutions to ceneril Fund (b) Cootributions to Special Projeets (b) Total Coatribotiou to CTR Reuar(b & De.elopmeat Expeedieorn aad Coatr>'b.t(oas to CfR Advert4ia8, Marluting & Pronotba Expeaditum u Stated Ia Answer to Interrogatory No. 21. (g) Eetimated Advertteieg, Marketing & Proawtloo Expeeditarn Reported to FTC (b) YnrL Preveattwe R.neadtrure. Yowb Ptevmtion Expeoditurex (i) Youth Preveotion Expendiuues through TI (e) Total Youth Preveatlo. Eapeedll.rn 'i go -- $387,000 $236,000 5310,938 $339.750 $28.,571 5234,748 s306,250 3396,250 S4t7,500 5514,000 5546,876 0 0 0 0 0 0 0 0 0 0 0 5387,000 5236,000 $310,938 $338,750 5284,57t $234,748 $306,250 5386,250 5417,500 $514,000 5546,876 5387,000 5236,000 5310,938 $338,750 1284,571 $234.748 5306,250 5386,250 5417,500 $514,000 5546,876 529,079,690 530,459,0M 539,403,534 541,216,816 $43,569,031 $50,316.407 553,141,763 557,296,984 $60r0 6,874 559,860,879 570,874,729 529,079,690 530,459,044 $39,403,534 $41,216,816 $43,569,031 $50,316,407 $53.141,763 557,296,984 $60, 206,874 559,860,879 $70,874,729 0 0 0 0 0 0 0 0 0 0 0 07q7/97 CONFIDENTIAL-SUBIECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM 3 CATEGORY I

ADVERTISING, R&D AND YOUTH PREVENTION (S Actual) Philip Morris 19651 19661 19671 19681 1969 19701 19711 19721 19731 19741-- 1975 Reuareh & Devebpmeae Erpeedleura (a) 53,612,807 53,921,318 $4.679,382 $5,361,677 55,986,753 $6,978,913 58,653,668 $10,418,624 511,796 ,991 515,084,2.14 517,156,613 Cn.tiA.lie.s tn CtR Coaubutions to General Fund (b) $180,000 5198,750 $217,500 5288,750 5515,625 5481,125 $712,160 1648,333 5837,692 51,140,755 SIa73,110 Coo6n'butions to Special Projects (b) 0 21,200 22,200 39,600 15,000 30.800 53,400 61,200 41,193 76,652 63,022 Tota) Ce.trRut{ou to CTR 5180,000 _ __ 5219,950 _ __ _ _ $239,700 _ _ 5328 350 . _ _ 5530,625 5511 925 _ 5765,560 _ $709 533 _ _ 5878,885 SI 217 407 SI 436 3, 32 ReseareY & Devebptne.e Eapeedituret and Coatrib.tfo.. to CTR 53,792,807 $4,141,268 54,919,082 $5,6'J0,027 56,517,378 $7,490,838 59,419,228 $11,128,157 512,675,876 516,301,651 518,592,945 Adverthie8, Marketin8 & Promotioe E.pendit.rea (c) 549,525,967 $58.104,621 560,264,038 562,733,980 So1,1J6,929 573,026,503 $I11,069,995 Youth Preve.ti... ..pcwdYur Yooth Preventioe Exprndituref (d) Youth Preven0oa Eapeaditures throu8h T1(e) 0 0 0 0 0 0 0 0 0 0 0 Total Youth Preveatio. Eape.diteres R.J. Reynolds Raeard & Development Eape.dit.re, (Q Ce.ri1..LM- Iw CTR Coetu3rtioos a Oeru;ral Fund (b) Comributions to Special Projects (b) Total Co.tribrtlo.s to CTR Rasarai & Devebpmeet Eapenditures aed Co.trib.tbu to CTR AdvertW.B, Marketin8 & Prometioa Eapendit.ra e. Stated 1. A..wer to Isterro8atory No. 21. (8) E.810ated AdverWieB, MarkNi.B & Promotba Eap..dYerse Repurted (o FTC (b) Ywr.. Prevealw. r....wdu.... YouA Preventio.. E:peedituref (i) Youth Nersuoe Ecpeadiores duou8h TI (e) Total Yo.th P.eveatle. Eape.dhrrn 115 000 000 , , $618,752 $633,752 5637,500 5743,752 51,155.000 51,025,000 $1,372,462 $1.100.405 $1,335,334 $1,562,6 98 51,967,995 0 5618 752 67,600 $701 352 67,800 $705 300 102,000 $845 752 33,600 $1188600 65,600 $1090600 101,400 SI477862 104,400 $1 204805 64,386 $1 399 722 110,677 51 7 7 87,913 ' , , , , , , , ,6 3,3 5 ,055,908 S_ 5618,752 S701,352 $703.300 $845,752 51,188,600 SI,090,600 $1.473.862 SIr04,805 116,399,722 51,673,3 75 52,055,908 $67,367,680 $73.520.251 $78,672,816 $79,015,550 $79.226.236 589,635,729 162,y22,220 572,790,761 573 ,854,317 $95,4:7,5N 5121,419,4C4 567,367,680 573,520,251 578,672,816 $79.01 5,S50 579,226,236 $89,635,729 562,522,220 572,790,767 573,884,317 $95,427,SM SI30,132,BSV 0 0 0 0 0 0 0 0 0 0 0 07/02/97 CONFIDENTIAL • SUBIF.CT TO MINNESOTA PRO7ECTIVE O1(DER AND ADDIiNDUM \('ATEGORY 1

ADVERTISING, R&D AND YOUTH PREVENTION (S Actual) ph111pM4II1Y Roearcl & S><.ebpmeat Eapeaditaree (a) frtJ.aln.. to CTR Coan'butions to Csennal Fund (b) C6em'b9tions to Special Projects (b) T6ul Coatrib.tiou to CCR Roewrcl & De.etopmeat Expenditures ead C6atriDaioae to CfR AdvertlsLp BtarYetlaB & Promotba Eapeaditares (c) Yo. I. Prere. In. -. ctarn Youwb Preveafion Expenditures (d) YootL Prerestioo E.penditurestbro98b TI(e) Tolel Yo.tl Prwe.tba E.peadll.rer R.J. Revnolds Rerearch & Devebpeuat Ecpendlt.rer. (f) Cnau.t6.. r jIg Coatibutionr blieoael Fond (b) CoMribWioro oo Special Projeet. (b) Total Co.lrWrtloar to CTR Rneant. & Devolopmeat Eape.dkora ead Coavlb.tle.r to CTR Adverti.iop MarYellq & lrormtba Eapeadkarer ar Stned Ia A.ewer to Ioterroptory No. 21. (8) Estimated AdvertBlaB, M.rketla8 & trnmotb. Eapeadit.ra Reported to FTC (b) Ya.tb Prevea Lr F.ne.dit.ree Yowh Prevoeon Expmdiova (i) Yoatb Prermtioa Expenditures through T1(c) Total Yoatb fre.eatba E=pe.dkoree [ 1976 -1977 1978[ _ 1979[~ - -19801 19811- 1982 1983 19941 1985 19-9-61 f20,674,798 $1,737,960 89,%7 $27,276,N82 $1.902.922 188,190 $29,391,501 $1,830,439 190,677 $34,477,606 $1,992,659 245,903 516,8LI,N2N 52,126,879 310,574 f45,738,312 $2.238,943 300,025 $SJ,54N,792 52,657,230 440,644 $57.419,876 53,008,258 347.794 S60,120174 53,909,019 317,774 563,889,16-1 $4,390,133 379.082 $73.711.797 55,308,278 839,902 SI,827,927 52,091,112 52,021,115 $2,238,562 52,437,453 52,538,868 $3,097,874 53,356,052 54,226,793 f4,769,215 56,148,180 f22,502,725 SI64,689,339 0 529,367,994 $164.026,498 0 511,412,616 5226,662,781 0 $36,716,168 5249,825,725 0 S39a11,281 SJ32,049,120 0 $48,277,180 $394,910,811 0 556,646,666 5467,940,119 0 560,775,928 $502,760,151 24,444 $64,547,167 $546,304,954 561,497 568,658,378 5695,628,132 789,678 S84,859,977 5738,037,891 353,439 -• - •• -- •• -- •• $24,444 5561497 5789,678 $353,439 $21.336.000 $24.134.000 f36,499,000 538,874,000 546,269,000 555,034,000 568,809,000 52,401,861 f2,204,142 52,45t,852 $2,262,025 $2,415,625 $2,328,985 $2,695,691 Sl,736,628 $3.503.884 5 3,84t,3V3 54,705,793 I22,569 _244,536 216_tl52 _ 2'IOp28 117,160 459,054 354,715 _ 291,193 -- 140,V22_ 741,8-W __ 12,524,430 52,448,678 _ f2,688,704 $2„552,63J 12,765,953 _ _12,646,IJ3 {.1,591,34) I,7V3,077 ~-f4,8vt115 53,447,623 $2.524.430 52,448,678 52,688,704 $2.552.653 524,101,955 526,7N0,U5 $39,633,745 f42,465,J43 S.w,064,0 77 A9.223,3t5 $74,25wo23 5149,021,007 5192,685,525 S2I4,385,981 $298,435,251 $363.761,764 f433,172,002 5530,116,117 5588,184, 168 $612,613,628 $603.973.000 5600,440,000 5178,154,911 5274,096,902 5272,157,950 $333,753,395 f407,131,883 5517,372,525 5663,720,590 $683,262, 478 $965.584.811 $1.030.051.262 51,014,720,146 0 0 0 0 0 0 0 26,583 518,255 707,754 319,153 $26,583 5518,255 5707,754 5319,IS3 07/02197 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECf I V E ORDER AND ADDENDUM \ CATEGORY I

