Devices to Heat Non-Combusted Cigarettes

OMB Control No. 3084-0134
Expires [DATE] 1
UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
COMMISSIONERS:

Lina M. Khan, Chair
Rebecca Kelly Slaughter
Alvaro M. Bedoya
Melissa Holyoak
Andrew Ferguson

File No. P114508
ORDER TO FILE SPECIAL REPORT
Pursuant to a resolution of the Federal Trade Commission dated [ISSUE DATE], entitled
“Resolution Directing Use of Compulsory Process,” a copy of which is enclosed, [COMPANY] is
ordered to file a Special Report with the Commission not later than [RETURN DATE], containing
the information specified herein. Much of the information requested for this report is to be filed
electronically.
Your report is required to be subscribed and sworn to by an official of [COMPANY] who
has prepared or supervised the preparation of the report from books, records, correspondence, and
other data and material in your possession.
Your report should restate each item of this Order with which the corresponding answer is
identified. If any question cannot be answered fully, give such information as is available to you
and explain how and why your answer is incomplete.
Please supply written answers to each of the following requests:
1.
The subscriber to your report is to give his or her full name and business address and state
his or her official capacity.
2.
State the full name of [COMPANY], its official address, and its date and state of
incorporation.
3.

State whether [COMPANY] is a subsidiary company; and if so, identify the full name and

1

For your information, under the Paperwork Reduction Act, as amended, an agency may
not conduct or sponsor, and a person is not required to respond to, a collection of information
unless it displays a currently valid OMB control number. For this information request, that
number is 3084-0134.
1

official address of its ultimate parent company. 2
4.

A.

If [COMPANY] is a subsidiary company, identify all other direct and indirect
subsidiary companies of [COMPANY]’s ultimate parent company, and for each
such subsidiary company: (1) provide its full name and address; (2) identify its
direct parent company and all of its direct subsidiary companies; and (3) state
whether it has any involvement in the manufacturing, labeling, advertising, 3
promotion, marketing, development, offering for sale, sale, or distribution of
cigarettes.

B.

If [COMPANY] is not a subsidiary company, identify all of [COMPANY]’s direct
and indirect subsidiary companies, and for each such subsidiary company: (1)
provide its full name and address; (2) identify its direct parent company and all of
its direct subsidiary companies; and (3) state whether it has any involvement in the
manufacturing, labeling, advertising, promotion, marketing, development, offering
for sale, sale, or distribution of cigarettes.

5.
Report the net (i.e., after accounting for returns) number of cigarettes sold in the United
States by the Company during calendar year [YEAR]. 4 This includes cigarettes given for free to
2

For the purposes of this Order, the term “subsidiary company” shall mean a company that
is controlled by another entity; the term “parent company” shall mean an entity that controls
another company; and the term “ultimate parent company” shall mean the highest level parent
company that is not controlled by another entity.
Furthermore, for purposes of this Order, the term “control” (as used in the terms
“control(s)” and “controlled”) shall mean either holding 50 percent or more of the outstanding
voting securities of an issuer or, in the case of an entity that has no outstanding voting securities,
having the right to 50 percent or more of the profits of the entity, or having the right in the event
of dissolution to 50 percent or more of the assets of the entity.
3

For the purposes of this Order, the term “advertising” refers to all activities relating to
cigarettes that are intended or likely to be seen or heard by members of the public, regardless of
whether they refer or relate to a brand or brands of cigarettes.
4

For the purposes of this Order, the term “the Company” shall mean: [COMPANY]; all
entities identified in response to Questions 3 and 4, above, that have any involvement in the
manufacturing, labeling, advertising, promotion, marketing, development, offering for sale, sale,
or distribution of cigarettes; and all other entities related through common ownership or common
governance that have any involvement in the manufacturing, labeling, advertising, promotion,
marketing, development, offering for sale, sale, or distribution of cigarettes. The term “the
Company” shall not, however, include any entity: (a) whose only involvement in the
manufacturing, labeling, advertising, promotion, marketing, development, offering for sale, sale,
or distribution of cigarettes is as a convenience store, supermarket, gas station, pharmacy, or
other retailer; (b) that sells cigarettes that are not manufactured or imported by the company; and
(c) for which sales of cigarettes and cigarette-related merchandise constitute less than 25% of its
2

