Altria Group Inc.
10/30/2025 | Press release | Distributed by Public on 10/30/2025 05:22
Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations
The following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") should be read in conjunction with the other sections in this Quarterly Report on Form 10-Q ("Form 10-Q"), including our condensed consolidated financial statements and related notes contained in Item 1. Financial Statements of this Form 10-Q ("Item 1"). All references to "Notes" in this MD&A are to Notes to our condensed consolidated financial statements in Item 1. When used in this Form 10-Q, the terms "Altria," "we," "us" and "our" refer to either (i) Altria Group, Inc. and its consolidated subsidiaries or (ii) Altria Group, Inc. only and not its consolidated subsidiaries, as appropriate in the context.
In this MD&A section, we refer to the following "adjusted" financial measures: adjusted operating companies income (loss) ("OCI"); adjusted OCI margins; adjusted net earnings; adjusted diluted earnings per share ("EPS"); and adjusted effective tax rates. We also refer to the ratio of debt-to-Consolidated EBITDA (earnings before interest, taxes, depreciation and amortization, as defined in our credit agreement, which includes certain adjustments). These financial measures are not required by, or calculated in accordance with, United States generally accepted accounting principles ("GAAP") and may not be calculated the same as similarly titled measures used by other companies. These financial measures should thus be considered
as supplemental in nature and not considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP. For a further description of these non-GAAP financial measures, see the Non-GAAP Financial Measuressection below.
Executive Summary
Our Business
We have a leading portfolio of tobacco products for U.S. tobacco consumers age 21+. We are Moving Beyond Smoking™, by responsibly transitioning adult smokers to a smoke-free future, competing vigorously for existing smoke-free adult nicotine consumers and exploring new growth opportunities - beyond the United States and beyond nicotine ("Vision"). We previously established our 2028 Enterprise Goals ("2028 Goals") to provide our investors with specific metrics to measure our progress as we execute on our Vision. For further discussion of our 2028 Goals, see our Annual Report on Form 10-K for the year ended December 31, 2024 ("2024 Form 10-K").
Our wholly owned subsidiaries include leading manufacturers of both combustible and smoke-free products. In combustibles, we own Philip Morris USA Inc. ("PM USA"), the most profitable U.S. cigarette manufacturer, and John Middleton Co. ("Middleton"), a leading U.S. cigar manufacturer.
In smoke-free products, we own U.S. Smokeless Tobacco Company LLC ("USSTC"), the leading global moist smokeless tobacco ("MST") manufacturer, Helix Innovations LLC ("Helix"), a leading manufacturer of oral nicotine pouches, and NJOY, LLC ("NJOY"), a manufacturer of tobacco and menthol e-vapor products covered by marketing granted orders ("MGO") from the U.S. Food and Drug Administration ("FDA"). Additionally, we have a majority-owned joint venture, Horizon Innovations LLC ("Horizon"), for the U.S. marketing and commercialization of heated tobacco stick products. As of the date of this Form 10-Q, Horizon had no products in the U.S. marketplace.
The brand portfolios of our operating companies include Marlboro, Black & Mild, Copenhagen, Skoal, on!and NJOY. Trademarks related to Altria referenced in this Form 10-Q are the property of Altria or our subsidiaries or are used with permission.
Our investments in equity securities include Anheuser-Busch InBev SA/NV ("ABI"), the world's largest brewer, and Cronos Group Inc. ("Cronos"), a leading Canadian cannabinoid company.
Trends and Developments
In this section of MD&A, we discuss certain factors that have impacted our businesses as of the date of this Form 10-Q. In addition, we are aware of and address certain trends and developments that could, individually or in the aggregate, have a material impact on our businesses, including the value of our investments in equity securities, in the future. In this section, we focus on the discretionary income pressures on adult tobacco consumers, tariffs, evolving consumer preferences and illicit flavored disposable e-vapor products. Other trends and developments are discussed elsewhere in this MD&A.
During the first three quarters of 2025, U.S. adult tobacco consumers continued to experience inflationary pressures on discretionary income, with lower-income consumers being particularly affected. Inflation remained a persistent concern, staying above the Federal Reserve's 2% target. Persistently high prices for essentials such as groceries and housing continued to constrain consumer spending, with low-income earners increasingly cutting back and relying more on credit. Gas prices continued to trend downward as expected despite marginal increases in the third quarter with the average price of gas remaining above $3.00 per gallon. Tariffs introduced earlier in 2025 have steadily increased over the past several months, weighing on consumer confidence and contributing to ongoing headwinds for discretionary spending. While we have not observed a material impact on adult tobacco consumer purchasing behavior as a result of tariffs, we continue to closely monitor the additional pressure that tariff-related price increases may exert. In addition, we are monitoring other effects of tariffs on our businesses, including the price, availability and quality of raw materials and ingredients, and component parts for production. We do not expect higher tariffs to have a material impact on our costs in 2025 based on presently available information on tariffs.
Overall discretionary income pressures on adult tobacco consumers have resulted in increased discount brand share performance and evolving adult tobacco consumer preferences, each of which have negatively impacted the sales volumes of our companies' premium brands. For the third quarter of 2025, the discount share of the cigarette category reached 32.2%, an increase of 2.4 share points versus the third quarter of 2024. Additionally, we believe that a significant number of adult tobacco consumers switch among tobacco categories, use multiple forms of tobacco products and try innovative tobacco products, such as e-vapor products and oral nicotine pouches. We estimate that, when adjusted for trade inventory movements, calendar differences and other factors, total estimated domestic cigarette industry volume declined by 8% in the third quarter of 2025 versus the third quarter of 2024. When adjusted for trade inventory movements and calendar differences, PM USA's domestic cigarette shipment volume declined by an estimated 9% in the third quarter of 2025 versus the third quarter of 2024. In addition, the U.S. nicotine pouch category continued to grow throughout the third quarter of 2025 to 55.7% of the U.S. oral tobacco category, an increase of 11.1 share points versus the third quarter of 2024. As innovative smoke-free products evolve
to better address the preferences of adult tobacco consumers, these consumers continue to transition from cigarettes and MST products to innovative smoke-free tobacco products, which has negatively impacted the sales volumes of our companies' cigarette and MST products.
Product assortment, regulation and enforcement continue to evolve in the e-vapor category. Flavored disposable e-vapor products have continued driving growth in the e-vapor category. We estimate that flavored disposable e-vapor products, the majority of which we believe have evaded the regulatory process, represent more than 60% of the e-vapor category. In response to the proliferation of illicit flavored disposable e-vapor products, states and the federal government have taken various regulatory and enforcement actions. For example, the FDA and Customs and Border Protection have made it more difficult to import properly declared illicit e-vapor products, seized unauthorized vapor products and issued warning letters to importers. However, although the FDA, in conjunction with other federal entities, has increased enforcement activity, insufficient actions against manufacturers, distributors and retailers of tobacco products requiring FDA review for which no premarket tobacco product applications ("PMTA") have been submitted have allowed such products to continue to proliferate in the market.
Additionally, we continue to see increased illicit activity across multiple tobacco categories, including nicotine pouch products and cigarettes. Throughout 2024 and the first three quarters of 2025, various synthetic oral nicotine pouch products emerged in traditional tobacco retailers. We continue to track the overall dynamics across multiple tobacco categories as well as competitive threats to our brands.
See Operating Results by Business Segment - Business Environmentfor additional information on the trends and developments discussed above.
The trends and developments above have not had a material adverse impact on our results of operations, cash flows or financial position or our ability to achieve our Vision. As the trends and developments evolve and new ones emerge, we will continue to evaluate the potential impacts on our businesses, investments and Vision.
Consolidated Results of Operations for the Nine Months Ended September 30, 2025
The changes in net earnings and diluted EPS for the nine months ended September 30, 2025, from the nine months ended September 30, 2024, were due primarily to the following:
| (in millions, except per share data) | Net Earnings | Diluted EPS | |||||||||
|
For the nine months ended September 30, 2024
|
$ | 8,225 | $ | 4.75 | |||||||
|
2024 NPM Adjustment Items
|
(20) | (0.01) | |||||||||
|
2024 Acquisition and disposition-related items
|
(1,849) | (1.07) | |||||||||
| 2024 Asset impairment, exit and implementation costs | 264 | 0.15 | |||||||||
|
2024 Tobacco and health and certain other litigation items
|
68 | 0.04 | |||||||||
|
2024 Amortization of intangibles
|
85 | 0.05 | |||||||||
|
2024 ABI-related special items
|
(30) | (0.01) | |||||||||
|
2024 Cronos-related special items
|
20 | 0.01 | |||||||||
|
2024 Income tax items
|
(41) | (0.02) | |||||||||
|
Subtotal 2024 special items (1)
|
(1,503) | (0.86) | |||||||||
|
2025 NPM Adjustment Items
|
2 | - | |||||||||
|
2025 Acquisition and disposition-related items
|
(80) | (0.05) | |||||||||
|
2025 Asset impairment, exit and implementation costs
|
(906) | (0.53) | |||||||||
|
2025 Tobacco and health and certain other litigation items
|
(37) | (0.02) | |||||||||
|
2025 Amortization of intangibles
|
(92) | (0.05) | |||||||||
|
2025 ABI-related special items
|
(28) | (0.02) | |||||||||
|
2025 Cronos-related special items
|
(2) | - | |||||||||
|
2025 Income tax items
|
7 | - | |||||||||
|
Subtotal 2025 special items
|
(1,136) | (0.67) | |||||||||
| Fewer shares outstanding | - | 0.10 | |||||||||
| Change in tax rate | 81 | 0.04 | |||||||||
| Operations | 163 | 0.09 | |||||||||
|
For the nine months ended September 30, 2025
|
$ | 5,830 | $ | 3.45 | |||||||
|
2025 Reported Net Earnings and Reported Diluted EPS
|
$ | 5,830 | $ | 3.45 | |||||||
|
2024 Reported Net Earnings and Reported Diluted EPS
|
$ | 8,225 | $ | 4.75 | |||||||
| % Change | (29.1) | % | (27.4) | % | |||||||
|
2025 Adjusted Net Earnings and Adjusted Diluted EPS
|
$ | 6,966 | $ | 4.12 | |||||||
|
2024 Adjusted Net Earnings and Adjusted Diluted EPS
|
$ | 6,722 | $ | 3.89 | |||||||
| % Change | 3.6 | % | 5.9 | % | |||||||
(1) Prior period amounts have been recast to conform with current period presentation for amortization of intangibles, which we did not previously identify as a special item and we now exclude from our adjusted financial measures. See Non-GAAP Financial Measuresbelow.
For a discussion of special items and other business drivers affecting the comparability of statements of earnings amounts and reconciliations of adjusted earnings and adjusted diluted EPS, see Consolidated Operating Resultsbelow.
▪Fewer Shares Outstanding:Fewer shares outstanding were due to shares we repurchased under our share repurchase programs.