ADVERTISING, R&D AND YOUTH PREVENTION (S Actua)) Philip Morris I 1987 1988 1989 1990 1991 1992 1993 1994 1954-9 Ruearch & Derebpmeat Eape.dit.re. (a) S80a34,564 $56,064,368 S57,633,513 S53,951,610 S61,072,778 $61.450.896 $72,890,963 589,253,153 5 1,143,213,361 to LTR Coe6buu6ns to Geeeal Fand (b) $5,754,937 56,752,365 57,245,257 58,162,873 $9,307,060 $10,945,500 $11,070,876 S11,196,1% SI09,3 44,059 Cmmbucortf to Special Projects (b) 641,763 517.770 428,618 174,973 0 0 0 0 5,937,923 Total C4+trm.tlos to CTR 56,3% 700 S7,270,135 S7,673,875 $8,337 846 S9 307 060 $10,945,500 $11,070,876 $I 1 1% 1% S 1 I S 181 981 Reaeard & Derebpmetl Etpeedlt.rra and Cu.triD.tbaa to CTR 586,131.264 563,334,501 565.307,388 $62,289,456 570,379,838 $72,3%,3% 583,%1,8J9 $100,449,349 51,258,415,342 Adrertitie8, Marketi.8 & Proawtio. Eapeadit.rv (c) 5857,058,060 S1,1J9,610,449 $1,290,880,892 $1,540,812,544 $1,687,684,672 $1,825,558,753 $2,847,3 82,978 $2,242,617,367 S18,J90,J1J,271 Youth Prcreetbw F. dp,~ltrrr Youth Preveutioe Eapenditures (d) • - -• 514,000,000 514,000,000 Youth Prcvention Eapeadi6rten duou8h TI (e) 7,9_2J 186,657 157 i 22 2 _51J,606 1,850729 y4J5,676 891,801 29,869 6,818,740 Total Youth Pre.ntb. Etpeedtt.rea _ _ _ 729fl45676 f21923 SSIJ606 SI,SS 0 5186,657 5157,Q2 ftl918, 01 _ $14029869 69 $ 20_,JIb 7•10 _._____ _ __ ._____. __ ._ ___._ ________ _ RJ. Reynolds RewrcY 6 Derebpme.t Eape.dNrres (0 Cee tt..t th.. te CTR Conubr6oes to CCeneral Fued (b) Contnbutions to Special Projects (b) Total Ca.trib.tbes to CTR Researcb & Derebpme.t Eapeedlt.rn a.d Ce.trib.tbu to CTR ' Ad.ertW.B. Marketie8?a Proreetb. Espe.dltarrn au Stated 1. Aeswer to l.terrvptery No. 21. (8) Est(mated Adrerthl.4 Marketi.8 & PromoUe. Eape.ditara Reperted to FTC (it) Ye. i7..PeneadNrrre Youth Prere.tios E:perdieves (I) YaA Prewtio. Expeedi6ses dvoa8h TI (e) Total Youth Preve.tlo. Eape.dit.res $69,610,000 192,697,000 5105,125,000 $115.619.000 $105.291.000 SI03,211,000 591,915,000 55,112,586 25,954,450 $5,588,403 $5,672,304 S6a68,672 $7,016,192. 57,933,688 556,067 445,017 346.922 126,083 0 0 0 $5,668,653 16,399,467 $5,935,325 55,798,387 56,368,672 57,016,192 $7,933,688 $75.278.653 599,0%,467 5111,060,325 1121,417,387 5111,639,672 SI10,227,192 199,848,688 5469,964,000 $436.853,000 1527,019,000 $573,241,000 14%,898,000 $462,034,1100 1435,540,000 $982,594.217 $1,151,648,213 S1,2I7,875,4I1 $1,398,850,320 51,721,184,872 $1,952,607,072 SI,631,176, 099 - - 167-029 7 9 139.2" 246 SI39 18,173 $19 173 _362,432 $362 432 1,268,681 269 691 $1 919,252 $919 252 634,747 S6J4747 516 02 , , , , , , f53,000,000 $85.063.000 11,127,486,000 17,867,212 $99,683,917 0 6.029.255 $7,867,212 $105,713,172 $145,930,212 S1,2J3,199,172 1326,151,000 $9,733.'96,7_'8 SI,436,469,797 119,170,024,594 S 14,000,000 $14.000.000 18,311 55,099,617 $11018311 519,099,617 > 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTI V E ORDER AND ADDENDUM \ CATEGORY I

ADVERTISING, R&D AND YOUTH PREVENTION (S Actual) Philip Morris Rnnrc! b Developmeel E:pnditrre. (a) $32,169,534 5181,909,840 5590,534,587 S338,619,400 S1,IQ,23J,J61 Ceaa.a' . ln CTR Coobbutioes to General Fund (b) $605,377 $2,007.624 $12.657,334 f41,J91,198 $50,682,505 5109,344,059 Contributions oo Special Projects (b) f0 98.000 1,041,004 4,523,946 174,973 5,837.923 To1sl Coartbaloea to CTR 5605,377 f2,105,624 _ f1J,698,J58 f47,915,144 _~-550857,478 SI15,181981 ResnrcM & Devebpneel Espt.dhern and Co.eribetlou to CTR _ f605,377 $34.275.158 5195,WJ8,198 1618,449,7J1 $3119.476.1178 $1,_'58,415,342 AdverlYinB, M.rltel(e8 & Promolbe Espenditern (c) -- 549,525,967 $1.231.550.409 56,965,180,581 110,144,056,314 $19.390.313.271 YoetA Pmentlne F-nredNnres ' - -- - S 14 000 000 $14 000 000 Youth Prevention Eapeodihues (d) You>r Prevenaoe Eapeodioun duouYh TI (e) _- 0 0 0 2,097,060 , , 4,721,680 . , 6,818,740_ Total Ywtb Pme.tbe Espeedit.ro $2,097,060 f 1 S,721,680 S20 818~740 R.J. Revnolds Rese.rnY & Devebpmenl Eapeodltrrn (Q 515,000,000 $558.387.000 $554,099,000 $1.127.496.000 Cnetih.ties. en CI•R Coe6butions to Geeersl Fund (b) 51,792,006 $5.959.632 $17,683.774 $39.390,437 $34,858,068 $99,613,917 Contnbutions to Special Projects (b) 0 271,000 1,428,962 4.203.210 126,083 6,029,255 Total Coelr(brtioes to CTR S1 792 006 f6 230 6J2 $19,112,736 $4J 59J 647 S34,994,151 $105,713,172 RtsearN & Devebpme.t Espendlleres and Cwtr(botb.e to CTR $1,792,006 S6,2J0,632 $34.112.736 $601,980,647 5589,083,151 S1,?1J,199,172 AdveAW.B, Marknle8 Ar Proowtbn EspendRern u Stated 1e Aeswer to Ielerroplory Na. 21. (j) 5234,044,522 5679,18J,762 $1,360.207.765 f5,165,99q679 52,293,864,000 SV,73,t,29o,728 } Y ~ E.d.ated AdverWinl, M.rketie8 & Pronwebn [apsdk.w Reponad to FTC (b) 5234,044,522 $679.183.762 S1,S82,556,614 58,533,951,536 S8,140,288,160 519,170,024,594 / Y Ynatr t•reveerte. i'.e.aeu..r. YouA Preveeliow Eapmdimren (i) Yowh Preveneoe Expnditura through T1(e) 0 0 0 1,896,194 514,000,000 3,203,423_ $14,000,000 5,099,617 +w T.W Y..tb Pmealon Eapeaditeres $1,896,194 117,203,423 $I9,099617 .~ .ri/l 01/02/97 CONF'IUGNTIAL - SU W LCT TO MINNESO'I'A PRO'fICCTIV E ORDL'R AND ADDENDUM \ CAItiGORY I

7) ADVERTISING, R&D AND YOUTH PREVENTION (S Actual) Philip Morris Research & Development Expenditures (a) $1,143,233,361 Contibutions to CTR Contibutions to General Fund (b) $109,344,059 Contributions to Special Projects (b) 5,837,923 Total Contributions to CTR $115,181,981 Research & Development Expenditures and Contributions to CTR $1,258,415,342 Advertising, Marketing & Promotion Expenditures (c) $18,390,313,271 Youth PreventionyXRej3Aitures Youth Prevention Expenditures (d) $14,000,000 Youth Prevention Expenditures through TI (e) 6,818,740 Total Youth Prevention Expenditures $20,818,740 Total Domestic Tobacco Sales (1954-1994) $141,442,700,000 Expenditure Comparison fvl Advertising, Marketing & Promotion Expenditures to Total Domestic Tobacco Sales (1969-1994) 13.6% Research & Development Expenditures to Total Domestic Tobacco Sales (1962-1994) 0.8% Research & Development Expenditures and Contributions to CTR to Total Domestic Tobacco Sales (1962-1994) 0.9% Youth Prevention Expenditures to Total Domestic Tobacco Sales (1983-1994) 0.020% Youth Prevention Expenditures to Total Domestic Tobacco Sales (1954-1994) 0.015% Research & Development Expenditures to Advertising, Marketing & Promotion Expenditures (1969-1994) 6.1% Research & Development Expenditures and Contributions to CTR to Advertising, Marketing & Promotion Exp. (1969-1994) 6.7% Youth Prevention Expenditures to Advertising, Marketing & Promotion Expenditures (1983-19')4) 0.1% Youth Prevention Expenditures to Advertising, Marketing & Promotion Expenditures (1969-1994) 0.1% 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

ADVERTISING, R&D AND YOUTH PREVENTION (S Actual) R.J. Reynolds Research & Development Expenditures (Q 51,127,486,000 Contibottnw, to CTR Cootibutions to General Fund (b) $99,683,917 Contributions to Special Projects (b) _ 6,029,255 Total Contributions to CTR S105713 ,,172 Research & Development Expenditures and Contributions to CTR , S 1,233,199,172 Advertising, Marketing & Promotion Expenditures as Stated In Answer to Interrogatory No. 21. (g) 59,733,296,728 Estimated Advertising, Marketing & Promotlo Expenditures Reported to FTC (h) S 19,170,024,594 Yooth Preveotbo Pxnenditores Youth Prevention Expenditures (i) 514,000,000 Youth Ptevention Expenditures through TI (c) 5,099,617 Total Youth Preve.tio. Expenditures S 19,099,617 Total Domestic Tobacco Sales (1954-1994) $118,621.736.975 Esocnditure Comparison /vl Advertising, Marketing & Promotion Expenditures as Stated in Answer to Interrogatory No. 21 to Total Domestic Tobacco Sales (1954-1994) 8.2% Estimated Advertising. Marketing & Promotion Expenditures Reported to FTC to Total Domestic Tobacco Salcs(1954-1994) 16.ri: Research & Development Expenditures to Total Domestic Tobacco Sales (1964-1994) 1.1% Research & Development Expenditures and Contnbutioos to CTR to Total Domestic Tobacco Sales (1964-1994) 1.2% Youth Prevention Expenditures to Total Domestic Tobacco Sales (1983-1994) 0.032% Youth Prevention Expenditures to Total Domestic Tobacco Sales (1954-1994) 0.016•/. Research & Development Expenditures to Advertising, Marketing & Promotioo Expenditures as Stated in Answer w Intasrogatory No. 21 (1964-1994) 12.2% Research & Development Expenditures to Estimated Advertising, Marketing & Promotion Expenditures Reported to FTC (1964-1994) 6.0% Research & Development Expenditures and Contributions to CfR to Advertising. Marketing & Promotion Expenditures u Stated in Answer to Interrogatory Nu. 21 (1 Wi4-19)4) 13.3% Research & Development Expenditures and Contributions to CIR to Esunuted Advertising. Marketing & Pronuxiun Expenditura Reported to FTC (1964-1994) 6.6% Youth Prevention Expenditures to Advertising Marketing & Promotion Expenditures as Stated in Answer to Interrogatroy No. 21 (1983-1994) 0.3% Youth Prevention Expenditures lo Estimated Advertiaiag, Marketing & Promotion Expenditures Reported to FiC (1983-1994) ' 0.1% Youth Ptec vwtioa Expenditures to Advertising Marketing & Promotion Expenditures as Suted in Answer to Intertogatroy No. 21 (1954-1994) 0.2% Youth Pteveotioo Expenditures to Estimated Advertising. Marketiog & Pmmotioo Expenditurcs Reported to FTC (1954-1994) 0.1% 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECPIVE ORDER AND ADDENDUM \ CATEGORY I