retailers for subsequent sale to consumers. Report unit sales in number of cigarettes sold.
6.
Report the net (i.e., after accounting for returns) dollar value of cigarettes sold in the United
States by the Company during calendar year [YEAR]. Report dollar sales value in whole dollars.
7.
Report the net (i.e., after accounting for returns) number of cigarettes given away in the
United States by the Company during calendar year [YEAR]. This should include all cigarettes
distributed for free whether through sampling, coupons for free product, “buy two get one free”
type offers, or otherwise, as long as such cigarettes were not reported as sold in response to
Question 5, above. 5 Report units given away in number of cigarettes given away.
8.
Report separately the dollar amount expended during calendar year [YEAR] by the
Company on cigarette advertising, merchandising, or promotion in the United States in each
category specified in items 5 through 33 of Datafile No. 2. 6 This request is in addition to the

total retail sales.
Furthermore, for the purposes of this Order, the term “United States,” when used in a
geographical sense, includes the 50 states, the District of Columbia, the Commonwealth of
Puerto Rico, the Commonwealth of the Northern Mariana Islands, and the United States
territorial possessions (including Guam, the Virgin Islands, American Samoa, Wake Island,
Midway Islands, Kingman Reef, and Johnston Island).
In addition, for the purposes of this Order, the phrase “sold in the United States” shall
include all sales: (a) within the United States; (b) to members of the Armed Forces of the United
States located outside the United States; or (c) for delivery to a vessel or aircraft of the Armed
Forces of the United States, as supplies, for consumption beyond the jurisdiction of the internal
revenue laws of the United States.
5

For the purposes of this Order, the phrase “given away in the United States” shall include
all cigarettes given away: (a) within the United States; (b) to members of the Armed Forces of
the United States located outside the United States; or (c) for delivery to a vessel or aircraft of
the Armed Forces of the United States, as supplies, for consumption beyond the jurisdiction of
the internal revenue laws of the United States.

6

For the purposes of this Order, the term “cigarette advertising” does not refer to and
should not be construed to include: (a) company or divisional names, when used as such, other
than in an advertisement relating to cigarettes; (b) signs on factories, plants, warehouses and
other facilities related to the manufacture or storage of cigarettes; (c) corporate or financial
reports; (d) communications to security holders of the Company and to others who customarily
receive such communications; (e) employment advertising; or (f) advertisements directed to
underage persons or their parents that are intended to reduce smoking by underage persons.
Furthermore, for the purposes of this Order, the phrase “advertising, merchandising, or
promotion in the United States” shall include all advertising, merchandising, or promotion: (a)
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request for the electronic datafile.
9.

A.

State whether the Company or any other persons working for or on behalf of the
Company paid any money or compensation, or made any other contribution
(including, but not limited to, goods or services, including free cigarettes) in
connection with any production or filming of any motion picture(s), television
show(s) (including scripted, original shows streamed via the Internet), or video
game(s) during calendar year [YEAR]. If so, please identify those show(s),
movie(s), and video game(s) and state the dollar value of each payment or
contribution.

B.

State whether the Company or any other persons working for or on behalf of the
Company paid any money or compensation, or made any other contribution
(including, but not limited to, goods or services, including free cigarettes) during
calendar year [YEAR] to any individual, partnership, or corporation engaged in the
business of product placement in motion pictures, television shows (including
scripted, original shows streamed via the Internet), or video games. If so, please
identify: the person who made the payment or contribution; the recipient of the
payment or contribution; the nature and amount of the payment or contribution; and
the name of each and every motion picture, television show, and video game in
which any of the Company’s cigarette products or cigarette brand imagery appeared
in return for such payment or contribution.

C.

State whether the Company or any other persons working for or on behalf of the
Company sought or solicited the appearance of any cigarette product or any
cigarette brand imagery in any motion picture(s), television show(s) (including
scripted, original shows streamed via the Internet), or video game(s) during calendar
year [YEAR]. If so, please identify those show(s), movie(s), and video game(s).

D.