▪Change in Tax Rate:The change in the tax rate (which excludes the impact of special items shown in the table above) was driven primarily by lower state tax expense.
▪Operations: The increase of $163 million in operations (which excludes the impact of special items shown in the table above) was due primarily to higher OCI, partially offset by higher interest and other debt expense, net and lower net periodic benefit income, excluding service cost.
For further details, see Consolidated Operating Resultsand Operating Results by Business Segmentbelow.
Consolidated Results of Operations for the Three Months Ended September 30, 2025
The changes in net earnings and diluted EPS for the three months ended September 30, 2025, from the three months ended September 30, 2024, were due primarily to the following:
| (in millions, except per share data) | Net Earnings | Diluted EPS | |||||||||
|
For the three months ended September 30, 2024
|
$ | 2,293 | $ | 1.34 | |||||||
|
2024 NPM Adjustment Items
|
(15) | (0.01) | |||||||||
|
2024 Acquisition and disposition-related items
|
33 | 0.02 | |||||||||
|
2024 Tobacco and health and certain other litigation items
|
16 | 0.01 | |||||||||
|
2024 Amortization of intangibles
|
31 | 0.02 | |||||||||
|
2024 ABI-related special items
|
18 | 0.01 | |||||||||
|
2024 Cronos-related special items
|
1 | - | |||||||||
|
2024 Income tax items
|
11 | 0.01 | |||||||||
|
Subtotal 2024 special items (1)
|
95 | 0.06 | |||||||||
|
2025 NPM Adjustment Items
|
2 | - | |||||||||
|
2025 Acquisition and disposition-related items
|
(3) | - | |||||||||
|
2025 Asset impairment, exit and implementation costs
|
(10) | - | |||||||||
|
2025 Tobacco and health and certain other litigation items
|
(3) | - | |||||||||
|
2025 Amortization of intangibles
|
(30) | (0.02) | |||||||||
|
2025 ABI-related special items
|
(27) | (0.02) | |||||||||
|
2025 Cronos-related special items
|
(18) | (0.01) | |||||||||
|
2025 Income tax items
|
20 | 0.01 | |||||||||
|
Subtotal 2025 special items
|
(69) | (0.04) | |||||||||
| Fewer shares outstanding | - | 0.02 | |||||||||
| Change in tax rate | 21 | 0.01 | |||||||||
| Operations | 35 | 0.02 | |||||||||
|
For the three months ended September 30, 2025
|
$ | 2,375 | $ | 1.41 | |||||||
|
2025 Reported Net Earnings and Reported Diluted EPS
|
$ | 2,375 | $ | 1.41 | |||||||
|
2024 Reported Net Earnings and Reported Diluted EPS
|
$ | 2,293 | $ | 1.34 | |||||||
| % Change | 3.6 | % | 5.2 | % | |||||||
|
2025 Adjusted Net Earnings and Adjusted Diluted EPS
|
$ | 2,444 | $ | 1.45 | |||||||
|
2024 Adjusted Net Earnings and Adjusted Diluted EPS
|
$ | 2,388 | $ | 1.40 | |||||||
| % Change | 2.3 | % | 3.6 | % | |||||||
(1) Prior period amounts have been recast to conform with current period presentation for amortization of intangibles, which we did not previously identify as a special item and we now exclude from our adjusted financial measures. See Non-GAAP Financial Measuresbelow.
For a discussion of special items and other business drivers affecting the comparability of statements of earnings amounts and reconciliations of adjusted earnings and adjusted diluted EPS, see Consolidated Operating Resultsbelow.
▪Fewer Shares Outstanding:Fewer shares outstanding were due to shares we repurchased under our share repurchase programs.
▪Operations: The increase of $35 million in operations (which excludes the impact of special items shown in the table above) was due primarily to higher OCI.
For further details, see Consolidated Operating Resultsand Operating Results by Business Segmentbelow.
Non-GAAP Financial Measures
We report our financial results in accordance with GAAP. However, our management also reviews certain financial results, including OCI, OCI margins, net earnings and diluted EPS, on an adjusted basis, which excludes certain income and expense items that our management believes are not part of underlying operations. These items may include, for example, loss on early extinguishment of debt, restructuring charges, asset impairment charges, acquisition, disposition and integration-related items,
equity investment-related special items, certain income tax items, charges associated with tobacco and health and certain other litigation items, resolutions of certain non-participating manufacturer ("NPM") adjustment disputes under the Master Settlement Agreement ("NPM Adjustment Items") and amortization expense associated with definite-lived intangible assets ("amortization of intangibles"). In addition, our management reviews the ratio of debt-to-Consolidated EBITDA, which we use as a factor to determine our ability to access the capital markets and make investments in pursuit of our Vision. Consolidated EBITDA is calculated in accordance with our Credit Agreement (defined below in Liquidity and Capital Resources) and includes certain adjustments. Our management does not view any of these special items to be part of our underlying results as they may be highly variable, may be unusual or infrequent, are difficult to predict and can distort underlying business trends and results. Our management also reviews income tax rates on an adjusted basis, which may exclude certain income tax items from our reported effective tax rate.
Beginning in the first quarter of 2025, we changed our treatment of our amortization of intangibles that we previously included in our adjusted results, including adjusted net earnings and adjusted diluted EPS, and now treat this expense as a special item and exclude it from our adjusted results. Amortization of intangibles is significantly impacted by the timing, frequency and size of acquisitions, each with unique facts and circumstances, which could result in amortization charges that could be inconsistent in size and timing. Net revenues generated from these definite-lived intangible assets during the periods presented, if applicable, are included in our adjusted financial measures.
Our management believes that the foregoing financial measures provide useful additional insight into underlying business trends and results, and provide a more meaningful comparison of year-over-year results. Our management uses these financial measures and regularly provides these to our chief operating decision maker ("CODM") for planning, forecasting and evaluating business and financial performance, including allocating capital and other resources and evaluating results relative to employee compensation targets. The foregoing financial measures are not required by, or calculated in accordance with GAAP and may not be calculated the same as similarly titled measures used by other companies. The foregoing financial measures should thus be considered as supplemental in nature and not considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP. When we provide a non-GAAP measure in this Form 10-Q, we also provide a reconciliation of that non-GAAP financial measure to the most directly comparable GAAP financial measure.
Discussion and Analysis
Our critical accounting policies and estimates are discussed in our 2024 Form 10-K; there have been no updates to these critical accounting estimates, except as noted below.
Critical Accounting Estimates
Goodwill and Other Intangible Assets Impairment Testing
We conduct a required annual review of goodwill and indefinite-lived intangible assets for potential impairment, and more frequently if an event occurs or circumstances change that would require an interim quantitative impairment assessment. There have been no events or changes in circumstances that indicate an interim quantitative impairment assessment was required for the three months ended September 30, 2025. We will perform our annual impairment testing during the fourth quarter of 2025.
E-Vapor Reporting Unit Goodwill
At December 31, 2024, the estimated fair value of the e-vapor reporting unit exceeded its carrying value by approximately 28% ($0.3 billion). As further discussed in Note 4. Goodwill and Other Intangible Assets, net("Note 4"), we determined the estimated fair value of the e-vapor reporting unit as of March 31, 2025 was below its carrying value and recorded a non-cash goodwill impairment of $873 million for the three months ended March 31, 2025 in our condensed consolidated statements of earnings. As of March 31, 2025, after recording the goodwill impairment, the carrying value of goodwill within the e-vapor reporting unit was $895 million. In addition, the carrying value of the e-vapor reporting unit's net assets (including the effect of intercompany debt), which was negative, approximated its estimated fair value.
At March 31, 2025, we used an income approach to estimate the fair value of the e-vapor reporting unit. Due to the uncertainties discussed below, our discounted cash flows are based on a range of scenarios that consider certain potential regulatory and market outcomes. In performing the discounted cash flow analysis, we made various judgments, estimates and assumptions, the most significant of which were volume, revenue, income, operating margins, perpetual growth rate and discount rates. The discount rates used in performing the valuation ranged from 12.0% to 15.0%.
Additionally, in determining these significant assumptions, we made judgments regarding our expectations for the future state of the e-vapor category and NJOY's business, including the (i) timing and extent of effective enforcement against illicit flavored disposable e-vapor products; (ii) timing and likelihood of regulatory authorizations of e-vapor products, including of NJOY's products; (iii) timing of the commercialization of NJOY e-vapor products in the United States; (iv) long-term growth of the e-vapor category; and (v) conversion rates of illicit flavored disposable e-vapor consumers to lawful e-vapor products and, specifically, NJOY's e-vapor products. Fair value calculations are sensitive to changes in these estimates and assumptions, some of which relate to broader macroeconomic conditions and governmental actions outside of our control.
Although our discounted cash flow analyses are based on assumptions that we consider reasonable using the best available information as of March 31, 2025, we used significant judgment in determining future cash flows. In addition to the judgments discussed above, the following factors also have the potential to impact our assumptions and, therefore, our impairment conclusions: general macroeconomic conditions; governmental actions, including FDA regulatory actions and inaction; changes in the e-vapor category growth (decline) rates as a result of changing adult tobacco consumer preferences; success of planned new product extensions; competitive activity; unfavorable outcomes with respect to litigation proceedings, including actions brought against us alleging patent infringement; and income and excise taxes. For further discussion of these factors, see Operating Results by Business Segment - Business Environment below.
We believe that the estimated fair value of the e-vapor reporting unit at March 31, 2025 remains reasonable and there are no events or circumstances indicating an impairment for the three months ended September 30, 2025. If the assumptions or judgments regarding the expectations for the future state of the e-vapor category and NJOY's business discussed above fail to materialize as anticipated, if we experience unfavorable outcomes with respect to litigation proceedings (including actions alleging patent infringement), or if the discount rate used to estimate the fair value increases, we could have additional non-cash impairments of our e-vapor reporting unit goodwill in future periods, which could be material. A hypothetical 1% increase to the discount rate used to estimate the fair value of the e-vapor reporting unit as of March 31, 2025 would have resulted in an additional goodwill impairment charge of approximately $275 million in the first quarter of 2025.
Skoal Trademark Indefinite-Lived Intangible Asset
At December 31, 2024, the estimated fair value of the Skoaltrademark exceeded its carrying value by approximately 7% ($0.3 billion). MST products, including Skoal, continued to be negatively impacted due in part to evolving adult tobacco consumer preferences, which have continued to contribute to reductions in sales volumes for MST products, including Skoal. For further discussion, see Trends and Developmentsabove and Operating Results by Business Segment - Business Environment - Summary below.
We believe that the estimated fair value of the Skoaltrademark at December 31, 2024 remains reasonable and there are no events or circumstances indicating an impairment for the three months ended September 30, 2025. If the decline in sales volume for Skoalis higher than currently estimated and results in material revenue declines, we believe there may be a material adverse effect on the significant assumptions used in performing our valuation. If Skoal's actual revenue and income or long-term outlook are significantly unfavorable compared to forecasted performance used to estimate the fair value or if the discount rate used to estimate the fair value increases, we could have material non-cash impairments of the Skoaltrademark in future periods. Based on the 2024 annual impairment test, a hypothetical 1% increase to the discount rate used would have resulted in a pre-tax impairment charge to the Skoalintangible asset of approximately $85 million.