CTR HN 043299

Philip Morris Advertising, Marketing & Promotion to Total Domestic Tobacco Sales (1969-1994) $18,390,313,271 ~ -~.. .~.. E Total Domestic Tobacco Sales m Advertising, Marketing & Promotion 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

Philip Morris Research & Development Expenditures to Total Domestic Tobacco Sales (1962-1994) $138,612,700,000 ~ Total Domestic Tobacco Sales $1,143,233,361  Research & Development Expenditures 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

Philip Morris Research & Development Expenditures and Contributions to CTR to Total Domestic Tobacco Sales (1962-1994) $138,612,700,000 $1,257,607,747 . Total Domestic Tobacco Sales m Research & Development Expenditures and Contributions to CTR 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

Philip Morris Youth Prevention Expenditures to Total Domestic Tobacco Sales (1983-199 $106,228,900,000 $20,818,740 m Domestic Tobacco Sales m Youth Prevention Expenditures 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

f -- Philip Morris Youth Prevention Expenditures to Total Domestic Tobacco Sales (1954-1994) $141,442,700,000 $20,818,740 0 Total Domestic Tobacco Sales w Youth Prevention Expenditures 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

Philip Morris Research & Development Expenditures to Advertising, Marketing & Promotion (1969-1994) $1,117,050,580 m Advertising, Marketing & Promotion . Research & Development Expenditures 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

Philip Morris Research & Development Expenditures and Contributions to CTR to Advertising, Marketing & Promotion (1969-1994) $18,390,313,271 $1,230,052,18> m Advertising, Marketing & Promotion m Research & Development Expenditures and Contributions to CTR 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTL'CI'IVL' ORDER AND ADDENDUM \ CATEGORY I

Philip Morris f Youth Prevention Expenditures to Advertising, Marketing & Promotion (1983-1994) ~ .~ $15,914,336,845 $20,818,740 w Advertising, Marketing & Promotion M Youth Prevention Expenditures 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

Philip Morris Youth Prevention Expenditures to Advertising, Marketing & Promotion (1969-1994) $18,390,313,271 $20,818,740 w Advertising, Marketing & Promotion m Youth Prevention Expenditures 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

CTR MN 043309

R.J. Reynolds Advertising, Marketing & Promotion Expenditures as Stated to Total Domestic Tobacco Sales (1954-1994) $118,621,736,975 $9,733,296,728 ~ Total Domestic Tobacco Sales ~ Advertising, Marketing & Promotion Expenditures as Stated 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

R.J. Reynolds Estimated Advertising, Marketing & Promotion Expenditures to Total Domestic Tobacco Sales (1954-1994) $118,621,736,975 $19,170,024,594 w Total Domestic Tobacco Sales m Estimated Advertising, Marketing & Promotion Expenditures 07/02/97 CONFIDENTIAL - SUB]ECT TO MINNESOTA PROTL'CTIVE ORDER AND ADDENDUM \ CATEGORY I

R.J. Reynolds Research & Development Expenditures to Total Domestic Tobacco Sales (1964-1994) $106,324,813,000 m Total Domestic Tobacco Sales $1,127,486,000 w Research & Development Expenditures i I 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

R.J. Reynolds Research & Development Expenditures and Contributions to CTR to Total Domestic Tobacco Sales (1964-1994) $106,324,813,000 $1,229,783,166 . Total Domestic Tobacco Sales = Research & Development Expenditures and Contributions to CTR 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

R.J. Reynolds Youth Prevention Expenditures to Total Domestic Tobacco Sales (1983-1994) $59,376,000,000 m Total Domestic Tobacco Sales m Youth Prevention Expenditures $19,099,617 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

R.J. Reynolds Youth Prevention Expenditures to Total Domestic Tobacco Sales (1954-1994) $118,621,736,975 w Total Domestic Tobacco Sales w Youth Prevention Expenditures $19,099,617 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

R.J. Reynolds Research & Development Expenditures to Total Domestic Tobacco Sales (1964-1994) $106,324,813,000 $1,127,486,000 w Total Domestic Tobacco Sales m Research & Development Expenditures 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

C R.J. Reynolds Research & Development Expenditures to Estimated Advertising, Marketing & Promotion Expenditures (1964-1994) m Estimated Advertising, Marketing & Promotion Expenditures m Research & Development Expenditures 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

, R.J. Reynolds - I Research & Development Expenditures and Contributions to CTR to Advertising, Marketing & Promotion Expenditures as Stated (1964-1994) M Advertising, Marketing & Promotion Expenditures as Stated m Research & Development Expenditures and Contributions to CTR 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

R.J. Reynolds Research & Development Expenditures and Contributions to CTR to Estimated Advertising, Marketing & Promotion Expenditures (1964-1994) 0 4 w w Estimated Advertising, Marketing & Promotion Expenditures w Research & Development Expenditures and Contributions to CTR ~ - -- - Ull P-% UD 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

R.J. Reynolds Youth Prevention Expenditures to Advertising, Marketing & Promotion Expenditures as Stated (1983-1994) $6,132,810,796 $19,099,617 m Advertising, Marketing & Promotion Expenditures as Stated m Youth Prevention Expenditures 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTL•CI'IVE ORDER AND ADDENDUM \ CATEGORY I

R.J. Reynolds Youth Prevention Expenditures to Estimated Advertising, Marketing & Promotion Expenditures (1983-1994) $15,086,014,698 $19,099,617 m Estimated Advertising, Marketing & Promotion Expenditures M Youth Prevention Expenditures 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

R.J. Reynolds Youth Prevention Expenditures to Advertising, Marketing & Promotion Expenditures as Stated (1954-1994) $9,733,296,728 $19,099,617 m Advertising, Marketing & Promotion Expenditures as Stated w Youth Prevention Expenditures 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

R.J. Reynolds Youth Prevention Expenditures to Estimated Advertising, Marketing & Promotion Expenditures (1954-1994) $19,170,024,594 $19,099,617 m Estimated Advertising, Marketing & Promotion Expenditures M Youth Prevention Expenditures 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIV E ORDER AND ADDENDUM \ CATEGORY I

Cf R f fN 043324

CTR HN 043325

( D ADVERTISING, R&D AND YOUTH PREVENTION (S Actual) 1954 )955 1956 1957 1958 1959 1960 1961 1962 1963 1964 Brown & Williamson R b & D W i 5 -4 ere e.eare pnea E.pe.d t.rn Q) (19 3) Ceeli6.IMw. 1o CIR Contibutioos m CTR Geoeral Fwid (b) 595,625 $94.000 5125,0W 5140,625 2106,563 $78,375 599.092 5122,000 $121.000 $137.750 $168.750 Caetriburioss b CIR Speail Projeas (b) 0 0 0 0 0 0 0 0 0 0 0 Total CeaAbaiou to CTR 595625 581000 $125000 5140625 5106563 $78375 S99092 $122,000 S12I000 5137750 5168750 Resear<l & Derebpos.t Eapeedit.ro and C..tr3.,fea to CTR 195,625 564,000 5125,000 $140,625 5106,563 578,375 199,092 1122,000 $121,000 $137,750 SI68,750 Adrertid.y Mar4eti.8 & Pr9molb. Eape.dit.rn (k) $38.139.000 S4t,545,000 548,136,000 541,403,000 538,894,000 545,215,0W 549,732.000 Yn.tb Preve.Ne. r.pmdihm YatlY hercnuo. Eapeadiwra (I) Yoat6 Prevesuoa Eapcaditwes tMough T1(e) Total Ye.tl Prereab. Eape.dlt.res Ameriean Tobacco (1944) (19$1) (1943) (1951) $6,494,604 Re.e.rrb & DneNpmea Eape.dll.re. (n+) (1951;) 1250,0W St,7 8,303 1-4 $84t; 43 C .t0..e rw.e.CTR Conubetionf a CTR Oenenl Food (b) 1479,250 5310,0W 5392,188 1382,813 $288,203 5218,248 $263,812 5306,5W 5316,750 5368,125 5.M,750 Contn'bwiona b CiR Speeut Projeen (6) 0 0 0 0 0 0 0 0 0 0 0 T.W Cwlrlbale.r I. CTR _ __P79,xso _ )p0,0110 1,492.1m! S3M2,MI_ $2M8,203 S21R,24M }:61,MI2 ~SlM,SW - 111p,750 - - j3pM,125 ~ -pW37W Rreareb & De.elpaant Eap..dlt.nm awd C.arlbale.e 1. CTR 1479,250 1560.000 12,110,491 $392.813 1288,203 $218,248 5263,812 $306,500 $316,750 5368,125 57,729,597 Ad.ertYia, M.rYtll.g & !•r.a.alk. Eape.dit.rr (.) S26,S22,405 529,551,646 530,426,964 524,580,622 132.373,837 538,97I,903 $40,284,175 $40.090.31 9 $44,655,180 153,277,568 SS6,777.S9t Yoa! Pre9e+tin. EMpeedieves (o) Yew6 Prevotio. Eapeeditwes Orou86 T1(e) TM.1 Ya.th Pr..e.0o. Etpe.dN.ra 07)02/97 CONFIDENTIAL - SUBIECT TO MINNESOTA PROTEC`I7 V E ORDL'R AND ADDENDUM \ CATEGORY I

