``The settlement agreement is proof that responsible people can find areas of common agreement and work together in a constructive manner,'' said Ellen Merlo, Senior Vice President, Corporate Affairs for Philip Morris USA. Most of the changes the agreement calls for, including the removal of all billboard and transit advertising, have already been implemented, and now funds from last year's tobacco settlement will be released to states that have given final approval to the agreement. These states are scheduled to receive their first settlement payments shortly. State legislatures across the country have been actively debating how to best spend their funds. In the spirit of the Master Settlement Agreement, Philip Morris USA is actively supporting efforts to dedicate settlement funds to youth smoking prevention efforts. ``We are pleased that the settlement funds will soon be on their way to the states, many of which have already taken steps to fund comprehensive programs to prevent youth smoking.'' said Merlo. ``We hope that legislators in each state will devote a significant portion of their settlement funds to pay for a comprehensive state program to reduce the use of, and access to, tobacco products by minors.'' ``Our company believes the settlement provides an unprecedented opportunity to design and implement programs that can have a positive impact on reducing the incidence of youth smoking,'' said Merlo. Most experts agree that a comprehensive effort should include advertising campaigns, educational programs in schools, community-based programs that promote positive youth development, and enhanced access prevention and enforcement efforts. Philip Morris USA hopes that a comprehensive state plan will also provide for tracking of youth smoking incidence over the years and will measure the effectiveness of youth smoking prevention programs. Philip Morris USA makes these recommendations in the spirit of cooperation as the company enhances its own efforts to help prevent youth smoking. In 1998, Philip Morris USA created a Youth Smoking Prevention department whose sole goal is to develop and support programs to help reduce the incidence of youth smoking. In 1999 and 2000 the Company has voluntarily devoted more than $100 million each year to a substantive and long-term effort that will combine Communication, Education, Community Action and Access Prevention initiatives. ``Philip Morris USA is committed to taking responsible action on this issue, just as we are sincerely committed to full compliance to both the spirit and the letter of the Master Settlement Agreement,'' said Ellen Merlo. ``To that end, we will continue to work with all those who are responsibly committed to achieving a measurable reduction in youth smoking.''

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