State whether the Company or any other persons working for or on behalf of the
Company granted approval or otherwise gave permission for the appearance of any
cigarette product or any cigarette brand imagery in any motion picture(s), television
show(s) (including scripted, original shows streamed via the Internet), or video
game(s) during calendar year [YEAR]. If so, please state which show(s), movie(s),
and video game(s).

E.

State whether the Company or any other persons working for or on behalf of the
Company sought or solicited the appearance of any cigarette product or any
cigarette brand imagery, or granted approval or otherwise gave permission for the
appearance of any cigarette product or any cigarette brand imagery, in any video
appearing on the Internet, including, but not limited to, sites providing usergenerated content, during calendar year [YEAR]. If so, please provide the name of
the video(s), the name of the site on which the video(s) appeared, and the Uniform

within the United States; or (b) to members of the Armed Forces of the United States.
4

Resource Locator (“URL”) for each video.
F.

State whether the Company or any other persons working for or on behalf of the
Company engaged in social media marketing that promoted any cigarette brand or
variety, 7 or that used any cigarette brand imagery, in calendar year [YEAR]. If so,
please identify each type of social media marketing used, including, but not limited
to, social networking sites, microblogging sites, content-sharing sites, and blogs.

10.
To the extent that such information is possessed by the Company or any other persons
working for or on behalf of the Company, identify each and every televised event that was aired in
calendar year [YEAR] during which the name, logo, or an image of any portion of the package of
any brand or variety of cigarettes sold by the Company appeared on television through televised
coverage of sponsored events, teams, or individuals.
11.
Report the dollar amount expended during calendar year [YEAR] by the Company in the
United States on advertisements directed to underage persons or their parents that were intended to
reduce smoking by underage persons. 8
12.
State whether the Company sold heated, non-combusted cigarettes (“heated cigarettes”)
during calendar year [YEAR] and if so, report, for the calendar year, the net (i.e., after accounting
for returns) number of heating devices designed to be used with heated cigarettes that were sold in
the United States by the Company, the net dollar value of such devices sold, the net number of such
devices that were given away in the United States by the Company, and the total amount expended
on the advertising, merchandising, or promotion in the United States of such devices by the
Company that was not reported in response to item 8 above.
For items 5-12 above, if the responsive information exists only within subsidiaries, it is permissible
to submit separate reports from each subsidiary with responsive information subscribed and sworn
to by an official of each subsidiary, who has prepared or supervised the preparation of the report
from books, records, correspondence, and other data and material in its possession. In such case,
an official of [COMPANY] still must submit a report subscribing and swearing that the
subsidiaries’ reports submitted constitute all relevant information for [COMPANY] and its
subsidiaries, and that no contrary information exists. The written report or reports should be
submitted as .pdf files and must include the signature(s) of the above-referenced official(s)
attesting to the accuracy of the Company’s report.
INSTRUCTIONS FOR COMPLETING THE CIGARETTE REPORT DATAFILES
The Commission requests that information be produced by the Company in spreadsheet
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codes.

For purposes of this Order, the term “variety” refers to cigarettes that have different UPC

8

For purposes of this Order, “underage persons” means persons younger than twenty-one
years of age.
5

format (readable by Microsoft Excel).
The Commission is requesting that sales data and data on cigarette advertising,
merchandising, or promotion in the United States be reported in two separate datafiles. The
instructions below provide detailed information on how to complete the two datafiles.
DATAFILE NO. 1
INSTRUCTIONS FOR COMPLETING DATAFILE NO. 1:
Sales data and certain other information are to be reported in Datafile No. 1 separately for
each variety of cigarettes produced by the Company. For Datafile No. 1, the Commission is
requesting data at the variety level, rather than at the brand level. 9
FIELD DEFINITIONS FOR DATAFILE NO. 1
Datafile No. 1 contains 16 fields of data. The first three fields are used to create a unique
identifier for each variety of cigarette. Please note the field names (in CAPS) cited below and use
them as written for the Company’s submissions.
1.
YEAR (Year): Numeric field. Refers to the calendar year for which information is being
reported. Entered as “202X.”
2.