ADVERTISING, R&D AND YOUTH PREVENTION (S Actual) f 1965 1966 1967 1968 1969 1970 1971 1972 )973 1974 1975 Brown & Williamson $585,894 294 SI 661 $918 000 $771 000 $889 000 $884 000 5949 000 $1r05 000 Raurcd & Devebpme.l Eapeedtt.ra U) , , . , , , , . Cn.tOv.tl.,.e te CTR Coaabutioss a CTR Gaeerd Fund (b) 5225,000 5255,000 $277,500 5336,875 $543.125 5512,500 5745,966 5512,476 $733,628 5894,555 $1-I00,764 CoatbnGo.f to CTR Speciil )hojcctf (b) 0 27.200 28,400 46,200 15,800 32,800 55,800 49,800 33,807 61,619 48,847 Tat.l Ce.tM.lle.e to CTR 5225,000 S282,200 S30 i900_ 5383 075 __ 5558925___ $5453, 00 5801 7~ 66 _ $562276 5767435 5956174 $1,149611 RneartY & Develnpeoe.t Eipe.dlt.rn .d Cearfb.tb.u to CTR 5225,000 5282,200 5305,900 $383,075 52,806,113 51,363,300 $1,572,766 $1,451,276 51,651,435 $1,905,174 S2,354,611 Advertbl.t, M.r4etie8 & Yromuttoe Eape.ditrro (Y) 554,763,000 556-876,000 560,031,000 f62,325,000 $66,920,000 $77,997,000 570,977,000 173,118,000 570,204,000 579, 443,000 592,239,000 Ye.t6 pJ,ear". F ....dtte.ee Yowh heveeuoe E:pendiwrcs (i) Youth P-tioa Etpcndi6va throoeh TI (e) TN.I Youth rreveab. E.pe.dlt.ree Amerlcan Tobacco Reae.n\ 6 Derelopmea E.pe.dlara (m) $ 439,682 12,u7,Y25 $3,557,576 13,339,)61 53,719,515 $3,913,178 P..1iMltw.e te CTR Conebuuom to CTR Canenl Fwd (b) 5476,250 1483,750 1472,500 5516-250 $783,750 5650,000 5334,015 1550,139 S674r91 1787,066 S861,214 CoemRb.tium to CTR Spaial Frojecn (b) 0 51,600 51,000 70,800 22,800 41,600 61-'00 53.400 33.404 $7,009 43.969 T.tei Ce.trib.tb.e to CTR $476,250 $535`50 S52J 500 5587 050 $806 550 $691,600 5395,215 S603,739 $707,695 S84{075 5905,233 Reanreb & (kvebptent Ertpe.dtteres .d G.trib.Us.. te CTR 5476,250 5975,032 5523,500 $587,050 5806,550 $3,129,325 $395.215 54,161a15 54-147,056 54,563-590 $4,818-431 Adv.nW.l, Merbet48 & Premutbe Eapeedlt.ra (.) 558,417,701 $69,937,582 $66-136,242 $134,933.116 563,508,380 2103,667-893 257,870,0181 134,530,463 $32,473,414 5 44.07y,434 S59,tN6,146 yeetr PreeeetL.. P.ne.dtr.rn Youth Preventio. Eyendi6ua (o) enditrres duou86 TI (e) Yo.A Prcven6oe Ex p Teta) Yo.tta fineaNo. Eipe.dit.ra 07qL97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTI VE ORDER AND ADDENDUM \ CATEGORY I

ADVERTISING, R&D AND YOUTH PREVENTION (S Actual) I 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 Brown & Williamson Resrarcr k Derdupmta Eape.d)t.ra (1) $1,157,000 SI,365,000 51,637,000 52,129,000 $4.236.000 $4,407,000 $5,210,000 56,037,000 $6,546•000 $8.372.000 $6,578•000 r..~ua~.. t. CTR coe63utioes to C)R Geecrsi Fund (b) $1,219,921 $1.092.261 $1,)53,457 $1,I07,673 51,059,512 5970,072 $1,189.269 f1,166•355 f1,270.627 $1.394.952 SI•728•575 ComnDutions to CTR Spccial Projats (b) 64.585 121,263 11J,552 134,692 155,288 132,960 193,979 140,746 105,983 122.122 277,880 Te/ai Coarlbctb.s to CFR fi284.506 Si,213524____ f1,267009___ ft 24, 2,165___ __21,214 800 51,10J~32_-SI J, 83,247___SI,J07,101__ SJ.376610 f1i17074 f2,006_~455 R<se.rcY 4 De.dopmea E.pe.do.ra s.d Co.tr{bNb.. to CFR $2,44006 52,578,524 S2•904,009 53,371,365 55,450,800 55•510,032 $6,593•247 S7,J44,101 57,922,610 59,889,074 58,584,455 AdrerU.l. f, M.rlut).8 & Promotb. Eape.dit.rn (4) $119,080.000 f127,276,(88/ f144,510,OW 5213,510•000 5222•959,OM1 f358,515,000 5367•337,W0 5314•180,000 5315.819,000 $J11•972,U00 5267, 258,000 Y Prcrotio. Expcnditurea ()) o.d. Yoth heveetio. Espcediture throu8h Tl (c) - - 9•738 190487 259765 117d78 ToW Yortll Pnvcalo. Espe.dit.rcs 19738 _ 5190,487 f259•765 5117,878 Amerinn Tobaeeo $563.416 Rex.rctt & DcrcMpme.t Eapcadit.ra (tn) $4.395,616 $4,547,734 54,709,893 $5,254,000 f5,525•JIJ 55,995,134 $6•481,330 56,803,659 $7,002•308 $7,175•947 CewtOw,tle., to CTR Contibations n CTR Gatenl Fond (b) $1.055.916 5888,620 $905,940 5748,421 $888•628 $741,469 5742,714 f893•878 S93{325 fo51•196 SI,105•217 Coumbudons b CTR SPccul Projecn (6) 57,328 --- 106,254 90,476 - 103•525 -. -------- 124,605 ------ 104,905 -- ------ 137,028 - -- -- _ 94.069 -- 79,778 8~ YOa _ f7_5 .30 Total Co.tribabs to CTR 51.113•144 f99487~ ~_ S996A16 f851•946 f1.013•233 _ 5846,373 f879,742 5987,947 51.014,10J SI,016,000 SI~80,}.17 Rcae.rt! & Devebptoeot Espt.dN.ra sed Coartbabu to CTR f1,113,144 $5,390,490 $5,544,150 f5,561•8J9 $6•267,233 $6.371,686 56,874,876 $7,469-177 S8,38t,178 $8•038•308 $3•456,694 AdccnW.B, M.rkctl.8 Q Prot.alo. Eapcodltorec (.) $75,035•750 577,5J)•000 $79,7(M,869 $9o,7W,)80 597,292,481 S84n46,09/ $f7u,080,591 5111,2trv,)71 fe7,211,}35 f114,We•BIJ f~q48:•886 Yoab Prc.otio. Eapndibves (o) Yo.A heremio. Ecpeeditwes throu8h TI (c) 2.206 5434 1 6i 249 4 28,144 ToW Ya.t! Prcvc.Ue. EtPe.dit.rcc _$2,206 f54,5a1 - f65,:49 S28,IM 07 02A7 CONFIDENT)AL • SUBIECT TO MINNESOTA PROTECII V E ORDER AND ADDENDUM \ CATEGORY 1

ADVERTISING, R&D AND YOUTH PREVENTION (S Actual) I 1987 1988 1989 1990 1991 1992 1993 1994 1954-9 Brown & Willi2mson Rutarc! & Devebpmea Eapeaditeree 0) $7.313.000 L7,929,000 $5,117,000 $5,576,000 $5,417,000 55,702,000 $5,384,000 53,090,000 599,965, 188 Csa.7..16,. tn CTR = Caaa'bu4oe~ to CSR Geeenl Fwd (b) f1,802,087 $1,975,311 $1,982,550 $2,201,026 $2,137,030 52,698,230 $3,095,923 $2,867,365 539,528 ,363 CoaibWi6ae to CTR Speci.l Projecu (b) 290,687 149,940 119,537 47,859 0 0 0 0 2,571,345 Taul Cwtrlbalou to CTR $2092774 $2125251 52102087 $2,248,885 52,137,030 52,698,230 53,095,923 52,867,365 542,099,709 Rnearel & lkrelupmea Espeadit.re. a.d Cearia.Usu 1. CTR 59,405,774 57,054,251 $7,219,087 $7.924,885 $7,554,030 $8,400,230 58,479,923 57,957,365 5142,064,897 AdverWl.B,MarbeW86Prom6lbaEsPeadit.rn(k) 5277,470,000 $384,186,000 5466,148,093 5381,364,608 5528,0 54,248 $611,850,684 5681,993,449 5454,917,345 $7,616,377,427 t'vwe.dhreee Ye.d. here.dwm Yori Prereao6a Eapendimrn (1) YoA Preremi6. Eaytedi6ues Wou86 T1(e) 53,141 6,753 0 0 0 0 0 5,042 642,805 Tela1 Ya.U Prevealu. EapndNeree S53 141 $6 753 55,042 _ 5642,BOS American Tobacco Reenrcb & DevebpmcM Eapeadll.ree (.) 57,797,0W 58,238,881 511,368,000 511,801,000 59,485,000 $134.055.418 Ce.u6.IM.. I. Cr$ CoMibutioss b CTR Genetal Fund (b) 51,121,960 $1.245,548 $1,2J8,943 $1.339.819 11,478,6J0 $1,79•1,877 $1,772,15I SI,770,V5S $3119 .16.234 Conbibuli6ns to CfR Spuid Pr ~joa. (b) 204,687 94,608 . . - 75,310 __ . . _. 29,665 . - 0 - 0 ... 0 0 - 2,049,554 TNaI CMlrlbale.- t. CIR }i~)r;rd7 )1140,1}6 1I,)IA,711 11\^9,484 )1u8n10 }I7w877 1(rrl\1 )I//IIWa ~IIVI/CV1 RatanY & 17eveleyaseal Eapeadlt.ns and C../rfbale.e t. CTR 59,123,647 $9,579,037 $1.314.253 51,369,484 51,478,630 513,162,877 513,573,131 $11,255,933 5161,033,011 AdvMW.B. MaAW1.8 k Proealb. Eapndlt.ree (a) 5171,806,000 5232,525,000 5277,293,000 $26S,597,476 $279,100,147 $322,683,541 5336,234,474 5336 ,234,474 S4a91,001,467 Y6wb Ptevaneos E.Pesdimra (6) Ywd Reve+u6. Ecpeadi6uea dlrou8b TI (e) 12 917 25,029 3,510 71,049 295,354 194,762 161 517 3,611 917,888 Tel.1Y6.tlPeeveab.E.pe.dllrre. $I2917 525029 53510 571049 5295,354 SI94,762 SI61,517 $3611 I $917,888 07/0y97 CONFIDENTIAL - SUB3ECT TO MINNESOTA PROTECTI VE ORDER AND ADDENDUM \ CATEGORY I