For further discussion of goodwill and other intangible assets, including the impairments of the e-vapor reporting unit goodwill in the first quarter of 2025 and the Skoaltrademark in the second quarter of 2024, see Note 4.
Consolidated Operating Results
| For the Nine Months Ended September 30, | For the Three Months Ended September 30, | ||||||||||||||||||||||
| (in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Net Revenues: | |||||||||||||||||||||||
| Smokeable products | $ | 15,366 | $ | 15,941 | $ | 5,387 | $ | 5,540 | |||||||||||||||
| Oral tobacco products | 2,096 | 2,084 | 689 | 722 | |||||||||||||||||||
| All other | (29) | 19 | (4) | (3) | |||||||||||||||||||
| Net revenues | $ | 17,433 | $ | 18,044 | $ | 6,072 | $ | 6,259 | |||||||||||||||
| Excise Taxes on Products: | |||||||||||||||||||||||
| Smokeable products | $ | 2,299 | $ | 2,630 | $ | 797 | $ | 888 | |||||||||||||||
| Oral tobacco products | 74 | 76 | 24 | 27 | |||||||||||||||||||
| Excise taxes on products | $ | 2,373 | $ | 2,706 | $ | 821 | $ | 915 | |||||||||||||||
| Operating Income: | |||||||||||||||||||||||
| OCI: | |||||||||||||||||||||||
| Smokeable products | $ | 8,341 | $ | 8,183 | $ | 2,942 | $ | 2,937 | |||||||||||||||
| Oral tobacco products | 1,390 | 996 | 459 | 464 | |||||||||||||||||||
| All other | (1,198) | (291) | (76) | (119) | |||||||||||||||||||
| Amortization of intangibles | (112) | (102) | (38) | (38) | |||||||||||||||||||
| General corporate expenses | (173) | (427) | (57) | (92) | |||||||||||||||||||
| Operating income | $ | 8,248 | $ | 8,359 | $ | 3,230 | $ | 3,152 | |||||||||||||||
As discussed further in Note 11. Segment Reporting("Note 11"), our CODM reviews OCI, which is defined as operating income before general corporate expenses and amortization of intangibles, to evaluate the performance of, and allocate resources to, our segments. Our management believes it is appropriate to disclose this measure to help investors analyze our business performance and trends.
The following table provides a reconciliation of adjusted net earnings and adjusted diluted EPS for the nine months ended September 30:
| (in millions of dollars, except per share data) | Earnings before Income Taxes | Provision for Income Taxes | Net Earnings |
Diluted EPS |
||||||||||
|
2025 Reported
|
$ | 7,876 | $ | 2,046 | $ | 5,830 | $ | 3.45 | ||||||
| NPM Adjustment Items | (2) | - | (2) | - | ||||||||||
| Acquisition and disposition-related items | 96 | 16 | 80 | 0.05 | ||||||||||
| Asset impairment, exit and implementation costs | 916 | 10 | 906 | 0.53 | ||||||||||
|
Tobacco and health and certain other litigation items
|
48 | 11 | 37 | 0.02 | ||||||||||
| Amortization of intangibles | 112 | 20 | 92 | 0.05 | ||||||||||
| ABI-related special items | 36 | 8 | 28 | 0.02 | ||||||||||
| Cronos-related special items | 2 | - | 2 | - | ||||||||||
| Income tax items | - | 7 | (7) | - | ||||||||||
|
2025 Adjusted for Special Items
|
$ | 9,084 | $ | 2,118 | $ | 6,966 | $ | 4.12 | ||||||
|
2024 Reported
|
$ | 10,881 | $ | 2,656 | $ | 8,225 | $ | 4.75 | ||||||
| NPM Adjustment Items | (27) | (7) | (20) | (0.01) | ||||||||||
| Acquisition and disposition-related items | (2,513) | (664) | (1,849) | (1.07) | ||||||||||
| Asset impairment, exit and implementation costs | 354 | 90 | 264 | 0.15 | ||||||||||
| Tobacco and health and certain other litigation items | 90 | 22 | 68 | 0.04 | ||||||||||
|
Amortization of intangibles
|
102 | 17 | 85 | 0.05 | ||||||||||
| ABI-related special items | (39) | (9) | (30) | (0.01) | ||||||||||
| Cronos-related special items | 22 | 2 | 20 | 0.01 | ||||||||||
| Income tax items | - | 41 | (41) | (0.02) | ||||||||||
|
2024 Adjusted for Special Items (1)
|
$ | 8,870 | $ | 2,148 | $ | 6,722 | $ | 3.89 | ||||||
(1) Prior period amounts have been recast to conform with current period presentation for amortization of intangibles, which we did not previously identify as a special item and we now exclude from our adjusted financial measures. See Non-GAAP Financial Measuresabove.
The following table provides a reconciliation of adjusted net earnings and adjusted diluted EPS for the three months ended September 30:
| (in millions of dollars, except per share data) | Earnings before Income Taxes | Provision for Income Taxes | Net Earnings |
Diluted EPS |
||||||||||
|
2025 Reported
|
$ | 3,075 | $ | 700 | $ | 2,375 | $ | 1.41 | ||||||
| NPM Adjustment Items | (2) | - | (2) | - | ||||||||||
| Acquisition and disposition-related items | 1 | (2) | 3 | - | ||||||||||
| Asset impairment, exit and implementation costs | 13 | 3 | 10 | - | ||||||||||
|
Tobacco and health and certain other litigation items
|
3 | - | 3 | - | ||||||||||
| Amortization of intangibles | 38 | 8 | 30 | 0.02 | ||||||||||
| ABI-related special items | 34 | 7 | 27 | 0.02 | ||||||||||
| Cronos-related special items | 18 | - | 18 | 0.01 | ||||||||||
| Income tax items | - | 20 | (20) | (0.01) | ||||||||||
|
2025 Adjusted for Special Items
|
$ | 3,180 | $ | 736 | $ | 2,444 | $ | 1.45 | ||||||
|
2024 Reported
|
$ | 3,026 | $ | 733 | $ | 2,293 | $ | 1.34 | ||||||
| NPM Adjustment Items | (21) | (6) | (15) | (0.01) | ||||||||||
| Acquisition and disposition-related items | 44 | 11 | 33 | 0.02 | ||||||||||
| Tobacco and health and certain other litigation items | 22 | 6 | 16 | 0.01 | ||||||||||
|
Amortization of intangibles
|
38 | 7 | 31 | 0.02 | ||||||||||
| ABI-related special items | 23 | 5 | 18 | 0.01 | ||||||||||
| Cronos-related special items | 2 | 1 | 1 | - | ||||||||||
| Income tax items | - | (11) | 11 | 0.01 | ||||||||||
|
2024 Adjusted for Special Items (1)
|
$ | 3,134 | $ | 746 | $ | 2,388 | $ | 1.40 | ||||||
(1) Prior period amounts have been recast to conform with current period presentation for amortization of intangibles, which we did not previously identify as a special item and we now exclude from our adjusted financial measures. See Non-GAAP Financial Measuresabove.
The following special items affected the comparability of statements of earnings amounts for the nine and three months ended September 30, 2025 and 2024:
▪NPM Adjustment Items: For a discussion of NPM Adjustment Items and a breakdown of these items by segment, see Health Care Cost Recovery Litigationin Note 14. Contingencies("Note 14") and NPM Adjustment Items in Note 11, respectively.
▪Acquisition and disposition-related items:We recorded net pre-tax charges reflecting expenses primarily related to the U.S. International Trade Commission ("ITC") exclusion order and cease-and-desist orders prohibiting the importation and sale of NJOY ACEin the United States. These charges are net of insurance recoveries from insurance contracts associated with the acquisition of NJOY Holdings, Inc. ("NJOY Transaction"). For further information on the ITC's determination, see E-vapor Product Litigation in Note 14. We recorded these items as follows:
| For the Nine Months Ended September 30, | For the Three Months Ended September 30, | ||||||||||||||||||||||
| (in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
|
Net revenues (1)
|
$ | 42 | $ | - | $ | - | $ | - | |||||||||||||||
|
Cost of sales (1)
|
44 | - | - | - | |||||||||||||||||||
|
Marketing, administration and research costs (2)
|
(15) | 47 | 1 | 44 | |||||||||||||||||||
| Total | $ | 71 | $ | 47 | $ | 1 | $ | 44 | |||||||||||||||
(1)Included in our all other category.
(2) Recorded as general corporate expense, net of $34 million and $9 million of insurance recoveries for the nine and three months ended 2025, respectively. In 2024 and 2025, we incurred total costs of $166 million primarily associated with the ITC determination and patent infringement lawsuits related to the NJOY Transaction, which were offset by insurance recoveries of $59 million. These total amounts include $61 million of costs offset by $25 million of insurance recoveries recorded in 2024.
Additionally, we recorded a non-cash, pre-tax charge of $25 million for the nine months ended September 30, 2025 for the change in the fair value of the contingent payments associated with the NJOY Transaction. In connection with the June 2024 issuance by the FDA of MGOs for four NJOY menthol e-vapor products, we recorded a pre-tax charge of approximately $140 million for the nine months ended September 30, 2024 for the change in the fair value of the contingent payments associated with the NJOY Transaction. These charges were recorded as general corporate expense and included in marketing, administration and research costs in our condensed consolidated statements of earnings. For further information, seeContingent Payments in Note 7. Financial Instruments.
We recorded a pre-tax gain of $2.7 billion upon the assignment of the IQOS Tobacco Heating System ("IQOSSystem") commercialization rights to Philip Morris International Inc. in April 2024, for the nine months ended September 30, 2024.
▪Asset Impairment, Exit and Implementation Costs:We recorded a non-cash impairment charge of $873 million to reduce the carrying value of the e-vapor reporting unit goodwill to its estimated fair value for the nine months ended September 30, 2025 in our all other category. There was no income tax benefit associated with the impairment of the e-vapor reporting unit goodwill as the impairment is non-deductible for tax purposes. We recorded a non-cash, pre-tax impairment of the Skoaltrademark of $354 million for the nine months ended September 30, 2024 in our oral tobacco products segment. For further discussion, see Note 4.
We recorded exit and implementation costs of $43 million and $13 million related to our Optimize & Accelerateinitiative ("Initiative") for the nine and three months ended September 30, 2025, respectively. For a breakdown of these costs by segment, see Note 5. Exit and Implementation Costs.
▪Tobacco and Health and Certain Other Litigation Items:For a discussion of tobacco and health and certain other litigation items and a breakdown of these costs by segment, see Note 14 and Tobacco and Health and Certain Other Litigation Itemsin Note 11, respectively.