COMPCODE (Company Code): Character field. Enter letter assigned for the Company:
Vector Group
Altria Group
Reynolds American
ITG Holdings

C
E
F
G

3.
UPC-CODE: Numeric value, enter industry standard bar-code value for product as printed
on the pack.
The next eight fields include the brand name and certain physical characteristics of the
variety. Please enter all letters that appear in alphanumeric character fields using only capital
letters.
4.
BRANDNO (Brand number): Numeric field. Entered as values 01 to 99. Enter previously
assigned number for existing brands. If new brand or previously unassigned, assign the next
unused integer.
5.

BRAND-NAME (Brand name): Character field. Refers to the brand identified on the

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Thus, a brand with one variety will have just one record, which will be specific to that
variety; a brand with 20 varieties will have 20 records.
6

cigarette pack. If the product is a generic or private label cigarette, indicate “GENERIC” and
complete a separate record for each distinct variety.
6.
CR-LENGTH (Marketing description of length): Character field. This field can contain a
number or term.
7.

CR-FILTER (Marketing description of filter): Character field.

8.

CR-FLAVOR (Marketing description of cigarette flavoring): Character field.

9.
CIGLENGTH (Cigarette length in millimeters): Numeric field. Three digits. Enter
cigarette length in millimeters.
10.

FILCODE (Filter code): Character field. Enter “F” for filtered or “N” for non-filtered.

11.
FLAVOR (Flavoring): Character field. Enter “M” for menthol, “N” for non-flavored, “O”
for other flavored.
12.
COOLING-AGENT (Flavorless synthetic cooling agent): Character field. Enter “Y” for it
contains any flavorless, synthetic, cooling agent, “N” for it does not contain any such agent.
13.
COMBUSTED (Combusted): Character field. Enter “Y” for traditional cigarettes that are
combusted. Enter “N” for heated cigarettes.
The next three fields are used to record the net number of units of the variety that were sold,
the net number of units that were given away, and the dollar value of the net number of units sold.
14.
VARUNITSSOLD (Variety units sold): Numeric field. Report one figure for the number
of cigarettes of this variety sold in the United States during calendar year [YEAR], net of the
number of cigarettes of this variety that were returned. Include cigarettes given away to retailers
for subsequent sale to consumers.
15.
VARUNITSGIVEN (Variety units given away): Numeric field. Report one figure for the
number of cigarettes of this variety given away in the United States during calendar year [YEAR],
net of the number of cigarettes of this variety that were returned.
16.
VARSALES (Variety-sales): Numeric field. Report one figure for the dollar value of
cigarettes of this variety sold in the United States during calendar year [YEAR], net of the value of
cigarettes of this variety that were returned.
DATAFILE NO. 2
INSTRUCTIONS FOR COMPLETING DATAFILE NO. 2
The next 33 fields are used to record expenditures on cigarette advertising, merchandising,
or promotion in the United States for the specific categories requested by the FTC. Please provide
7

information for items 5-33 in thousands of dollars. Expenditures may be rounded to the nearest
thousand dollars. For example, $1,234,567 should be reported as either 1234.567 or 1235, not as
1234567.
The Commission is requesting that expenditures on cigarette advertising, merchandising, or
promotion in the United States be reported only at the brand level, rather than at the variety level.
The Commission is also requesting that expenditures on cigarette advertising,
merchandising, or promotion in the United States that are not attributable to or in connection with
any specific brand of cigarettes be reported in a “non-brand specific” record. Examples of such
expenditures might include, among others, Category A expenses advertising or promoting all
cigarettes generally or all of the Company’s cigarettes but not any specific brand of cigarettes and
Category W expenses.
To the extent practicable, third-party agency fees relating to cigarette advertising,
merchandising, or promotion in the United States should be reported in the categories of
advertising or promotion to which those fees relate. For example, agency fees related to magazine
advertising should be reported in Category B, agency fees related to point-of-sale advertising
should be reported in Category F, and agency fees related to advertising on any Company web site
should be reported in Category W. To the extent that third-party agency fees relating to cigarette
advertising, merchandising, or promotion in the United States cannot be divided based on the
materials to which they relate, they should be reported in Category AA.
FIELD DEFINITIONS FOR DATAFILE NO. 2
1.
YEAR (Year): Numeric field. Refers to the calendar year for which information is being
reported. Entered as “202X.”
2.