ADVERTISING, R&D AND YOUTH PREVENTION (S Actual) I 19545 1960•6 1970-7 1980 8 1990 9 1954-9 Brown & Williamson Rexardt & Devebpme.t E.pe.dit.rew (J) $2,247,188 $11,804,000 $58.745.000 527,169,000 599.%5,188 Cn. 'ha +w.e n CTR 363 5 8 CoonLuuats to CTR Gcaeril Fund (b) 5630,188 $2,286,092 $9,073.200 $14.539,310 $12,999,574 539, 2 , aciil hq«ts (b) Co.at'Uaioo to CIR S 0 117,600 716,765 1,689,121 47,859 2,571,345 p ToW CwteSMt{as to CTR S63~Otbb S2w36,9 SI622_y431SI3,Otl,4J3 S42L099~7 _09 Rese.rN & Dndspmea Eapndlt.re...d Ca.tn'D.Uos to CTR 5630,188 $4,650,880 521,593,%5 374,973,431 540,216,433 $142.064,997 AdrenW.B, M.rketl.8 & /remoUo. Eape.dll.ree (t) 579,6M,000 $524,295,000 51,068,374,000 53,285,844,09J $2,658,180.334 57,616,J77,427 Yw nt here.tl.F.....du.r You6 hcro6os Eapeoditota (1) 042 5 637 762 642,805 YowB Prevauian Eapendi6ret throo86 T1(e) - - , , _ 042 762 $5 5637 805 ~2 Tol.l Ye.th tre.eab. E.pe.dN.ree , , , -...._..-._. Amerlc2n_Tabasc9 Rm.are! & DweNptn.t Eape.dMrro (m) 31,96ta03 s7,775,529 $30,820,598 $0.1136.9118 532,6s4,000 $134,055.418 Ce.NhaM.. Iw LTR 9 8 239 Ct.ubaiou to CTR Gceenl Fwd (b) 52,070,701 54,381,437 57,455,792 59,863,877 $8,156,432 , 531, 2 Coembmloss to CTR Special hojeca (b) 0 1%,200 648,165 1,173,324 29.665 2,049,354 TaW Ce.trib.tNs to CTR $2,070,701. 34577637 $8,103,957 $11039201 58,186,097 S3J,977,59J RanreY & Devetepme.t E.pe.dR.rn..d Caa./E.tle.e t. CTR $4,039,004 512,353,166 538,924,555 571,876,189 540,840,097 5168,033,011 Adva1W.8, M.rke11.8 & homotlo. E.pe.dN.res (.) 5182.427,377 5627,917,853 5655,250,349 $1.385.553.776 $1.539.850.112 $4,391.001.467 Ye.N fre.e.Hw. Feendu..ee Yemf he.edo. Ecpendt6res (o) 191 596 726,292 917,888 Yo.tb heaauue Eapeedmues throo86 TI (e) , 5191 5% 726,292 $917,888 TMaI Ye.t\ heve.tb. Eapendt.res , CONFIDENTIAL- SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I 07AD2 97 .

ADVERTISING, R&D AND YOUTH PREVENTION ($ Actual) Brown & Williamson Research & Development Expenditures (j) $99,965,188 Cottibutlons to-Cjg Contibutions to CTR General Fund (b) $39,528,363 Contributions to CTR Special Projects (b) 2,571,345 Total Contributions to CTR $42,099,709 Research & Development Expenditures and Contributions to CTR $142,064,897 Advertising, Marketing & Promotion Expenditures (k) $7,616,377,427 Youth Prevention Expenditures Youth Prevention Expenditures (1) Youth Prevention Expenditures through TI (e) 642,805 Total Youth Prevention Expenditures $642,805 Total Domestic Tobacco Sales (1954-1994) $50,209,588,600 Expenditure Comparison (v) Advertising, Marketing & Promotion Expenditures to Total Domestic Tobacco Sales (1958-1994) 15.2% Research & Development Expenditures to Total Domestic Tobacco Sales (1954-1994) 0.2% Research & Development Expenditures and Contributions to CTR to Total Domestic Tobacco Sales (1954-1994) 0.3% Youth Prevention Expenditures to Total Domestic Tobacco Sales (1983-1994) 0.002% Youth Prevention Expenditures to Total Domestic Tobacco Sales (1954-1994) 0.001% Research & Development Expenditures to Advertising, Marketing & Promotion Expenditures (1958-1994) 1.3% Research & Development Expenditures and Contributions to CTR to Advertising, Marketing & Promotion Exp. (1958-1994) 1.9% Youth Prevention Expenditures to Advertising, Marketing & Promotion Expenditures (1983-1994) 0.013% Youth Prevention Expenditures to Advertising, Marketing & Promotion Expenditures (1958-1994) 0.008% 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

1 ADVERTISING, R&D AND YOUTH PREVENTION (S Actual) American Tobacco Research & Development Expenditures (m) $134,055,418 Contibutions to CTR Contibutions to CTR General Fund (b) $31,928,239 Contributions to CTR Special Projects (b) 2,049,354 Total Contributions to CTR $33,977,593 Research & Development Expenditures and Contributions to CTR $168,033,011 Advertising, Marketing & Promotion Expenditures (n) $4,391,001,467 Youth Prevention Exnenditures Youth Prevention Expenditures (o) Youth Prevention Expenditures through TI (e) 917,S~J Total Youth Prevention Expenditures $917=S8S Total Domestic Tobacco Sales (1954-1994) $50,769,596,304 Expenditure Comparison (vl Advertising, Marketing & Promotion Expenditures to Total Domestic Tobacco Sales (1954-1994) 8.6% Research & Development Expenditures to Total Domestic Tobacco Sales (1954-1994) 0.3% Research & Development Expenditures and Contributions to CTR to Total Domestic Tobacco Sales (1954-1994) 0.3% Youth Prevention Expenditures to Total Domestic Tobacco Sales (1983-1994) 0.005% Youth Prevention Expenditures to Total Domestic Tobacco Sales (1954-1994) 0.002% Research & Development Expenditures to Advertising, Marketing & Promotion Expenditures (1954-1994) 3.1% Research & Development Expenditures and Contributions to CTR to Advertising, Marketing & Promotion Exp. (1954-1994) 3.8% Youth Prevention Expenditures to Advertising, Marketing & Promotion Expenditures (1983-1994) 0.035% Youth Prevention Expenditures to Advertising, Marketing & Promotion Expenditures (1954-1994) 0.021% 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

E~TR HN 043333

Brown & Williamson f Advertising, Marketing & Promotion Expenditures to Total Domestic Tobacco Sales (1958-1994) $50,209,588,600 $7,616,377,427 .~ ~ ~ 0 Total Domestic Tobacco Sales m Advertising, Marketing & Promotion Expenditures 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

Brown & Williamson Research & Development Expenditures to Total Domestic Tobacco Sales (1954-1994) $50,209,588,600 $99,965,188 w Total Domestic Tobacco Sales m Research & Development Expenditures 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

Brown & Williamson Research & Development Expenditures and Contributions to CTR to Total Domestic Tobacco Sales (1954-1994) $50,209,588,600 ~ Total Domestic 'I'obacco Sales ~ Research & Development Expenditures and Contributions to CTR $142,064,897 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

Brown & Williamson $27,031,963,000 Ull Youth Prevention Expenditures to Total Domestic Tobacco Sales (1983-1994) m Total Domestic Tobacco Sales m Youth Prevention Expenditures $642,805 ~ ~ - - Ull "`~xi 07/02/97 CONFIDENTIAL - SUf31ECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

Brown & Williamson Youth Prevention Expenditures to Total Domestic Tobacco Sales (1954-1994) $50,209,588,600 M Total Domestic Tobacco Sales W Youth Prevention Expenditures $642,805 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

Brown & Williamson Research & Development Expenditures to Advertising, Marketing & Promotion Expenditures (1958-1994) $7,616,377,427 $99,965,188 m Advertising, Marketing & Promotion Expenditures . Research & Development Expenditures 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

Brown & Williamson Research & Development Expenditures and Contributions to CTR to Advertising, Marketing & Promotion Expenditures (1958-1994) $7,616,377,427 $141,619,647 . Advertising, Marketing & Promotion Expenditures . Research & Development Expenditures and Contributions to CTR 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

Brown & Williamson , Youth Prevention Expenditures to Advertising, Marketing & Promotion Expenditures (1983-1994) 0 Advertising, Marketing & Promotion Expenditures w Youth Prevention Expenditures 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

Brown & Williamson Youth Prevention Expenditures to Advertising, Marketing & Promotion Expenditures (1958-1994) = Advertising, Marketing & Promotion Expenditures w Youth Prevention Expenditures 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

CTR { fN 043343

American Tobacco Advertising, Marketing & Promotion Expenditures to Total Domestic Tobacco Sales (1954-1994) $50,769,596,304 $4,391,001,467 m Total Domestic Tobacco Sales m Advertising, Marketing & Promotion Expenditures 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

C American Tobacco Research & Development Expenditures to Total Domestic Tobacco Sales (1954-1994) $50,769,596,304 $134,055,418 m Total Domestic Tobacco Sales s Research & Development Expenditures 07/02/97 CONFIDENTIAL - SUf3JL'CI' TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

American Tobacco Research & Development Expenditures and Contributions to CTR to Total Domestic Tobacco Sales (1954-1994) $50,769,596,304 $168,033,011 w Total Domestic '1'obacco Sales m Research & Development Expenditures and Contributions to CTR 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

American Tobacco Youth Prevention Expenditures to Total Domestic Tobacco Sales (1983-1994) $18,349,500,000 m Total Domestic Tobacco Sales w Youth Prevention Expenditures $917,888 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

American Tobacco Youth Prevention F,xpenditures to Total Domestic Tobacco Sales (1954-1994) $50,769,596,304 m Total Domestic Tobacco Sales m Youth Prevention Expenditures $917,888 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

American Tobacco Research & Development Expenditures to Advertising, Marketing & Promotion Expenditures (1954-1994) $4,391,001,467 $134,055,418 ~ .~ m Advertising, Marketing & Promotion Expenditures m Research & Development Expenditures 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

American Tobacco Research & Development Expenditures and Contributions to CTR to Advertising, Marketing & Promotion Expenditures (1954-1994) $4,391,001,467 $168,033,011 m Advertising, Marketing & Promotion Expenditures m Research & Development Expenditures and Contributions to CTR 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

American Tobacco Youth Prevention Expenditures to Advertising, Marketing & Promotion Expenditures (1983-1994) $2,633,386,717 w Advertising, Marketing & Promotion Expenditures a Youth Prevention Expenditures $917,888 07/02/97 CONFIDENTIAL - SUI3JECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

American Tobacco Youth Prevention Expenditures to Advertising, Marketing & Promotion Expenditures (1954-1994) $4,391,001,467 0 Advertising, Marketing & Promotion Expenditures 0 Youth Prevention Expenditures $917,888 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