▪Amortization of Intangibles:We recorded pre-tax amortization expense of definite-lived intangible assets of $112 million and $102 million for the nine months ended September 30, 2025 and 2024, respectively, and $38 million for each of the three months ended September 30, 2025 and 2024 in marketing, administration and research costs in our condensed consolidated statements of earnings.
▪ABI-Related Special Items:We recorded net pre-tax losses of $36 million and $34 million from our investment in ABI for the nine and three months ended September 30, 2025, respectively, consisting primarily of mark-to-market losses on certain ABI financial instruments associated with its share commitments.
We recorded net pre-tax income of $39 million from our investment in ABI for the nine months ended September 30, 2024, which consisted primarily of a gain related to our sale of a portion of our investment in ABI ("ABI Transaction"), net of transaction costs, partially offset by mark-to-market losses on certain ABI financial instruments associated with its share commitments. For further information on the gain related to the ABI Transaction, see Note 6. Investments in Equity Securities.
The ABI-related special items include our respective share of the amounts recorded by ABI and additional adjustments related to (i) the conversion of ABI-related special items from international financial reporting standards to GAAP and (ii) adjustments to our investment required under the equity method of accounting.
▪Income Tax Items: We recorded income tax items of $20 million for the three months ended September 30, 2025, due primarily to an income tax benefit from tax reserves, which includes a favorable rate differential associated with certain cross-border taxes, related to an unfavorable federal court ruling concerning a change in the application of foreign attribution rules relevant to our investment in ABI, partially offset by tax expense associated with the increase of a valuation allowance related to our unrecognized capital losses. For further discussion, see Note 13. Income Taxes.
We recorded income tax items of $41 million for the nine months ended September 30, 2024, due primarily to an income tax benefit from the partial release of a valuation allowance associated with our losses related to our former investment in JUUL Labs, Inc. ("JUUL"), partially offset by interest expense on tax reserves recorded in prior years. The valuation allowance release was due to our capital gain on the ABI Transaction.
Nine Months Ended September 30, 2025 Compared with Nine Months Ended September 30, 2024
Net revenues, which include excise taxes billed to customers, decreased $611 million (3.4%), due primarily to lower net revenues in our smokeable products segment.
Cost of sales decreased $426 million (9.3%), due primarily to lower shipment volume and lower per unit settlement charges in our smokeable products segment, partially offset by higher NJOY costs and lower NPM adjustment items.
Excise taxes on products decreased $333 million (12.3%), due primarily to lower shipment volume in our smokeable products segment.
Marketing, administration and research costs decreased $263 million (12.8%), due primarily to lower acquisition-related items discussed above and transaction costs associated with the ABI Transaction in 2024, both of which are included in general corporate expenses.
Operating income decreased $111 million (1.3%), due primarily to lower OCI (which includes the net impact of a non-cash impairment of the e-vapor reporting unit goodwill in 2025 and a non-cash impairment of the Skoaltrademark in our oral tobacco product segment in 2024), partially offset by lower general corporate expenses.
(Income) losses from investments in equity securities were unfavorable $132 million (24.9%), due primarily to lower income from our equity investment in ABI (which includes our gain on the ABI Transaction in 2024 and lower ownership interest).
Provision for income taxes decreased $610 million (23%), due primarily to lower earnings before income taxes, partially offset by unfavorable tax items as discussed above.
Reported net earnings of $5,830 million decreased $2,395 million (29.1%), due primarily to the gain on the sale of the IQOS System commercialization rights in 2024, unfavorable results from our equity investment in ABI, lower operating income and unfavorable income tax items. Reported basic and diluted EPS of $3.45, each decreased by 27.4% due to lower reported net earnings, partially offset by fewer shares outstanding.
Adjusted net earnings of $6,966 million increased $244 million (3.6%), due primarily to higher OCI and a lower adjusted tax rate, partially offset by higher interest and other debt expense, net and lower net periodic benefit income, excluding service cost. Adjusted diluted EPS of $4.12 increased by 5.9%, due to higher adjusted net earnings and fewer shares outstanding.
Three Months Ended September 30, 2025 Compared with Three Months Ended September 30, 2024
Net revenues, which include excise taxes billed to customers, decreased $187 million (3.0%), due primarily to lower net revenues in our smokeable and oral tobacco products segments.
Cost of sales decreased $97 million (6.3%), due primarily to lower shipment volume and lower per unit settlement charges in our smokeable products segment, partially offset by lower NPM adjustment items.
Excise taxes on products decreased $94 million (10.3%), due primarily to lower shipment volume in our smokeable products segment.
Marketing, administration and research costs decreased $76 million (11.6%), due primarily to lower acquisition-related items discussed above, included in general corporate expense.
Operating income increased $78 million (2.5%), due primarily to higher OCI and lower general corporate expenses.
Reported net earnings of $2,375 million increased $82 million (3.6%), due primarily to higher operating income. Reported basic and diluted EPS of $1.41, each increased by 5.2% due to higher reported net earnings and fewer shares outstanding.
Adjusted net earnings of $2,444 million increased $56 million (2.3%), due primarily to higher OCI. Adjusted diluted EPS of $1.45 increased by 3.6%, due to higher adjusted net earnings and fewer shares outstanding.
Operating Results by Business Segment
Business Environment
Summary
The U.S. tobacco industry faces a number of business and legal challenges that have materially adversely affected and may continue to materially adversely affect our business, results of operations, cash flows or financial position or our ability to achieve our Vision. These challenges, which we discuss below and in more detail in Note 14, and in Part I, Item 1A. Risk Factors in our 2024 Form 10-K and in Part II, Item 1A. Risk Factors of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 ("First Quarter Form 10-Q"), include:
▪pending and threatened litigation and bonding requirements;
▪restrictions and requirements imposed by the Family Smoking Prevention and Tobacco Control Act ("FSPTCA") and restrictions and requirements (and related enforcement actions) that have been, and in the future will be, imposed by the FDA;
▪the FDA's failure to effectively address illicit tobacco products on the market, including illicit disposable e-vapor and oral nicotine pouch products;
▪illicit trade in tobacco products, including cigarettes, e-vapor products and oral nicotine pouch products;
▪actual and proposed excise tax increases, as well as changes in tax structures and tax stamping requirements;
▪bans and restrictions on tobacco use imposed by governmental entities and private establishments and employers;
▪other federal, state and local government actions, including:
▪restrictions on the sale of certain tobacco products, the sale of tobacco products by certain retail establishments, the sale of tobacco products with characterizing flavors and the sale of tobacco products in certain package sizes;
▪additional restrictions on the advertising and promotion of tobacco products;
▪other actual and proposed tobacco-related legislation and regulation; and
▪governmental investigations;
▪reductions in consumption levels of cigarettes and MST products resulting in lower shipment volumes;
▪increased efforts by tobacco control advocates and other private sector entities (including retail establishments) to further restrict the availability and use of tobacco products or the ability to communicate with consumers through third-party digital platforms;
▪changes in adult tobacco consumer purchase behavior, which is influenced by various factors such as macroeconomic conditions (including inflation and tariffs), the proliferation of illicit disposable e-vapor products, excise taxes and product price gap relationships, each of which has resulted and may in the future result in adult tobacco consumers switching to lower-priced tobacco products and lower shipment volumes;
▪the highly competitive nature of all tobacco categories, including competitive disadvantages related to the impact on cigarette prices due to the settlement of certain healthcare cost recovery litigation and the growth of innovative tobacco products, such as e-vapor and oral nicotine pouch products;
▪the growth of products using nicotine analogues that are designed to imitate the effects of nicotine but are not subject to the FDA regulatory framework for tobacco products; and
▪potential adverse changes in prices, availability and quality of tobacco, other raw materials and component parts, including as a result of changes in macroeconomic, geopolitical, climate and environmental conditions.
We continue to monitor the evolving business, legal and regulatory challenges within our business environment to assess potential impacts on us. Changes in these and other conditions could have a material adverse effect on our business, results of operations, cash flows, financial position and our ability to achieve our Vision.
FSPTCA and FDA Regulation
▪The Regulatory Framework: The FSPTCA and its related regulations establish broad FDA regulatory authority over all tobacco products and, among other provisions:
▪impose restrictions on the advertising, promotion, sale and distribution of tobacco products (see Final Tobacco Marketing Rulebelow);
▪establish premarket review pathways for new and modified tobacco products (see Premarket Review Pathways for Tobacco Products and Market Authorization Enforcementbelow);
▪prohibit any express or implied claims that a tobacco product is or may be less harmful than other tobacco products without FDA authorization;
▪authorize the FDA to impose tobacco product standards that are appropriate for the protection of public health (see Potential Product Standardsbelow); and
▪equip the FDA with a variety of investigatory and enforcement tools, including the authority to inspect product manufacturing and other facilities (see Investigation and Enforcementbelow).
Effective April 2022, the U.S. Congress expanded the statutory definition of tobacco products to include products containing nicotine derived from any source, including synthetic nicotine. See Premarket Review Pathways for Tobacco Products and Market Authorization Enforcementbelow for additional information. Currently, however, the statutory definition of tobacco products does not cover products containing nicotine analogues, which are designed to imitate the effects of nicotine. As a result, products containing nicotine analogues are not subject to the FDA regulatory framework for tobacco products.
▪Final Tobacco Marketing Rule: As required by the FSPTCA, the FDA has promulgated a wide range of advertising and promotion restrictions for cigarettes and smokeless tobacco(1)products (the "Final Tobacco Marketing Rule"), which the FDA has subsequently amended to expand specific provisions to all tobacco products, including cigars, pipe tobacco and e-vapor and oral nicotine products containing tobacco-derived nicotine or other tobacco derivatives such as synthetic nicotine. The Final Tobacco Marketing Rule currently does not apply to products containing nicotine analogues.
▪Rulemaking and Guidance: From time to time, the FDA issues proposed regulations and guidance, which may be issued in draft or final form, that generally involve public comment and may include scientific review. We actively engage
(1) "Smokeless tobacco," as used in this section of this Form 10-Q, refers to smokeless tobacco products first regulated by the FDA in 2009, including MST. It excludes oral nicotine pouches, which were first regulated by the FDA in 2016.
with the FDA to develop and implement the FSPTCA's regulatory framework, including submission of comments to various FDA policies and proposals and participation in public hearings and engagement sessions.
The FDA's implementation of the FSPTCA and related regulations and guidance also may have an impact on enforcement efforts by states, territories and localities of their laws and regulations as well as of the State Settlement Agreements (see State Settlement Agreementsbelow). Such enforcement efforts may adversely affect our operating companies' abilities to market and sell tobacco products in those states, territories and localities.