COMPCODE (Company Code): Character field. Enter letter assigned for the Company:
Vector Group
Altria Group
Reynolds American
ITG Holdings

C
E
F
G

3.
BRANDNO (Brand number): Numeric field. Entered as values 01 to 99. Enter previously
assigned number for existing brands. If new brand or previously unassigned, assign the next
unused integer. For the “Non-brand specific” record, enter the value 99.
4.
BRAND-NAME (Brand name): Character field. Refers to the brand identified in
advertising. If the product is a generic or private label cigarette, indicate “GENERIC.”
5.
CAT-A-EXP (Category-A Expenses): Newspaper advertising but excluding, if practicable,
those expenditures covered by Categories L through V, which should be reported in those
categories.

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6.
CAT-B-EXP (Category-B Expenses): Magazine advertising but excluding, if practicable,
those expenditures covered by Categories L through V, which should be reported in those
categories.
7.
CAT-C-EXP (Category-C Expenses): Outdoor advertising but excluding, if practicable,
those expenditures covered by Categories L through V, which should be reported in those
categories. “Outdoor advertising” means: (a) billboards; (b) signs and placards in arenas,
stadiums, and shopping malls, whether any of the foregoing are open-air or enclosed; and (c) any
other advertisements placed outdoors, regardless of their size, including those on cigarette retailer
property.
8.
CAT-D-EXP (Category-D Expenses): All expenditures for audio-visual or video
advertising on any medium of electronic communication not subject to the jurisdiction of the
Federal Communications Commission. This category includes, but is not limited to,
advertisements on: screens at motion picture theaters, television screens or monitors in residential
dwellings, as in certain televised programs and through video cassette or DVD entertainment
products; and television screens or monitors in commercial establishments, such as video arcades.
This category does not include expenditures for advertising on the Internet, which should be
reported in Category W or Category X below.
9.
CAT-E-EXP (Category-E Expenses): Direct-mail advertising but excluding, if practicable,
those expenditures covered by Categories L through V or Category X, which should be reported in
those categories.
10.
CAT-F-EXP (Category-F Expenses): Point-of-sale advertising, that is materials displayed
or distributed at a retail location, but excluding, if practicable, those expenditures covered by
Category C or Categories L through V, which should be reported in those categories.
11.
CAT-G-EXP (Category-G Expenses): Price discounts paid to cigarette retailers in order to
reduce the price of cigarettes to consumers, including off-invoice discounts, buy downs, voluntary
price reductions, and trade programs, but excluding retail-value-added expenditures for promotions
involving free cigarettes (e.g., buy two, get one free) covered by Category U and expenditures
involving coupons covered by Category T, which should be reported in those categories.
12.
CAT-H-EXP (Category-H Expenses): Price discounts paid to cigarette wholesalers in order
to reduce the price of cigarettes to consumers, including off-invoice discounts, buy downs,
voluntary price reductions, and trade programs, but excluding retail-value-added expenditures for
promotions involving free cigarettes (e.g., buy two, get one free) covered by Category U and
expenditures involving coupons covered by Category T, which should be reported in those
categories.
13.
CAT-I-EXP (Category-I Expenses): Promotional allowances paid to cigarette retailers in
order to facilitate the sale or placement of any cigarette, including payments for stocking, shelving,
displaying, and merchandising brands, volume rebates, incentive payments, and the cost of
cigarettes given to retailers for free for subsequent sale to consumers, but excluding, if practicable,
those expenditures covered by Categories A through H, which should be reported in those
9