CTR HN 043353

CTR MN 043354

ADVERTISING, R&D AND YOUTH PREVENTION (S Actual) 1954 1955 1956~ 1957J 19581 19591 19601 19611 19621 19631 19641 Li,Ctstt Re.nrcY & Derelopme.t Eapeeditures (p) SI,404Z25 $1.952.672 S1,912,916 S1,797,746 51,748,066 51,771,063 $2,034,721 $2,125,709 $1,996.881 52,306,851 52,299,606 e-eat•'hai,.., to CTR Conn'bmau to CTR Geetnl Fund (b) S0 SO SO SO SO $0 SO S0 50 50 1158,812 Coetn3uoom to CTR Speciil Projects (b) 0 0 0 0 0 0 0 0 0 0 0 ToW CwtrOtabs to CTR so so so --- ----- so------ --so so so so $0 so 5158,842 RneareY & Devdopmest Eapeadit.m aad Cwtra.tbas to CTR 51,40e.225 51,852,672 51,912,916 11,797,746 $1,748,066 11,771,063 $2,034,721 52,125,709 51,996,881 52,306,851 52,458,449 AdrM1J.=, MarieU.B & Promotlo. E.pnditare. (v 532,974,227 S38,S82,784 544,266,130 146,432,623 546,496,663 553,279,230 546,727 :69 545,294,462 S45a10,447 549,230,392 544,762,798 YaRillre.e.u.. Eypudil.cn YwtA Prc.vtioe E.pendimrcs (r) Yuua Pre•antiu. E.pendiWret duuur6 TT (e) Tet.l You. Pre.eatb. Eape.d/trm L4rlllaLd Rtaeartl & Ds.ebpmeut Espe.dit.res (.) 51,067,9i8 Cn.n7a.eM., to CCR Conobu6oss tn CTR Gceeril Fund (b) 5104,000 559,000 169,063 170,313 277,016 596,372 $118,126 5131150 5129,250 SI54,371 $168,748 Contrtbudom to CTR Spe.ciil Projects (b) 0 0 0 0 0 0 0 0 0 0 0 TeUI Cntrmaie.s te CTR $104000 159000 $69,063 1703I3 577,016 596,372 SI18,126 1131,250 $129,250 $154,373 $168,748 RtxarcY & Devebpaeeel E=peadit.r.a ud C.atriWtle..l. CTR 5104,000 $59,000 569,063 170a13 $77,016 596,372 1118,126 $I31:50 5129,250 SI54,375 11,236,696 766 737 S37 S35a73a09 AdverlWq, Marketl.8 & Prooutb. Eape.dlt.re. (t) Ye.In Preveal... Psawdit..r. , , YauY Prcveetio. Ecpeediova (u) Youd Peeveetio. E:pmdimrcf Nroueb TI (e) 0 0 0 0 0 0 0 0 0 0 0 T.td Yauth Prereutb. Eape.dlt.m 07)py97 CONFIDENTIAL-SUII3ECT TO MINNFSOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

ADVERTISING, R&D AND YOUTH PREVENTION (S Actual) I 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 LIYYs=[t Researei & Devebpmeet E.pe.dllora (p) $2,135,060 $2.200,246 52,426,352 $2,775,043 $2,939,565 $2,799,375 f3,104,379 $3,418,110 $3,190,744 52,701,245 33,002,126 - to CTR Conlibutiuns to CTR Gcncral Fund (b) 5186,885 5168,750 $165,000 541,21M $1.185 fo S0 f0 SO SO S0 Cootributioes to Cr1t Special )hojau (b) 0 18.000 17.800 24.600 _ _ _ 7,400 16.000 19,200 19,200 7,818 11.614 2,199 ToW Co.vfb.tbs Io CTR $186,885 $19i6750 f182,800 $65,806 $8 5015 _ $16000 $19200 $19,200 $1A18 f11614 fI199 Ree.eeY & lhrdop.e.1 Esp..dL.re...d CoaAb.ebs to CTR 52,321,945 $2,386,9% 52,609,152 $2,840,849 $2,948,150 $2.815,375 53,123,579 53,437,310 53,198,562 52,112,859 53,004,325 Ad.enhf.8, M.r(ut1.8 & promaUn. E.pendll.ra (q) 533,384,000 $38.739.000 $35,448,000 5M340,000 525,257,000 f21,713,000 $21,420,000 517,828,000 $ 13,100,000 216,849,000 $24,129,000 Ynaib rrereNln. i'...r.di/n.e+ YawY Picveaio. Eapmdi0va (r) Yo.& Ple.rnticn Eapcediwre: du9o86 TI (e) Total Y6.o\ Prevaa)eo E.pe.ditrra Iotillacd Reaorch & De.e4pasiea E.pe.dRore (s) 51,041,152 S%1,752 $1,122,768 $1.179.786 $I,2%,311 $1.495.000 51,521214 $1,827,354 $1,775,639 11 ,956,351 12214,369 Cn.1iA.riw.. 1, CTR Con6'bmioef t6 CTR Gmer.l Food (b) $176.248 $176,248 SI83,428 5236250 5357,500 5287,500 $892.156 5290,230 5361,458 5423,431 5517,401 Conenbodoas 10 CTR Speci.l Projau (b) 0 18,800 19200 32,400 10,400 18,400 28200 27,600 17,370 29,875 23,050 Total Coaribolbu to CTR 5176248 $195048 5202628 $268,650 5367900 $305900 S910J56 $317830 5378828 f453,306 S540451 Rese.reh & De.elspseea Espeodit.rn..d Ceu.nbolle.. a CTR 51217,400 $1,156,800 $1,325,3'16 f1,448,436 SI,664,211 SI,800,W0 $2,431,570 5:,145,184 $2,1S4,4o7 52,40.,657 5:,754,8_`0 AdrenY48, M.rkaYB & Trorlle. E.pe.d(l.re. (t) $35.095.072 538,613,71 I $46,716,685 $44,024,023 f45,554,855 $56,475,000 f32,610,9t.6 532,790,9Y2 f-10,705,000 f.1/.118,1W 574,0,i/,OW YeWM hsvee/f0. Gtpeodlhre. (.) Ya.6 preve.dn. Gp..di4re. IYo+eh 77 (<) 0 0 0 0 0 0 0 0 0 0 0 Total YoaU Pmstl.. E.p..dNrro 07N2M CONFIU@N77A I-- SUUICCI' TQ MINNISOTA PBU'Il A' Il V li URUL'R ANI ) AOI)F-NI)I IM \ CATGIA)R Y I

ADVERTISING, R&D AND YOUTH PREVENTION (S Actual) ~ 1976 ~ (.(_,~,vrtt Rneara & Devebpmeac Eapeedurra (y) 53,759,776 re.n~a~.. m crR Caen'buuoos to CTR Genaal Fuod (b) Contrtbmiaas to CTR Speciat Prqats (b) so 424 Total Ce.tn3otio.m to CTR S424 Reuarc6 & Derebpmeol Eape.dit.rea aod Ceotribetio.a te CTR $3,760,200 AdrerWlag, MarteWg & Promatloo Eape.dit.re. (q) $18,823,000 Yeet. He.e_•tM. F..vwdit.r Yomh Prevotion Eapendieua (r) Yomh Prcvmlion Expenditure= through TI (e) Total Yeut1 freveotloo Eapeaditerea -- _ -T -1977 I -------- 1978 I980 _ $3,932,099 53,623,722 53,028,594 SI.185,221 19811 1982[-1981 51,346,561 51,338,104 51,619,167 so so So So so so so 0 0 0 0 0 0 0 S0 SO $0 S0 S0 $0 53,932,099 $1,346,561 1981 1985 1986 52,004,417 s2.040,184 S2J02,665 so so So 0 0 0 so 52,004,417 so 52,040,184 so $2,302,665 539,446,600 538,076,400 519,431,500 $10,624,516 513,589,565 517,422,700 530,891,000 $66,383,700 $122•902,793 $69,684,073 882 52,334 125,091 12,054 53,623,722 - $882 582,J34 S12S,091 S12,054 _ -- -- •- - 53,028,594 51,185,221 51,338,104 $0 51,619,167 L4IlllILd Raeareb 6 De.elopowral Eapeedtl.re. p) $2.452.854 52,744,420 $3/W0,000 53,551,UU0 54,328,000 $6,505,000 $7.483.000 SeJ74,000 $9.393.0m 510,086,000 59.496,000 r..~~MnL... te -rel Contibwioe. b CTR Geeer.l Fued (b) 5587,127 5543,579 5656,047 5631,191 $718,379 $704,934 5746,153 $837,690 5984,496 $1,021,440 51,180,694 eeial hejccu (b) Caotribuwfoe. to CTR S 30 233 59.757 63,444 80,252 104,203 94,950 129,296 02,e76 85,271 84,070 IW.058 _ p Total C.e/rlbetbee t. CfR , 5617)60 __ .NA3336 S7iy.yi ,., f71i,44J }822,782 S799'e8. ;875,++9 ~v_wlee _~~oev,7e7-- --~I,Iw~w ~ . . _31.37o.7i2 Rewnb & De.eMpnuot Eapeadp.ru a.d Caarebolb.a N CTR 53,070,214 53,347,756 $4,679,491 $4.262.443 S5,I30,782 57,304,884 $8,358,449 $9,324,366 510,462,767 $11,19qS10 S10,Se6,752 AdvertYhp MartuWg & Proewete. [apndit.re (t) 583,334,000 $97,084,000 St13,837,000 $176,197,000 $172,232.000 5178,624,000 $167.313.000 5256,38 8,000 5213,907,000 5200•978.000 5196,174,000 Ya.L rm'eafM. F+eewdit.re. Yonh Peerentioa Eependieues (u) Yoah Preveetioe Expmdltures Ovough TI (e) 0 0 0 0 0 0 0 7-1883 130 922 196 724 94,824 Total Youl Freveattoo Eapeedituro 724 584.824 07A2N7 CONFIDENTIA(. • SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