▪FDA's Five-Year Strategic Plan for Tobacco and Nicotine Regulation:In December 2023, the FDA released its five-year strategic plan to address concerns raised by the Reagan-Udall Foundation's operational evaluation of the FDA's Center for Tobacco Products. The Reagan-Udall report urged the FDA to clearly define product pathways, accelerate PMTA decision making, address the need for health risk communications to tobacco consumers and take enforcement actions against manufacturers and products that violate the law.
The FDA's five-year strategic plan lists five goals:
▪develop, advance and communicate comprehensive and impactful tobacco regulations and guidance;
▪ensure timely, clear and consistent product application review;
▪strengthen compliance of regulated industry using all available tools, including robust enforcement actions;
▪enhance knowledge and understanding of the risks associated with tobacco product use; and
▪advance operational excellence.
▪Premarket Review Pathways for Tobacco Products and Market Authorization Enforcement: The FSPTCA permits the sale of tobacco products on the market as of February 15, 2007 and not subsequently modified ("Pre-existing Tobacco Products") and new or modified products authorized through the PMTA, Substantial Equivalence ("SE") or SE Exemption pathways. Subsequent FDA rules also provide a Supplemental PMTA pathway designed to increase the efficiency of submission and review for modified versions of previously authorized products.
For products currently on the market, the FDA premarket authorization enforcement policy varies based on product type and date of availability on the market, specifically:
▪Pre-existing Tobacco Products are exempt from the premarket authorization requirement;
▪cigarette and smokeless tobacco products that were modified or first introduced into the market between February 15, 2007 and March 22, 2011 are generally considered "Provisional Products" for which SE reports were required to be filed by March 22, 2011. These reports must demonstrate that the product has the same characteristics as a product on the market as of February 15, 2007 or to a product previously determined to be substantially equivalent, or has different characteristics but does not raise different questions of public health;
▪tobacco products that were first regulated by the FDA in 2016, including cigars, e-vapor products and oral nicotine pouches that are not Pre-existing Tobacco Products, are generally products for which either an SE report or PMTA needed to be filed by September 9, 2020; and
▪tobacco products containing nicotine from any source other than tobacco (e.g., synthetic nicotine) that were on the market between March 15, 2022 and April 14, 2022 and are not Pre-existing Tobacco Products are generally products for which a manufacturer must have filed a PMTA by May 14, 2022. A manufacturer was permitted to keep such a product on the market until July 13, 2022 provided that a PMTA was filed by May 14, 2022. Thereafter, unless the FDA granted the product a marketing order, the product is subject to possible FDA enforcement.
The FSPTCA requires the FDA to issue a marketing order (either an MGO or a marketing denial order ("MDO")) with respect to a PMTA no later than 180 days after receipt of the PMTA. Following the 180-day FDA review period, the FSPTCA allows any party that receives an MDO to seek expedited judicial review of the ruling in a federal appellate court within 30 days. Together, these statutory deadlines for FDA action and judicial review create a structure and timeline for manufacturers seeking to market new products. While it is possible that the FDA may bring an enforcement action relating to commercialized products for which a PMTA has been pending longer than the 180-day review period, we believe that any such enforcement action would conflict with the FSPTCA. Our operating companies may decide to commercialize products that have not received MGOs from the FDA if the operating company submitted a PMTA with respect to any such product in compliance with the FSPTCA and the FDA failed to issue a marketing order within the statutory review period.
Modifications to currently marketed products, including modifications that result from, for example, changes to the quantity of tobacco product(s) in a package, a manufacturer being unable to acquire ingredients or a supplier or contract manufacturer being unable to maintain the consistency required in ingredients or manufacturing processes, could trigger the FDA's premarket review process. Additionally, a manufacturer may be unable to maintain consistency in manufacturing processes as it increases the scale of its manufacturing operations in response to market expansion or product introduction. These circumstances could
cause a manufacturer to receive (i) a "not substantially equivalent" determination or (ii) a denial or withdrawal of a PMTA, either of which could result in a product being removed from the market. In addition, new scientific data continues to be developed relating to innovative tobacco products, which could impact the FDA's determination as to whether a product is, or continues to be, appropriate for the protection of public health and could, therefore, result in the removal of one or more products from the market. Any such actions affecting our operating companies' products could have a material adverse impact on our business, results of operations, cash flows or financial position.
Products Regulated in 2009: Most cigarette and smokeless tobacco products currently marketed by PM USA and USSTC are "Provisional Products." PM USA and USSTC timely submitted SE reports for these Provisional Products and have received SE determinations on certain Provisional Products. Those products that were found by the FDA to be not substantially equivalent (certain smokeless tobacco products) had been discontinued for business reasons prior to the FDA's determinations; therefore, those determinations did not impact business results. PM USA and USSTC have other Provisional Products that continue to be subject to the FDA's premarket review process. In the meantime, they can continue marketing these products unless the FDA determines that a specific Provisional Product is not substantially equivalent.
In addition, the FDA has communicated that it will not review a certain subset of Provisional Product SE reports and that the products that are the subject of those reports can continue to be legally marketed without further FDA review. PM USA and USSTC have Provisional Products included in this subset of products.
While we believe PM USA's and USSTC's current Provisional Products meet the statutory requirements of the FSPTCA, we cannot predict how the FDA will ultimately apply law, regulation, guidance or enforcement authority to various SE reports. Should PM USA or USSTC receive unfavorable determinations on any SE report currently pending with the FDA, we believe PM USA and USSTC can replace the vast majority of these product volumes with other FDA authorized products or with Pre-existing Tobacco Products.
Cigarette and smokeless tobacco products introduced into the market or modified after March 22, 2011 are "Non-Provisional Products" and must apply to receive an MGO from the FDA prior to being offered for sale. MGOs for Non-Provisional Products may be obtained by filing an SE report, a PMTA or using another premarket pathway established by the FDA. PM USA and USSTC may not be able to obtain an MGO for non-provisional products because the FDA may determine that any such product does not meet the statutory requirements for approval.
Products Regulated in 2016: Manufacturers of products first regulated by the FDA in 2016, including cigars, oral nicotine pouches and e-vapor products, that were on the market as of August 8, 2016 and not subsequently modified must have filed an SE report or a PMTA by the filing deadline of September 9, 2020 in order for their products to remain on the market. These products can remain on the market during FDA review through enforcement discretion, so long as the report or application was timely filed with the FDA. For those products still under FDA review, it is uncertain when and for how long the FDA may permit continued marketing and sale of those products pursuant to its discretion. For products (new or modified) not on the market as of August 8, 2016, manufacturers must file an SE report or a PMTA. As described above, the FSPTCA requires the FDA to issue a marketing order with respect to a PMTA no later than 180 days after receipt of the PMTA.
Helix submitted PMTAs for on!oral nicotine pouches on the market as of August 2016 in May 2020, PMTAs for additional on! oral nicotine pouches in September 2024 and PMTAs for on! PLUSoral nicotine pouches in tobacco, mint and wintergreen flavors in June 2024. In September 2025, the FDA launched a pilot program intended to increase efficiency and streamline the review process for PMTAs for select oral nicotine pouch products. Also in September 2025, the FDA communicated to Helix that PMTAs for certain of its products, including on! PLUS,were being reviewed through the pilot program. As of October 27, 2025, the FDA has not issued a marketing order with respect to any on!or on! PLUSPMTA. In October 2025, following the expiration of the 180-day statutory review period, Helix began commercializing on! PLUS. Helix intends to comply with the post-market record keeping and reporting requirements of the FDA's most recently issued MGOs for similar products.
As of October 27, 2025, Middleton has received MGOs or exemptions that cover over 99% of its cigar product volume.
As a result of our June 2023 acquisition of NJOY Holdings, Inc., we gained full global ownership of NJOY's e-vapor product portfolio, including NJOY ACE, a pod-based e-vapor product with an MGO from the FDA, and NJOY DAILY, which also has an MGO. In June 2024, NJOY received MGOs with respect to two NJOY ACE menthol products and two NJOY DAILY menthol products. In May 2024, NJOY submitted a supplemental PMTA to the FDA to commercialize and market the NJOY ACE 2.0device, which leverages Bluetooth®connectivity to incorporate access restriction technology designed to prevent underage use by authenticating the user before unlocking the device. Also in May 2024, NJOY re-submitted PMTAs for blueberry and watermelon flavored pod-based e-vapor products that work exclusively with the Bluetooth®-enabled NJOY ACE 2.0device. These products previously received MDOs on the basis of FDA concerns regarding potential underage use. NJOY ACE and the NJOY ACE 2.0are subject to U.S. International Trade Commission exclusion and cease-and-desist orders prohibiting their importation and sale in the United States. See Note 14. NJOY Dailyis not subject to these orders.
Effect of Adverse FDA Determinations: FDA review timeframes have varied. It is therefore difficult to predict the duration of FDA reviews of SE reports or PMTAs. An unfavorable determination on an application, the withdrawal by the FDA of a prior MGO, an FDA enforcement action or other changes in FDA regulatory requirements could result in the removal of products from the market. A "not substantially equivalent" determination, a denial of a PMTA, an MGO withdrawal or an enforcement action by the FDA with respect to one or more products (each of which could require the removal of the product or products from the market) could have a material adverse impact on our business, results of operations, cash flows or financial position. Also, adverse FDA determinations or enforcement actions concerning innovative tobacco products could have a material adverse effect on our innovative tobacco businesses and our ability to achieve our Vision.
Post-Market Surveillance: Manufacturers that receive MGOs must adhere to the FDA post-market record keeping and reporting requirements, as detailed in market orders and in the final PMTA rule. The requirements include prior notification of marketing activities. The FDA may amend requirements of an MGO or withdraw the MGO based on this information if, among other reasons, it determines that the continued marketing of the products is no longer appropriate for the protection of the public health. If the FDA fails to issue a marketing order within the statutory review period with respect to a PMTA submitted by one of our operating companies and that operating company elects to commercialize the applicable product, we expect that operating company will execute its plans consistent with the post-market record keeping and reporting requirements of the FDA's most recently issued MGOs for similar products.
▪FDA Regulatory Actions
▪Graphic Warnings: In March 2020, the FDA issued a final rule requiring 11 textual warnings accompanied by color graphics depicting certain negative health consequences of smoking on cigarette packaging and advertising. PM USA and other cigarette manufacturers filed lawsuits challenging the final rule on substantive and procedural grounds. In December 2022, the U.S. District Court for the Eastern District of Texas found in favor of cigarette manufacturers in one such suit and blocked the rule, finding it unconstitutional on the basis that it compelled speech in violation of the First Amendment. The FDA appealed the decision, and, in March 2024, the U.S. Court of Appeals for the Fifth Circuit reversed the district court and remanded the case for further proceedings. In August 2024, the cigarette manufacturers in the suit petitioned the U.S. Supreme Court to review the case, which the U.S. Supreme Court declined to do.