categories.
14.
CAT-J-EXP (Category-J Expenses): Promotional allowances paid to cigarette wholesalers
in order to facilitate the sale or placement of any cigarette, including payments for volume rebates,
incentive payments, value-added services, promotional execution, and satisfaction of reporting
requirements but excluding, if practicable, those expenditures covered by Categories A through I,
which should be reported in those categories.
15.
CAT-K-EXP (Category-K Expenses): Promotional allowances paid to any persons other
than retailers, wholesalers, and full-time company employees involved in the cigarette distribution
and sales process in order to facilitate the sale or placement of any cigarette but excluding, if
practicable, those expenditures covered by Categories A through J, which should be reported in
those categories.
16.
CAT-L-EXP (Category-L-Expenses): Sampling of cigarettes, including the costs of the
cigarettes themselves, all associated excise taxes and increased costs under the Master Settlement
Agreement, and the costs of organizing, promoting, and conducting sampling. Sampling includes
the distribution of cigarettes for consumer testing or evaluation when consumers are able to smoke
the cigarettes outside of a facility owned or operated by the Company or its agents, but the cost of
actual clinical testing or market research associated with such cigarette distributions should not be
reported. Coupons distributed for free cigarettes, with no purchase or payment required to obtain
the coupons or cigarettes, should be reported in this category. When reporting expenses associated
with such coupons for free cigarettes, the value reported should include: (a) the total redemption
expense (including expenses for payments to retailers or vendors for processing) for such coupons
in the calendar year, as determined under Generally Accepted Accounting Principles; and (b) all
other costs associated with such coupons incurred in the calendar year, including, but not limited
to, costs associated with advertising, promotion, design, printing, and distribution.
17.
CAT-M-EXP (Category-M Expenses): All costs of consumer engagement at cigarette retail
locations open to underage persons, including any third-party agency fees, but excluding the cost of
coupons distributed in the course of consumer-engagement activities. When such activities are
combined with the distribution of coupons for the reduction of the retail cost of cigarettes, the
expenditures associated with those coupons should be reported solely in Category T. When such
activities are combined with the distribution of coupons for free cigarettes, with no purchase or
payment required to obtain the coupons or cigarettes, the expenditures associated with those
coupons should be reported solely in Category L.
18.
CAT-N-EXP (Category-N Expenses): All costs of distributing any items (other than
cigarettes, items the sole function of which is to advertise or promote cigarettes, or written or
electronic publications) in connection with the marketing or promotion of cigarettes, whether
distributed by sale, redemption of coupons, or otherwise, that do not bear the name, logo, or an
image of any portion of the package of any brand or variety of cigarettes sold by the Company.
The expenditures reported in this category should be the net cost to the Company, i.e., payments
received from consumers for such items should be deducted. When such activities are combined
with cigarette sampling, the expenditures connected therewith should be reported solely in
Category L. When such activities are combined with the sale of cigarettes, such as when a
10

non-cigarette item is blister-packed to a package or packages of cigarettes, the expenditures
connected therewith should be reported solely in Category V.
19.
CAT-O-EXP (Category-O Expenses): Public entertainment events bearing or otherwise
displaying the name or logo or an image of any portion of the package of any of the Company’s
cigarettes or otherwise referring or relating to cigarettes, that take place in an adult-only facility. 10
Such events must include entertainment, as opposed to simply consumer engagement. This item
includes all expenditures made by the Company in promoting or sponsoring such events. When
such activities are combined with consumer engagement in adult-only facilities, the expenditures
connected with consumer engagement should be reported solely in Category Q.
20.
CAT-P-EXP (Category-P Expenses): Public entertainment events (including, but not
limited to, concerts and sporting events) bearing or otherwise displaying the name, logo, or an
image of any portion of the package of any of the Company’s cigarettes or otherwise referring or
relating to cigarettes, that do not take place in an adult-only facility. Such events must include
entertainment, as opposed to simply consumer engagement. This item includes all expenditures
made by the Company in promoting or sponsoring such events.
21.
CAT-Q-EXP (Category-Q Expenses): All costs of consumer engagement of smokers in
adult-only facilities, including any third-party agency fees, but excluding the cost of coupons
distributed. When such activities are combined with the distribution of coupons for the reduction
of the retail cost of cigarettes, the expenditures associated with those coupons should be reported
solely in Category T. When such activities are combined with the distribution of coupons for free
cigarettes, with no purchase or payment required to obtain the coupons or cigarettes, the
expenditures associated with those coupons should be reported solely in Category L.
22.
CAT-R-EXP (Category-R Expenses): Endorsements, testimonials, and product placement.
This item includes, but is not limited to, all expenditures made to procure cigarette use, or to
procure the mention of a cigarette product or company name, or the appearance of a cigarette
product or name, logo, or package, in any situation (e.g., motion picture, television show or
program, video game, stage show, or public appearance by a celebrity) where such use, mention, or
appearance may come to the attention of the public.
23.
CAT-S-EXP (Category-S Expenses): Sponsorship of sports teams or individual athletes but
excluding, if practicable, those expenditures covered by Category R, which should be reported in
that category. “Sports teams or individual athletes” includes, but is not limited to, competitors in
football, basketball, baseball, hockey, tennis, wrestling, karate, judo, weight lifting, volleyball,
skiing, skating, sailing, boating, equestrian, rodeo, automobile, race car, funny car, motorcycle,