ADVERTISING, R&D AND YOUTH PREVENTION (S Actual) I 1987 1988 1989 1990 1991 1992 1993 1994 1954-9 ig~g5.tt Rerard & Devde+pmeat Eape.dilarv (p) $998,516 SI,941,767 $1,926,541 $2.171,255 52,193,192 $2,453,915 52,220,714 51,470,722 593,499,833 fear0.ati,..- to (TR Coouba4onf b C7R General FwW (b) S0 SO S0 SO SO $0 50 $0 1721,869 Comr3u6oas to CTR Spedd Projects (b) 0 0 0 0 0 0 0 0 144,255 TeW Cwtribafeee to CfR SO so $0 so SO-_-_- so SO so $866 li 24 ReaearcY & Devdoya.e.t Eape.dlterv aad Co.trRetiees to CTR $998.516 51,941,767 $1,926,341 $2,171,255 $2,193,192 $2,453,915 $2,220,714 51,470,722 594,365,956 AdvertWaB, Marlcetla8 4 Pnmetba EapeedYeres (q) 585,832,723 $110,475.338 $93,506,604 $72,045.052 $120.014,061 5186,196,950 5173,804,000 $70,615 ,000 52,130,329,603 Ye/L Preve.tln. i'.nr.Al..r.. YoWY Prcreauo. FaymdiWrn (r) Yow6 heveetio. E.ymdiuves duou8h TI (e) 4,864 4,260 137 3 85~. 8 . __ 25.854 26361 14,591 59 300,344 T.W Yeeth h.wetY. [ayeadRaro 54864 __ _,260 SI37 LL 3,88 $25,854 526,361 514,591 . S39 _~300,144 I.odtVcd Researeh & Derduy~H E.p..dR.re (s) 510,645,000 $11,122,000 $10,760,000 111,725,000 $11,476.000 511,521,000 SII,866,000 $11,751,000 $176,698,918 tw C[R Coenbutions so CTR Ceneral Fued (b) 51,266,704 SI,451,569 51,493,867 51,533,071 $1,594,063 $1,870,264 51,750,210 51,902,162 526,563 ,202 Coembrtioes to CTR Special Projects (b) 156.796 112,657 90,113 34,420 0 0 0 0 1,638,491 Twl Ce.trib.Heu to CTR $1,423,500 51,564,226 $I583980 $1,567,491 51594063 SI870264 $1,750,210 $1,902,162 S28,201693 RaeareY k Ds.elepmnt Eape.ditero a.d CwtrWrllees te CTR 512,068,500 512,686,226 $12.343.990 $13.292.491 513,070,063 SI3,391,264 513,616,210 513,653,162 5204,900,61I Adver1b1a8, MarkeNS & Prosetbe Espeadit.res (t) 5205,753,000 5256,408,000 $271,289,000 5333,338,000 5314.076,000 5333,020,000 5364,324,000 $29: ,678,017 $4,773,84t,)87 y-n ne.ead.. F..e.Axar.a Ypub Pteven4oe ExpmdiWra (u) You16 Prcvetio. Eapeadiouu Ovou86 TI (e) 43,940 36 016 4 947 95 823 317 520 244 622 149,148 4,842 1,335,511 eaditares TeW Ye.th Preveab. Es S43840 536016 54.947 595.823 5317.520 S241.622 S148.148 54.842 SL335.511 O 07qy9) CONFIDENTIAL • SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY 1

ADVERTISING, R&D AND YOUTH PREVENTION (S Anl,at) I -lgo~tt Rnnrt- & Devdopmut Eape.dit.rn (y) Cn. :h.r.. CTR Contibu0oes to CTR Gcnval Fond (b) Contribuliom to CTR Spceia1 Projecu (b) TeW Co.trW.llws to CIR Raran- & Devcfopne.l E.pe.dll.m ..d Co.ta4b•I6o.s to CTR [ 19S4-5% 1960-6% 1970.7% 1980-8% 1990-9 1954-9 $10.486,688 523,240,034 5721,869 67,800 $32,560.170 10 76,455 516,703,I43 SO 0 578,669 f76r455 S0 S10,486,688 324,029,702 $32,636,625 516,703,143 $262,031,658 5393,493,368 0230,816,500 $621J13,014 $10,509.798 $93,499,833 S0 5721,869 0 144,255 S0 5866 124 f10,509,798 594,365,956 Advert4b8, Marlutle8 & Proraul{w Eapeaditora (q) Ve.r6 Prevewi . Ecp<editu.« You6 Preveauon Eaprndilwes (r) YoWh Prevesttiaa Eapeedilorcs tMoueh TI (c) Tetd Yo.t- Prevnllw Eapeodtloro . 5229-622 ____ $622,675,063 $2,130,329,603 70 723 100,144 $70,723 S300.344 Ir4I1BaLd Reaeanb & Drvebprweal Eape.dllam p) 56,669,717 $23.498.201 $88.192.000 f58-319,000 5176,698,918 C..r0..t1..c to CTR CaeUbutions to CIR General Fuod (b) 5475,763 11,831,423 $5,180,120 510,426,126 58,649,770 $26,563,202 Coeln-butiaas b CTR Special Projocts (b) 0 80,800 378,18I 1,145,090 34.420 1,638,491 ToW Coatrlbrtboa to CTR 0475.763 SI,912,223 $5,558>01 SI1,571,216 58,684,190 $28,20163 Rasprc\ & Devebpment Eape.dil.res aod CwtAb.ll»s to CTR 5475,763 $8.581,940 $29,056-502 399,763,216 561,021,190 0114,9104,611 AdvestW.p Marlulbg & Prornollo. Eape.dlluna (1) 5283,146,412 5734,194,958 01,119,066,1100 SI n31,416,017 54,711,841,581 Yo.A Prevention Eapendilurea(u) Ywb Prevalw. L'apeMllrea Wuurh'11(c) TNaI YwtY Pn~Uw Eapndlt.w f524.556 5810955 SI_L15.311 07q297 CONFIDENTIAL - SUBIEC7 TO MINNESOTA PROTEC77V E ORDER.AND ADDENDUM \ CATEGORY I

ADVERTISING, R&D AND YOUTH PREVENTION ($ Actual) Liggett Research & Development Expenditures (p) $93,499,833 Contibutions to CTR Contibutions to CTR General Fund (b) $721,869 Contributions to CTR Special Projects (b) 144,255 Total Contributions to CTR $866,124 Research & Development Expenditures and Contributions to CTR $94,365,956 Advertising, Marketing & Promotion Expenditures (q) $2,130,329,603 YQuth_PrtYt:ntis2n Expenditures Youth Prevention Expenditures (r) Youth Prevention Expenditures through TI (e) _ 300,344 Total Youth Prevention Expenditures $300,344 Total Domestic Tobacco Sales (1954-1994) $19,999,119,497 Expenditure Comparison (v) Advertising, Marketing & Promotion Expenditures to Total Domestic Tobacco Sales (1954-1994) 10.7% Research & Development Expenditures to Total Domestic Tobacco Sales (1954-1994) 0.5% Research & Development Expenditures and Contributions to CTR to Total Domestic Tobacco Sales (1954-1994) 0.5% Youth Prevention Expenditures to Total Domestic Tobacco Sales (1983-1994) 0.004% Youth Prevention Expenditures to Total Domestic Tobacco Sales (1954-1994) 0.002% Research & Development Expenditures to Advertising, Marketing & Promotion Expenditures (1954-1994) 4.4% Research & Development Expenditures and Contributions to CTR to Advertising, Marketing & Promotion Exp. (1954-1994) 4.4% Youth Prevention Expenditures to Advertising, Marketing & Promotion Expenditures (1983-1994) 0.025% Youth Prevention Expenditures to Advertising, Marketing & Promotion Expenditures (1954-1994) 0.014% 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

ADVERTISING, R&D AND YOUTH PREVENTION ($ Actual) Lorillard Research & Development Expenditures (s) $176,698,918 Contibutions to CTR Contibutions to CTR General Fund (b) $26,563,202 Contributions to CIR Special Projects (b) _ 1,638,491 Total Contributions to CTR $28.201,693 Research & Development Expenditures and Contributions to CTR $204,900,611 Advertising, Marketing & Promotion Expenditures (t) $4,773,843,387 Youth Prevention Expenditures Youth Prevention Expenditures (u) Youth Prevention Expenditures through TI (e) 1,335,511 _ Total Youth Prevention Expenditures $1,335,511 Total Domestic Tobacco Sales (1954-1994) $36,100,505,771 F.xpenditure Comoarison tv) Advertising, Marketing & Promotion Expenditures to Total Domestic Tobacco Sales (1963-1994) 14.6% Research & Development Expenditures to Total Domestic Tobacco Sales (1964-1994) 0.5% Research & Devclopment Expenditures and Contributions to CTR to Total Domestic Tobacco Sales (1964-1994) 0.6°.10 Youth Prevention Expenditures to Total Domestic Tobacco Sales (1983-1994) 0.006% Youth Prevention Expenditures to Total Domestic Tobacco Sales (1954-1994) 0.004% Research & Development Expenditures to Advertising, Marketing & Promotion Expenditures (1964-1994) 3.7% Research & Development Expenditures and Contributions to CTR to Advertising, Marketing & Promotion Exp. (1964-1994) 4.3% Youth Prevention Expenditures to Advertising, Marketing & Promotion Expenditures (1983-1994) 0.041% Youth Prevention Expenditures to Advertising, Marketing & Promotion Expenditures (1954-1994) 0.028% 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

#.rTR f fN 043362

Liggett Advertising, Marketing & Promotion Expenditures to Total Domestic Tobacco Sales (1954-1994) $19,999,119,497 $2,130,329,603 m Total Domestic Tobacco Sales . Advertising, Marketing & Promotion Expenditures 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

Liggett l Research & Development Expenditures to Total Domestic Tobacco Sales (1954-1994) $19,999,119,497 0 Total Domestic Tobacco Sales w Research & Development Expenditures $93,499,833 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

Liggett Research & Development Expenditures and Contributions to CTR to Total Domestic Tobacco Sales (1954-1994) $19,999,119,497 $94,365,956 w Total llomestic ''obacco Sales m Research & Development Expenditures and Contributions to CT R 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

Liggett Youth Prevention Expenditures to Total Domestic Tobacco Sales (1983-1994) $6,923,603,000 m Total Domestic Tobacco Sales m Youth Prevention Expenditures $300,344 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

Liggett f Youth Prevention Expenditures to Total Domestic Tobacco Sales (1954-1994) $19,999,119,497 m Total Domestic Tobacco Sales w Youth Prevention Expenditures $300,344 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

Liggett Research & Development Expenditures to Advertising, Marketing & Promotion Expe;nditures (1954-1994) $2,130,329,603 $93,499,533 w Advertising, Marketing & Promotion Expenditures = Research & Development Expenditures 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

Liggett Research & Development Expenditures and Contributions to CTR to Advertising, Marketing & Promotion Expenditures (1954-1994) $2,130,329,603 $94,365,956 ~ ~ w Advertising, Marketing & Promotion Expenditures w Research & Development Expenditures and Contributions to CTR 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

Liggett Youth Prevention Expenditures to Advertising, Marketing & Promotion Expenditures (1983-1994) $1,202,351,296 N Advertising, Marketing & Promotion Expenditures m Youth Prevention Expenditures $300,344 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PItO"1'ECl'IVE ORDER AND ADDENDUM \ CATEGORY I

^ , Liggett Youth Prevention Expenditures to Advertising, Marketing & Promotion Expenditures (1954-1994) $2,130,329,603 0 Advertising, Marketing & Promotion Expenditures m Youth Prevention Expenditures $300,344 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