In January 2025, the U.S. District Court for the Eastern District of Texas found in favor of cigarette manufacturers that had challenged the final rule on the basis that the FDA exceeded its statutory authority by requiring cigarette packaging and advertising to contain 11 specific warnings when it only had the authority to require nine. In its ruling, the court granted a preliminary injunction staying the FDA's enforcement of the rule against all cigarette manufacturers pending further litigation. In March 2025, the FDA appealed that decision to the U.S. Court of Appeals for the Fifth Circuit.
In December 2024, PM USA and several Georgia co-plaintiffs filed suit against the FDA in the U.S. District Court for the Southern District of Georgia, challenging the final rule on substantive and procedural grounds. In August 2025, the federal court vacated the final rule on the basis that the FDA violated federal law by not disclosing timely data it relied on in creating the rule. In October 2025, the FDA appealed that decision to the U.S. Court of Appeals for the Eleventh Circuit.
▪Underage Access and Use of Certain Tobacco Products: The FDA announced regulatory actions in September 2018 to address underage access to and use of e-vapor products. We have engaged with the FDA on this topic and have reaffirmed to the FDA our ongoing and long-standing commitment to preventing underage use. For example, we advocated raising the minimum legal age to purchase all tobacco products to 21 at the federal and state levels to further address underage use, which is now federal law. We continue to advocate in states that have not yet raised the minimum legal age to purchase all tobacco products to 21. See Federal, State and Local Legislation to Increase the Legal Age to Purchase Tobacco Products below for further discussion.
Additionally, the FDA issued final guidance in April 2020, stating that it intended to prioritize enforcement action against certain product categories, including pod-based, flavored e-vapor products and products targeted to minors. For more information on the FDA's and other federal agencies' enforcement efforts, see Investigation and Enforcementbelow.
▪E-Vapor Products: In September 2022, the FDA represented that it had resolved more than 99% of the timely applications it had received, the vast majority of which were for e-vapor products and resulted in MDOs. As of October 27, 2025, many manufacturers of menthol and other flavored e-vapor products have received MDOs for failure to provide sufficiently strong product-specific scientific evidence to demonstrate that the benefits of their products to adult smokers overcome the risks that their products pose to youth. The FDA has communicated in these MDOs that vapor products with non-tobacco flavors present unique questions relevant to the FDA's "Appropriate for the Protection of Public Health" standard and that successful applications require strong, product-specific evidence. A
number of these manufacturers are challenging the MDOs for their products. In January 2024, the U.S. Court of Appeals for the Fifth Circuit ruled that the FDA had unlawfully changed its position with respect to the information required to obtain a PMTA. In April 2025, the U.S. Supreme Court vacated the U.S. Court of Appeals for the Fifth Circuit's determination, concluding that manufacturers had been given fair notice of the PMTA requirements, and remanded the case for further review. Other U.S. Courts of Appeals have upheld adverse FDA determinations.
▪Potential Product Standards
▪Nicotine in Cigarettes and Other Combustible Tobacco Products: In January 2025, the FDA proposed a tobacco product standard that would establish a maximum nicotine level in cigarettes and certain other combustible tobacco products (including little cigars, cigarillos and most large cigars) significantly lower than the average concentration in these products currently on the market with the aim of making such products minimally or non-addictive. The public comment period on the proposed product standard closed in September 2025, and we have engaged with the FDA through the rulemaking process, including by submitting comments. We believe the rulemaking process for this proposed product standard will take multiple years to complete.
▪Flavors in Tobacco Products: In April 2022, the FDA issued two proposed product standards: (i) banning menthol in cigarettes and (ii) banning all characterizing flavors (including menthol) in cigars. We submitted comments during the notice-and-comment period. In October 2023, the FDA submitted the two proposed product standards to the White House Office of Management and Budget for review. In January 2025, the Trump Administration withdrew the two proposed product standards from the Office of Management and Budget ("OMB") and sent them back to the FDA.
▪N-nitrosonornicotine ("NNN") in Smokeless Tobacco: In January 2017, the FDA proposed a product standard for NNN levels in finished smokeless tobacco products.
If any one or more of the foregoing potential product standards were to become final and was appealed and upheld in the courts, it could have a material adverse effect on our business, results of operations, cash flows or financial position, including a material adverse effect on the carrying value of certain of our assets such as our cigar trademarks.
▪Tobacco Product Manufacturing Practices: In March 2023, the FDA, pursuant to the requirements of the FSPTCA, issued a proposed rule setting forth requirements for tobacco product manufacturers regarding the manufacture, design, packing and storage of their products. This proposed rule establishes a framework of tobacco product manufacturing practices. OMB lists the rule as a long-term action. If the proposed rule were to take effect, our operating companies could experience increased costs to comply with the rule.
▪Impact on Our Business; Compliance Costs and User Fees: Additional FDA regulatory actions under the FSPTCA could have a material adverse effect on our business, results of operations, cash flows or financial position in various ways. For example, actions (or inaction) by the FDA could:
▪impact the consumer acceptability of tobacco products;
▪discontinue, delay or prevent the sale or distribution of existing, new or modified tobacco products;
▪limit adult tobacco consumer choices;
▪impose restrictions on communications with adult tobacco consumers;
▪create a competitive advantage or disadvantage for certain tobacco companies;
▪impose additional manufacturing, labeling or packaging requirements;
▪impose additional restrictions at retail;
▪result in increased illicit trade in tobacco products; and
▪otherwise significantly increase the cost of doing business.
The FSPTCA imposes user fees on cigarette, cigarette tobacco, smokeless tobacco, cigar and pipe tobacco manufacturers and importers to pay for the cost of regulation and other matters. The FSPTCA does not impose user fees on e-vapor products or oral nicotine pouch manufacturers. The cost of the FDA user fee is allocated first among tobacco product categories subject to FDA user fees and then among manufacturers and importers within each respective category based on their relative market shares, all as prescribed by the FSPTCA and FDA regulations. Payments for user fees are adjusted for several factors, including market share and industry volume. See Liquidity and Capital Resources - Payments Under State Settlement Agreements and FDA Regulation below for a discussion of our FDA user fee payments. In addition, our operating companies' compliance with the FSPTCA's regulatory requirements has resulted, and will continue to result, in additional costs. The amount of additional compliance and related costs has not been material in any given quarter or year-to-date period but could become material, either individually or in the aggregate. The failure to comply with FDA regulatory requirements, even inadvertently, and FDA enforcement actions also could have a material adverse effect on our business, results of operations, cash flows or financial position.
▪Investigation and Enforcement: The FDA has a number of investigatory and enforcement tools available to it, including document requests and other required information submissions, facility inspections, facility closures, examinations and investigations, injunction proceedings, monetary penalties, product withdrawal and recall orders, and product seizures. Investigations or enforcement actions could result in significant costs or otherwise have a material adverse effect on our business, results of operations, cash flows or financial position.
Although the FDA, in conjunction with other federal entities, has increased enforcement activity, insufficient actions against manufacturers, distributors and retailers of tobacco products requiring FDA review for which no PMTA has been submitted have allowed such products to proliferate on the market. In addition, the FDA's failure to clearly define product pathways and issue marketing orders within the statutory review period has resulted in a market with few authorized smoke-free products available to adult tobacco consumers.
Excise Taxes
Tobacco products are subject to substantial excise taxes in the United States. Significant increases in tobacco-related taxes or fees have been proposed or enacted (including with respect to e-vapor products) and are likely to continue to be proposed or enacted at the federal, state and local levels within the United States. The frequency and magnitude of excise tax increases can be influenced by various factors, including the composition of executive and legislative bodies.
Federal, state and local cigarette excise taxes have increased substantially over the past two decades, far outpacing the rate of inflation. Between the end of 1998 and October 27, 2025, the weighted-average state cigarette excise tax increased from $0.36 to $2.01 per pack. Three states (Maryland, Colorado and Rhode Island) increased excise taxes in 2024. As of October 27, 2025, four states (Hawaii, Indiana, Maine and New Jersey) have increased excise taxes in 2025. Various other increases are under consideration or have been proposed.
Many states currently tax MST using an ad valorem method, which is calculated as a percentage of the price of the product, typically the wholesale price. This ad valorem method results in more tax being paid on premium products than is paid on lower-priced products of equal weight. We support legislation to convert ad valorem taxes on MST to a weight-based methodology because, unlike the ad valorem tax, a weight-based tax subjects cans of equal weight to the same tax. As of October 27, 2025, the federal government, 25 states, Puerto Rico, Philadelphia, Pennsylvania and Cook County, Illinois have adopted a weight-based tax methodology for MST.
An increasing number of states and localities are proposing excise taxes on e-vapor products and oral nicotine pouches. As of October 27, 2025, 34 states, the District of Columbia, Puerto Rico and a number of cities and counties have enacted legislation to tax e-vapor products. These taxes are calculated in varying ways and may differ based on the e-vapor product form. Similarly, 18 states and the District of Columbia have enacted legislation to tax oral nicotine pouches.
Tax increases are expected to continue to have an adverse impact on sales of our operating companies' products through lower consumption levels and the potential shift in adult tobacco consumer purchases from premium to non-premium or discount cigarettes, to lower-taxed tobacco products or to counterfeit and contraband products. Lower sales volume and reported share performance of our operating companies' products could have a material adverse effect on our business, results of operations, cash flows or financial position. In addition, substantial excise tax increases on e-vapor and oral nicotine products may negatively impact adult smokers' transition to these products, which could materially adversely affect our innovative tobacco businesses and our ability to achieve our Vision.
International Treaty on Tobacco Control
The World Health Organization's Framework Convention on Tobacco Control (the "FCTC") entered into force in February 2005. As of October 27, 2025, 182 countries, as well as the European Union, have become parties to the FCTC. While the United States is a signatory of the FCTC, it is not a party to the agreement, as the agreement has not been submitted to, or ratified by, the U.S. Senate. The FCTC is the first international public health treaty and its objective is to establish a global agenda for tobacco regulation with the purpose of reducing initiation of tobacco use and encouraging cessation. The treaty recommends (and in certain instances, requires) signatory nations to enact legislation that would address various tobacco-related issues.
There are a number of proposals under consideration by the governing body of the FCTC, some of which call for substantial restrictions on the manufacture, marketing, distribution and sale of tobacco products. It is not possible to predict the outcome of these proposals or the impact of any FCTC actions on legislation or regulation in the United States, either indirectly or as a result of the United States becoming a party to the FCTC, or whether or how these actions might indirectly influence FDA regulation and enforcement.
State Settlement Agreements
As discussed in Note 14, during 1997 and 1998, PM USA and other major domestic cigarette manufacturers entered into the State Settlement Agreements. These settlements require participating manufacturers to make substantial annual payments,
which are adjusted for several factors, including inflation, operating income, market share and industry volume. Higher rates of inflation can increase our financial liability under the State Settlement Agreements as the State Settlement Agreements' inflation calculations require us to apply the higher of 3% or the U.S. Bureau of Labor Statistics' Consumer Price Index for All Urban Consumers ("CPI-U") percentage rate as published in January of each year. As of December 2024, the applicable percentage rate was approximately 2.9% based on the latest CPI-U data. We will continue to monitor the impact of increased inflation on the macroeconomic environment and our businesses.