10

For the purposes of this Order, the term “adult-only facility” means a facility or restricted
area (whether open-air or enclosed) where the operator ensures or has a reasonable basis to believe
that no underage person is present. A facility or restricted area need not be permanently restricted
to adults in order to constitute an adult-only facility, provided that the operator ensures or has a
reasonable basis to believe that no underage person is present during the event or time period in
question.
11

bicycle, truck, monster truck, tractor-pull, fishing, or hunting events, competitions, tournaments, or
races.
24.
CAT-T-EXP (Category-T Expenses): All expenditures and costs associated with coupons
for the reduction of the retail cost of cigarettes (whether distributed in person, by mail, online, or
otherwise and whether redeemed at the point of sale, by mail, online, or otherwise), including: (a)
the total redemption expense (including expenses for payments to retailers or vendors for
processing) for such coupons in the calendar year, as determined under Generally Accepted
Accounting Principles; and (b) all other costs associated with such coupons incurred in the calendar
year, including, but not limited to, costs associated with advertising, promotion, design, printing,
and distribution. Coupons distributed for free cigarettes, with no purchase or payment required to
obtain the coupons or cigarettes, should be reported in Category L. Redemption costs should
include any payments to retailers above the face value of the coupons.
25.
CAT-U-EXP (Category-U Expenses): Retail-value-added expenditures for promotions
involving free cigarettes (e.g., buy two, get one free), whether or not the free cigarettes are
physically bundled together with the purchased cigarettes, including all expenditures and costs
associated with the value added to the purchase of cigarettes (e.g., all associated excise taxes paid
on the free cigarettes and any increased costs under the Master Settlement Agreement resulting
from the distribution of the free cigarettes).
26.
CAT-V-EXP (Category-V Expenses): Retail-value-added expenditures for promotions
involving free or discounted non-cigarette product (e.g., buy two, get a free lighter or buy two, save
20 cents per gallon of gasoline), including all expenditures and costs associated with the value
added to the purchase of cigarettes.
27.
CAT-W-EXP (Category-W Expenses): All expenditures for advertising on any Company
Internet web site that can be accessed by computers located in the United States, regardless of
where the site is located or the Internet address of the site or page. This category includes, but is
not limited to, expenditures for cigarette brand web sites.
28.
CAT-X-EXP (Category-X Expenses): All expenditures for advertising on the Internet,
other than on the Company’s own Internet web sites, including, but not limited to, the World Wide
Web, commercial online services, and electronic mail messages, but excluding, if practicable, those
expenditures covered by Category Z, which should be reported in that category. This category
includes but is not limited to: spending on all Internet sites and pages, hyperlinks and banners on
third-party sites, newsgroups, and online advertisements that can be accessed by computers located
in the United States, regardless of where the site is located or the Internet address of the site or
page; all direct-mail advertising using electronic mail messages; and all sites and pages, hyperlinks
and banners on third-party sites, newsgroups, or electronic mail messages that include the name,
logo, symbol, motto, or selling message of a brand of cigarettes, or are referred to in any other
cigarette advertising, regardless of whether the site, page, hyperlink, banner, or electronic mail
message is promoting the sale of cigarettes. Expenditures include, but are not limited to, the cost
of developing, creating, maintaining, monitoring, and updating the site, page, banner, or other form
of online advertising, whether located on systems maintained by the Company or by third-party
advertisers, commercial online services, or Internet World Wide Web host providers.
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29.
CAT-Y-EXP (Category-Y Expenses): All expenditures for telephone advertising. This
category includes, but is not limited to, costs associated with the placement of telemarketing calls
or the maintenance or operation of incoming telephone lines that allow consumers to participate in
any promotion or hear pre-recorded product messages, but excludes costs associated with having
customer-service representatives available for responding to consumer complaints or questions.
30.
CAT-Z-EXP (Category-Z Expenses): All expenditures for social media marketing on web
sites or other online services or communities, including, but not limited to, social networking sites,