CTR MN 043372

Lorillard Advertising, Marketing & Promotion Expenditures to Total Domestic Tobacco Sales (1963-1994) $32,678,131,700 $4,773,843,387 -114 w 07/02/97 . Total Domestic Tobacco Sales w Advertising, Marketing & Promotion Expenditures CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

Lorillard Research & Development Expenditures to Total Domestic Tobacco Sales (1964-1994) $32,161,987,086 w Total Domestic Tobacco Sales m Research & Development Expenditures $176,698,918 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

Lorillard Research & Development Expenditures and Contributions to CTR to Total Domestic Tobacco Sales (1964-1994) $32,161,987,086 $203,891,847 N Total Domestic 1'obacco Sales M Research & Development Expenditures and Contributions to CTR 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

Lorillard Youth Prevention Expenditures to Total Domestic Tobacco Sales (1983-1994) $21,166,365,000 0 Total Domestic Tobacco Sales = Youth Prevention Expenditures $1,335,511 07/02J97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

Lorillard l Youth Prevention Expenditures to Total Domestic Tobacco Sales (1954-1994) ~ .~ ~ $36,100,505,771  Total Domestic Tobacco Sales . Youth Prevention Expenditures 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I $1,335,511

Lorillard Research & Development Expenditures to Advertising, Marketing & Promotion Expenditures (1964-1994) $4,736,076,630 $176,698,918 ~ .~ 0 Advertising, Marketing & Promotion Expenditures m Research & Development Expenditures 07/02/97 CONFIDENTIAL - SUBIECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

Lorillard Rescarch & Development F.xpenditures and Contributions to CIR to Advertising, Marketing.l'• Promotion Rxpenditures (196J-199•1) $4,736,076,630 0 Advertising, Marketing & 1'rolnution Expenditures m Research & Development Expenditures and Contributions to CTR $203,891,847 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

Lorillard Youth Prevention Expenditures to Advertising, Marketing & Promotion Expenditures (1983-1994) $3,238,333,017 0 Advertising, Marketing & Promotion Expenditures w Youth Prevention Expenditures $1,335,511 07/02/97 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I

Lorillard Youth Prevention Expenditures to Advertising, Marketing & Promotion Expenditures (1954-1994) $4,773,843,387 w Advertising, Marketing & Promotion Expenditures = Youth Prevention Expenditures $1,335,511 07/02/97 CONFIDENTIAL - SUE3JECT TO MINNIiSO'1'A 1'RO'i'EC'1'IVE ORDER AND AI)DENI)UM \ CATEGORY 1

CTR HN 043382

r ADVERTISING, R&D AND YOUTH PREVENTION Footnotes: (a) Supplemental Responses uf Philip Morris Incorporated to Plaintiffs' First Setof Intenogatories. Interrogatory No. 18. (b) (c) (d) (e) (I) ~ (g) (b) (i) (j) (k) (q ~""r~" (m) 0 ~ W UL• '..yr Amounts represent total operating expenses of the departments that funded research and developnxnt (including, but not limited to, research relating to smoking and health) at any lime in the period 1962-1994. These figures reflect total operating expenses for all activities and thus include expenditures not related to research. The figures for 1980 and subsequent yean do not include amounts contributed by Philip Morris to CTR; however, because those amounts cuuld not be segregated for years prior to 1980, CTR contributions may be included for some of those prior years. No data provided for the years 1954-1961. Response of the Council for Tobacco Research - U.S.A., Inc. to Plainti(fs' First Set of lnterrogatories. Appendix B. Based on Philip Morris USA Annual Summary of Advertising, Marketing and Promotional Expenditures for the United States 1980-1995 and Supplemental Responses of Philip Morris Incorporated to Plaintiffs' First Set of Interrogatories, Interrogatory Nos. I8 and 21. No data provided for the years 19541968. Philip Morris lncotporateds Second Supplemental Responses to PlaintiII3' First Set of ]nterrogatories. Interrogatory No. 20. No data provided for the years 1954-1989. Tobacco Institute's Objections and Responses to PlaintilTs' First Set of Interrogatories. Interrogatory No. 20. Youth Prevention Expenditures through TI are estimated based on each Company's proportionate annual contribution. Lorillard figures are based on Lorillard Tobacco Company's Responses to Plaintilfs' First Set of Interrogatories. Interrogatory No. 20. Supplemental Response of Defendant R.J. Reynolds Tobacco Company to Interrogatory No. 18 of PlainliRs First Set of Interrogatories. R&D Expenditures were computed as follows: • From 1964 Ihrough 1973, Reynolds contributed approximately S15 milliun to the Education and Research Foundation of dte American Medical Association to support its Project fow Research on Tobacco and Hcaltb. • Reynolds, directly or through its affiliates, made over S53 million in contributions to various researchers outside the company who engaged in basic medical research relating to diseases associated with cigarette smoking. • From 1980 through 1994 amounts represent the total amount spent by Reynolds Research and Developnenl Department for all research from 1980 through 1994. As a result, these figures may include expenditures not related to smoking and health research. • No data provided for the years 1954-1963. Supplemental Response of Defendant R.J. Reynolds Tobacco Company to Interrogatory Nos. 17 and 21 of Plaintiffs' First Set of Interrogatories. Interrogatory No. 21. Beginning in 1975 the FTC required reporting of various categories of promotional expenditures not previously collected. These new categories included expenditures relating to coupons, price discounts and amounts paid to retailers as a'pronaliaul allowance." RJR has deducted,hese amouus from the amuunts provided to the FTC in answering Intertogatory No. 21. The other five manufacturers have not node such a deduction. '17tcreforc. RJR's total expctulilwes f K advettisiug, nmdcting and pnmt,aiau f+r the years 1975 to 1994 have been estimated by subtracting the total amuunls re{wned by the o0hcr five nmudscmren in answer to Intenugatary No 21 fwm the total induxny an%ouul reported in the FTCs Reports to Congress. Response of Defendant R.J. Reynolds Tobacco Cwtpany to 1•laiutills' Fi.st 5et of Intrnogn,wies. Intenogmory No. 20. No data provided for the years 1934-1990. Supplemental Responses to Certain of Plaintilfs• lnterrogatories to Brown & W illiamson Tobacco Corporation. Interrogatory No. 18. R&D Expenditures were coary+uted as follows: • BQeW has produced a document (Document No. 687038566), which reports the following amounts with respect to B&W's'Expetuliture on Research in Respect of Smoking and Heahh', from which B&W excludes CTR. In 1969, B&W had Non-CTR Expenditures of 5585,894. From 1953-1969, BecW had Non-CTR Expenditures of i1,661,294. B&W has estimated its Smoking & Health Related Research from its total Research & Development Expenditures. Therefore, B&W's Research & Development Expenditures . are in actuality its estimated Smoking & Health Related Research Expenditures. Supplemental Responses to Certain of Plaintilfs' Interrogatories to Brown & Williamsml Tobacco Corporation. lutrnugatory No. 21. No dan provided for the years 1954-1957. No data provided. Sixth Supplemental Responses of Brown & W illiamson Tobacco Corporation (Successor by Merger to the American Tobacco Conpany) to Plaintiffs' First Set of Intenoplories Nos. 18-21 Addressed to the American Tobacco Company. Interrogatory No. 18. R&D Expemlitwes werc compmed as follows: • 56.494,604 allocated fnRn January 1, 1943 to Seplcndrer 30, 19W. • SI,718,303 allocaWd frum 1951 to 1956. • 34)'1,6112 al6w.aw! Own 1951 ur 1944. • 5841,243 allocated fium 1957 10 1964. • $2,437,725 allocated from I965-1970. • From 1951-1955, American also contributed 5250,000 to the Damon Runyon Memorial Fund, Inc. • From 1944-1984, Anxrian also contributed $563,416 to various outside researchers for research related to the smoking and health controversy. Amounts from 1972 to 1994 represenl The American Tobacco Company Department of Research and Development total operating expenses, taken from the following bates numbered documents: MNAT00289924-25; MNAT00289897; MNAT00289867; MNAT00289840; MNAT00289799; MNAT00289779; MNAT00289760; ATX040061381; ATX040061229; MNAT005 a 8704; MNAT00501498; ATX040611144M; ATX040611098-103; ATX040699424; ATX040083734; ATX020085662; ATX040084846; ATX7954540080; MNAT00776045-55 These figures reflect total operating expenses for all activities and thus include expenditures not related to research. 07pyy7 CONFIDENTIAI. - SUUGCT TO MINNL•YOTA PROTUCTIVG ORDIdR AND ADDENDUM \ CATE(:ORY I

ADVERTISING, R&D AND YOUTH PREVENTION Foomotes: (n) Sixth Supplemental Responses of Browe & Williamson Tobacco Corporetion (Successor by Merger to the American Tobacco Company) to Plaintiffs First Set of Interrogatories Nos. 18-21 Addressed to the American Tobacco Company (1952-1978). lnterrogatory No. 21. Third Supplemental Responses of Brown & Williansan Tobacco Corporation (Successor by Merger to the American Tobacco Company) to Plaintiffs' First Set of Intertogatories Nos. 18-21 Addressed to the American Tobacco Company (1979-1993). Interrogatory No. 21 American Tobacco has not answered Plaintilfs Inteoogabry No. 21 for the year 1994. It has been assumed that these expenditures for 1994 were at least as great as for 1993. Therefore, the 1993 figure has been used as an estimate of 1994 expenditures. (0) No data provided. (p) Defendant Liggett Group lnc: s First Supplemental Responses to PlaintiRa First Set of Interrogatories. Interrogatory No. I8. Amounts represent: in-house research and development eaperulitures relakd to tobacco & healdt from 1954 to 1978; scicntific and technical research espenditums for the years 1948 to 1965; annual expenditures by Liggett regarding its Research I)eparnnent for tlw fiscal years 1965 to 1994; and payments nude by Liggett to Arthur t). Little. Inc., from 1954 to 1969. ' (q) Liggett Group lnc's Second Supplemenul Responses to Plaintiffs' First Set of Intenogatories. Interrogatory No. 21. (r) No data provided. (s) Lorillard Tobacco Company's Second Supplemental Responses to Plainti(fs' First Set of Interrogatories. Interrogatory No. 18. No data provided for the years 1954-1963. (t) l.orillud Tobacco Company's Second Supplemental Responses to Plaintilfs' First Set of Interrogatories. Interrogatory No. 21. No data provided for the years 1954-1962. (u) No data provided. . (v) Compuiwna are made only for the years for w4ich irdomution has been nuide available. p7pyq7 CONFIDENTIAL - SUBJECT TO MINNESOTA PROTECTIVE ORDER AND ADDENDUM \ CATEGORY I