For a discussion of the impact of the State Settlement Agreements on us, seeLiquidity and Capital Resources - Payments Under State Settlement Agreements and FDA Regulation below and Note 14. The State Settlement Agreements also place numerous requirements and restrictions on participating manufacturers' business operations, including prohibitions and restrictions on the advertising and marketing of cigarettes and smokeless tobacco products. The State Settlement Agreements also place restrictions on the use of brand name sponsorships and brand name non-tobacco products and prohibitions on targeting youth and the use of cartoon characters. In addition, the State Settlement Agreements require companies to affirm corporate principles directed at reducing underage use of cigarettes; impose requirements regarding lobbying activities; limit the industry's ability to challenge certain tobacco control and underage use laws; and provide for the dissolution of certain tobacco-related organizations and place restrictions on the establishment of any replacement organizations.
In November 1998, USSTC entered into the Smokeless Tobacco Master Settlement Agreement (the "STMSA") with the attorneys general of various states and United States territories to resolve the remaining health care cost reimbursement cases initiated against USSTC. The STMSA required USSTC to adopt various marketing and advertising restrictions. USSTC is the only smokeless tobacco manufacturer to sign the STMSA.
Other International, Federal, State and Local Regulation and Governmental and Private Activity
▪International, Federal, State and Local Regulation: Various states and localities have enacted or proposed legislation that imposes restrictions on tobacco products (including cigarettes, smokeless tobacco, cigars, e-vapor products and oral nicotine pouches), such as legislation that (i) prohibits the sale of all tobacco products or certain tobacco categories, such as e-vapor, (ii) prohibits the sale of tobacco products with characterizing flavors, such as menthol cigarettes and flavored e-vapor products, (iii) requires the disclosure of health information separate from or in addition to federally mandated health warnings, (iv) restricts commercial speech or imposes additional restrictions on the marketing or sale of tobacco products and (v) requires manufacturers of e-vapor products to certify that they are in compliance with FDA requirements to be allowed to sell in the state. The legislation varies in terms of the type of tobacco products, the conditions under which such products are or would be restricted or prohibited, and exceptions to the restrictions or prohibitions. As of October 27, 2025, multiple states and localities are considering legislation to ban flavors in one or more tobacco products, and six states (California, Massachusetts, New Jersey, New York, Rhode Island and Utah) and the District of Columbia have passed such legislation. Some states, such as New York and Illinois, exempt certain products that have received FDA market authorization through the PMTA pathway. The legislation in the State of California, which became effective in December 2022, bans the sale of most tobacco products with characterizing flavors, including menthol, mint and wintergreen. The State of Maryland banned e-vapor product flavors other than tobacco and menthol through Maryland Department of Assessments and Taxation rulemaking.
The States of Indiana, Massachusetts and Utah passed legislation capping the amount of nicotine in e-vapor products. As of October 27, 2025, legislation relating to this issue is pending in one other state.
Similar restrictions to those enacted or proposed in various U.S. states and localities on e-vapor and oral nicotine pouch products have been enacted or proposed internationally.
Certain legislation imposing restrictions on tobacco products, such as state laws requiring manufacturers of e-vapor products to certify that they are in compliance with federal law in order to sell products in the state, aligns with our Vision, and we actively engage with lawmakers in support of such legislation. It is possible, however, that legislation, regulation or other governmental action could be enacted or implemented that could have a material adverse impact on our business, results of operations, cash flows or financial position. Such action also could negatively impact adult smokers' transition to smoke-free products, which could materially adversely affect our innovative tobacco businesses and our ability to achieve our Vision. We have challenged and will continue to challenge certain federal, state and local legislation and other governmental action, including through litigation.
▪Federal, State and Local Legislation to Increase the Legal Age to Purchase Tobacco Products: In December 2019, after a number of states and localities proposed and enacted legislation to increase the minimum age to purchase all tobacco products, including e-vapor products, the federal government passed legislation increasing the minimum age to purchase all tobacco products, including e-vapor products, to 21 nationwide. As of October 27, 2025, 44 states, the District of Columbia and Puerto Rico have enacted laws increasing the legal age to purchase tobacco products to 21. Although an increase in the minimum age to purchase tobacco products may have a negative impact on our operating companies' sales volumes, we support and advocate for raising the minimum legal age to purchase all tobacco products to 21 at the federal and state levels.
▪Health Effects of Tobacco Products, Including E-vapor Products: Reports with respect to the health effects of smoking have been publicized for many years, including various reports by the U.S. Surgeon General. We believe that the public should be guided by the messages of the U.S. Surgeon General and public health authorities worldwide in making decisions concerning the use of tobacco products, including e-vapor products. Along with the scientific and public health communities, we continue to study and gather scientific evidence concerning the health effects of e-vapor and other innovative tobacco products. It is not possible to predict the results of ongoing scientific research or the types of future scientific research into the health risks of tobacco exposure and the impact of such research on legislation and regulation. Scientific determinations as to any health risks or negative health consequences associated with the use of e-vapor and other innovative tobacco products could materially adversely affect our innovative tobacco products businesses and our ability to achieve our Vision.
Most jurisdictions within the United States have restricted smoking in public places and some have restricted vaping in public places. Some public health groups have called for, and various jurisdictions have adopted or proposed, bans on smoking and vaping in outdoor places, in private apartments and in cars transporting children.
▪Other Legislation or Governmental Initiatives: In addition to the actions discussed above, other regulatory initiatives affecting the tobacco industry have been adopted or are being considered at the federal level and in a number of state and local jurisdictions. For example, legislation has been introduced or enacted at the state or local level to subject tobacco products to various reporting requirements and performance standards; establish educational campaigns relating to tobacco consumption or tobacco control programs or provide additional funding for governmental tobacco control activities; restrict the sale of tobacco products in certain retail establishments and the sale of tobacco products in certain package sizes; prohibit the sale of tobacco products based on environmental concerns; impose responsibility on manufacturers for the disposal, recycling or other treatment of post-consumer goods such as plastic packaging; require tax stamping of smokeless tobacco products; require the use of state tax stamps using data encryption technology; and further restrict the sale, marketing and advertising of cigarettes and other tobacco products. Such legislation may be subject to constitutional or other challenges on various grounds, which may or may not be successful. In addition, if a pandemic or similar health emergency occurs, state and local governments may reimpose additional health and safety requirements for all businesses, which could result in the potential temporary closure of certain businesses and facilities. It is possible that tobacco manufacturing and other facilities and the facilities of our suppliers, our suppliers' suppliers and our trade partners could be subject to additional government-mandated temporary closures and restrictions.
It is not possible to predict what, if any, additional legislation, regulation or other governmental action will be enacted or implemented (and, if challenged, upheld) relating to the manufacturing, design, packaging, marketing, advertising, sale or use of tobacco products, or the tobacco industry generally. Any such legislation, regulation or other governmental action could have a material adverse impact on our business, results of operations, cash flows or financial position.
▪Governmental Investigations: From time to time, we are subject to governmental investigations on a range of matters. For example, we are, or have been, subject to a number of governmental investigations with respect to our former investment in JUUL, which we divested in March 2023, including the following: (i) the U.S. Federal Trade Commission ("FTC") issued a Civil Investigative Demand to us while conducting its antitrust review of our former investment in JUUL; (ii) the SEC commenced an investigation relating to our acquisition, disclosures and accounting controls in connection with the JUUL investment; and (iii) the New York State Office of the Attorney General and the Commonwealth of Massachusetts Office of the Attorney General, separately, issued independent subpoenas to us seeking documents relating to our former investment in and provision of services to JUUL.
Private Sector Activity on Tobacco Products
A number of retailers, including national chains, have discontinued the sale of all tobacco products, and others have discontinued the sale of e-vapor products. Reasons for the discontinuation include change in corporate policy and, with respect to e-vapor products, reported illnesses and the uncertain regulatory environment. Furthermore, third-party digital platforms, such as app stores, have restricted, and in some cases prohibit, communications with adult tobacco consumers concerning tobacco products. It is possible that if this private sector activity becomes more widespread it could have an adverse effect on our business, results of operations, cash flows or financial position.
Illicit Trade in Tobacco Products
Illicit trade in tobacco products has had, and could continue to have, an adverse impact on our businesses, including the sales volumes and market shares of our operating companies' innovative and smoke-free products and traditional tobacco products. Illicit trade can take many forms, including the sale of counterfeit tobacco products; the sale of tobacco products requiring FDA review for which no PMTA has been submitted; the sale of tobacco products in the United States that are intended for sale outside the country; the sale of untaxed tobacco products over the Internet and by other means designed to avoid the collection of applicable taxes; and diversion into one taxing jurisdiction of tobacco products intended for sale in another. Counterfeit tobacco products, for example, are manufactured by unknown third parties in unregulated environments. Counterfeit versions
of our products can negatively affect adult tobacco consumer experiences with and opinions of those brands. Illicit disposable e-vapor and oral nicotine pouch products may be designed to appeal to youth and are manufactured without scientific standards, exposing consumers to undocumented risks. Illicit trade in tobacco products also harms law-abiding wholesalers and retailers by depriving them of lawful sales and undermines the significant investment we have made in legitimate distribution channels. Moreover, illicit trade in tobacco products results in federal, state and local governments losing tax revenues. Losses in tax revenues can cause such governments to take various actions, including increasing excise taxes, imposing legislative or regulatory requirements, or asserting claims against manufacturers of tobacco products or members of the trade channels through which such tobacco products are distributed and sold, each of which could have an adverse effect on our business, results of operations, cash flows or financial position.
Prohibitionist policies, such as California's ban on the sale of flavored tobacco products, which went into effect in 2022, can have unintended negative consequences, including the proliferation of counterfeit and unregulated products. We actively engage with regulators, state and federal lawmakers, our trade partners and other stakeholders to bring awareness to these issues. When appropriate, we also take legal action to protect our lawful e-vapor product business, such as the lawsuit we filed in federal court in California against manufacturers, distributors and retailers of illicit e-vapor products, which we settled in October 2025. Pursuant to the terms of the settlement, a foreign manufacturer and certain domestic distributors of illicit disposable e-vapor devices are prohibited from selling or shipping flavored e-vapor products to consumers, retailers, wholesalers or distributors located in the State of California and from selling or shipping such products to anyone if they have actual knowledge that the products will ultimately be resold or reshipped to consumers in the State of California.
In June 2024, the U.S. Department of Justice ("DOJ") and the FDA announced the creation of a federal multi-agency task force to combat the illegal marketing and sale of e-vapor products in the United States. The DOJ and the FDA stated that the task force will focus on many topics, such as investigating and prosecuting new criminal, civil, seizure and forfeiture actions under various U.S. laws, including the FSPTCA. While these federal entities have increased enforcement activity against manufacturers, distributors and retailers of tobacco products requiring FDA review for which no PMTA has been submitted, we do not believe these efforts have had a significant impact on the volume of such products on the market.