microblogging sites, content-sharing sites, and blogs.
31.
CAT-AA-EXP (Category-AA Expenses): Any advertising or promotional expenditures not
covered by another reporting category. Specify the total amount on the written report and briefly
describe the specific subject matter of each such expenditure.
32.
TOT-ADV-EXP (Total Reportable Expenditures): Reportable expenditures for the brand as
defined in the explanatory notes. The figure provided for total reportable expenditures should
equal the sum of the expenses listed in Categories A through AA for the brand.
33.
SPORTS-EXP (Sports and Sporting Events): Report all advertising and promotional
expenditures connected with or related to sports or sporting events, including, but not limited to:
(a) the sponsoring, advertising, or promotion of sports or sporting events, including any racing or
automotive events, support of an individual, group, sports, or racing team, and purchase of or
support for sports or racing equipment, uniforms, sports or racing facilities and or training
facilities; (b) all expenditures for advertising including, but not limited to, print, television, radio,
billboards, banners, etc., in the name of the Company or any of its cigarette brands in a sports or
racing facility, on a scoreboard, or in conjunction with the reporting of sports or racing results; (c)
all expenditures connected with the production, offer, sale, or provision without fee of all
functional promotional items at or in connection with a sporting or racing event, including, but not
limited to, clothing, hats, bags, posters, sporting or racing goods, and equipment; (d) all
expenditures associated with cigarette sampling or consumer engagement in connection with a
sporting event, including sampling or consumer engagement in an adult-only facility on the
grounds or in the parking lot of a sports facility; (e) all expenses relating to a sweepstakes or
contest focused on sports or sporting events (e.g., a trip to the Super Bowl, tickets to NASCAR, or
a fishing trip), including the promotion of the sweepstakes or contest itself; and (f) all expenses for
sports-related or sporting event-related prizes awarded in sweepstakes or contests that are not
focused on sports or sporting events, but not cost of promoting the sweepstakes or contest itself.
The expenditures reported in this category are intended to be duplicative of expenditures listed
above on lines 5-31 and totaled on line 32. Do not report any expenditures on this line that have
not also been reported on lines 5-32. For example, sponsorship of a sporting event that is reported
on line 20 would also be reported on line 33; and a miscellaneous expenditure for sponsoring a
sports or racing team would be reported on lines 23 and 33. “Sports and sporting events” include,
but are not limited to, football, basketball, baseball, hockey, tennis, wrestling, karate, judo, weight
lifting, volleyball, skiing, skating, sailing, boating, equestrian, rodeo, automobile, race car, funny
car, motorcycle, bicycle, truck, monster truck, tractor-pull, fishing, or hunting events, competitions,
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tournaments, or races.
OTHER EXPLANATORY NOTES FOR DATAFILE NO. 2
Expenditures on lines 5-31 should be included in only one category, except for any amounts
also reported on line 33 (sports). Reportable expenditures (lines 5-31) should equal the total on
line 32, and should equal the total cost to the Company of administering the activity involved,
including commissions and other payments made to separate organizations, such as advertising
agencies. In addition, expenditures reported on lines 5-33 should include all expenditures for
advertising and promotion relating to cigarettes, regardless of whether the advertising or promotion
would constitute “commercial speech” or would be protected from law enforcement action by the
First Amendment. However, such expenditures should not include the costs of employing full-time
employees of the Company or any overhead expenses attributable to the activities of such company
employees.
The financial accounting procedure to be used in assigning an expenditure to a particular
calendar year should be the accrual rather than the cash basis method of accounting.
You are advised that penalties may be imposed under applicable provisions of federal law
for failure to file special reports or for filing false reports.
The Special Report called for in this Order is to be filed on or before [RETURN DATE].
By direction of the Commission.

_____________________________________
Lina M. Khan, Chair

SEAL
[ISSUE DATE]

The Report required by this Order, or any inquiry concerning it, should be addressed to:
Michael Ostheimer
Federal Trade Commission
Division of Advertising Practices
600 Pennsylvania Avenue, N.W., Mailstop CC-5201
Washington, D.C. 20580
mostheimer@ftc.gov

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