Price, Availability and Quality of Tobacco, Other Raw Materials, Ingredients and Component Parts
Shifts in crops (such as those driven by economic conditions, adverse weather patterns and natural disasters), government restrictions and mandated prices, production control programs, economic trade sanctions, import duties and tariffs, international trade disruptions, labor disruptions, inflation, geopolitical instability, climate and environmental changes and disruptions due to man-made or natural disasters may increase the cost or reduce the supply or quality of tobacco and other raw materials, ingredients and component parts used to manufacture our operating companies' products. Any significant change in the nature or consequences of these factors could negatively impact our ability to continue manufacturing and marketing existing products, increase our costs or negatively impact adult tobacco consumer product acceptability and have a material adverse effect on our business and profitability.
As with other agricultural commodities, tobacco price, quality and availability can be influenced by variations in weather patterns and natural disasters, including those caused by climate change, and macroeconomic conditions and imbalances in supply and demand, among other factors. For varieties of tobacco only available in limited geographies, government-mandated prices and production control programs, political instability or government prohibitions on the import or export of tobacco in certain countries pose additional risks to price, availability and quality. As consumer demand increases for innovative smoke-free products and decreases for combustible and MST products, the volume of tobacco leaf required for production of these products has decreased, resulting in reduced tobacco leaf demand. Reduced demand for tobacco leaf may result in the reduced supply and availability of domestic tobacco and increased costs, as growers divert resources to other crops or cease farming. Macroeconomic factors, such as tariffs, may exacerbate reductions in demand for tobacco leaf by increasing the cost of purchasing tobacco leaf from a supplier in another country. The unavailability or unacceptability of any one or more particular varieties of tobacco leaf or the unavailability of nicotine extract necessary to manufacture our operating companies' products could negatively impact our ability to continue marketing existing products or impact adult tobacco consumer product acceptability, which could have a material adverse effect on our business and profitability. In addition, the nicotine used in our operating companies' innovative smoke-free products is extracted from tobacco produced in one country. If we are unable to identify alternate sources of nicotine for our operating companies' innovative products, we could be exposed to supply risk.
Current geopolitical and macroeconomic conditions (including tariffs, inflation, high interest rates, labor shortages, supply and demand imbalances and international armed conflict) and adverse weather events have caused and continue to cause worldwide disruptions and delays to supply chains and commercial markets, and have limited access to, and increased the cost of, raw materials, ingredients and component parts (for example, wood tips used in our cigar products and aluminum used in our packaging). As consumer demand increases for innovative smoke-free products and decreases for combustible and MST products, the volume of raw materials, ingredients and component parts required for the production of combustible and MST products has decreased. Reduced demand for raw materials, ingredients and component parts may reduce supply and availability of raw materials, ingredients and component parts as suppliers divert resources to other products or cease producing
these products. Furthermore, challenging economic conditions can create the risk that our suppliers, distributors, logistics providers or other third-party partners suffer financial or operational difficulties, which may impact their ability to provide us with or distribute finished product, raw materials and component parts and services in a timely manner or at all. If we are unable to identify alternate sources of raw materials, ingredients and component parts for our operating companies' products, we could be exposed to supply risk.
We have implemented and continue to implement various strategies to help secure sufficient supplies of raw materials, ingredients and component parts for production, including maintaining inventory levels of certain tobacco varieties that cover several years, purchasing raw materials, ingredients and component parts from disperse geographic regions throughout the world and entering into long-term contracts with some of our tobacco growers and direct material suppliers. To date, the impact on us of changes in the price, availability and quality of tobacco, other raw materials, ingredients and component parts has not been material. However, the effects of current macroeconomic and geopolitical conditions, including tariffs, on prices, availability and quality of such items may continue, which could have a material adverse effect on our business, results of operations, cash flows or financial position.
In addition, government taxes and restrictions and prohibitions on the sale and use of certain materials used in our operating companies' products may limit access to, and increase the costs of, raw materials and component parts and, potentially, impede our ability to sell certain of our products. For example, certain states have passed extended producer responsibility legislation concerning packaging. Because certain of our products' packaging consists of single-use plastics, single-use plastic bans and extended producer responsibility mandates could result in bans on some of our product packaging or our products and adversely impact our costs and revenues. Additional taxes and limitations on the use of certain single-use plastics have been proposed by the U.S. Congress and various state and local governments. These existing and potential future laws and regulations could increase the costs of, and impair our ability to, source certain materials used in the packaging for our products.
Timing of Sales
In the ordinary course of business, we are subject to many influences that can impact the timing of sales to customers, including the timing of holidays and other annual or special events, the timing of promotions, customer incentive programs and customer inventory programs, as well as the actual or speculated timing of pricing actions and tax-driven price increases.
Operating Results
Smokeable Products Segment
Financial Results
The following table summarizes operating results, includes reported and adjusted OCI margins, and provides a reconciliation of reported OCI to adjusted OCI for our smokeable products segment:
| Operating Results | |||||||||||||||||||||||||||||||||||
| For the Nine Months Ended September 30, | For the Three Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| (in millions) | 2025 | 2024 | Change | 2025 | 2024 | Change | |||||||||||||||||||||||||||||
| Net revenues | $ | 15,366 | $ | 15,941 | (3.6) | % | $ | 5,387 | $ | 5,540 | (2.8) | % | |||||||||||||||||||||||
| Excise taxes | (2,299) | (2,630) | (797) | (888) | |||||||||||||||||||||||||||||||
| Revenues net of excise taxes | $ | 13,067 | $ | 13,311 | $ | 4,590 | $ | 4,652 | |||||||||||||||||||||||||||
| Reported OCI | $ | 8,341 | $ | 8,183 | 1.9 | % | $ | 2,942 | $ | 2,937 | 0.2 | % | |||||||||||||||||||||||
| NPM Adjustment Items | (2) | (29) | (2) | (23) | |||||||||||||||||||||||||||||||
| Asset impairment, exit and implementation costs | 38 | - | 12 | - | |||||||||||||||||||||||||||||||
| Tobacco and health and certain other litigation items | 44 | 59 | 4 | 21 | |||||||||||||||||||||||||||||||
| Adjusted OCI | $ | 8,421 | $ | 8,213 | 2.5 | % | $ | 2,956 | $ | 2,935 | 0.7 | % | |||||||||||||||||||||||
|
Reported OCI margins (1)
|
63.8 | % | 61.5 | % | 2.3 pp | 64.1 | % | 63.1 | % | 1.0 pp | |||||||||||||||||||||||||
|
Adjusted OCI margins (1)
|
64.4 | % | 61.7 | % | 2.7 pp | 64.4 | % | 63.1 | % | 1.3 pp | |||||||||||||||||||||||||
(1)Reported and adjusted OCI margins are calculated as reported and adjusted OCI, respectively, divided by revenues net of excise taxes.
Nine Months Ended September 30, 2025 Compared with Nine Months Ended September 30, 2024
Net revenues, which include excise taxes billed to customers, decreased $575 million (3.6%), due primarily to lower shipment volume ($1,944 million), partially offset by higher pricing ($1,327 million), which includes higher promotional investments.
Reported OCI increased $158 million (1.9%), due primarily to higher pricing, which includes higher promotional investments, lower per unit settlement charges, lower costs ($33 million) and lower tobacco and health and certain other litigation items ($15 million),partially offset bylower shipment volume ($1,308 million), costs associated with the Initiative in 2025 ($38 million) and lower NPM adjustment items ($27 million).
Adjusted OCI increased $208 million (2.5%), due primarily to higher pricing, which includes higher promotional investments, lower per unit settlement charges and lower costs, partially offset by lower shipment volume.
Three Months Ended September 30, 2025 Compared with Three Months Ended September 30, 2024
Net revenues, which include excise taxes billed to customers, decreased $153 million (2.8%), due primarily to lower shipment volume ($530 million), partially offset by higher pricing ($359 million), which includes higher promotional investments.
Reported OCI increased $5 million (0.2%), due primarily to higher pricing, which includes higher promotional investments, lower per unit settlement charges and lower tobacco and health and certain other litigation items ($17 million),partially offset bylower shipment volume ($366 million), lower NPM adjustment items ($21 million) and higher costs ($20 million).
Adjusted OCI increased $21 million (0.7%), due primarily to higher pricing, which includes higher promotional investments, lower per unit settlement charges, partially offset by lower shipment volume and higher costs.
Shipment Volume and Retail Share Results
The following table summarizes our smokeable products segment's shipment volume performance:
| Shipment Volume | |||||||||||||||||||||||||||||||||||
| For the Nine Months Ended September 30, | For the Three Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| (sticks in millions) | 2025 | 2024 | Change | 2025 | 2024 | Change | |||||||||||||||||||||||||||||
| Cigarettes: | |||||||||||||||||||||||||||||||||||
| Marlboro | 41,671 | 47,411 | (12.1) | % | 14,235 | 16,122 | (11.7) | % | |||||||||||||||||||||||||||
| Other premium | 2,141 | 2,397 | (10.7) | % | 744 | 824 | (9.7) | % | |||||||||||||||||||||||||||
| Discount | 2,650 | 2,181 | 21.5 | % | 1,213 | 695 | 74.5 | % | |||||||||||||||||||||||||||
| Total cigarettes | 46,462 | 51,989 | (10.6) | % | 16,192 | 17,641 | (8.2) | % | |||||||||||||||||||||||||||
| Cigars: | |||||||||||||||||||||||||||||||||||
| Black & Mild | 1,335 | 1,320 | 1.1 | % | 452 | 443 | 2.0 | % | |||||||||||||||||||||||||||
| Other | 2 | 3 | (33.3) | % | 1 | 1 | - | % | |||||||||||||||||||||||||||
| Total cigars | 1,337 | 1,323 | 1.1 | % | 453 | 444 | 2.0 | % | |||||||||||||||||||||||||||
| Total smokeable products | 47,799 | 53,312 | (10.3) | % | 16,645 | 18,085 | (8.0) | % | |||||||||||||||||||||||||||
Note: Cigarettes shipment volume includes Marlboro; Other premium brands, such as Virginia Slimsand Parliament; and Discount brands, which include L&Mand Basic. Cigarettes volume includes units sold as well as promotional units but excludes units not considered domestic, which are not material to our smokeable products segment.
The following table summarizes our cigarettes retail share performance:
| Retail Share | |||||||||||||||||||||||||||||||||||
| For the Nine Months Ended September 30, | For the Three Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | Percentage Point Change | 2025 | 2024 | Percentage Point Change | ||||||||||||||||||||||||||||||
| Cigarettes: | |||||||||||||||||||||||||||||||||||
| Marlboro | 40.8 | % | 41.9 | % | (1.1) | 40.4 | % | 41.6 | % | (1.2) | |||||||||||||||||||||||||
| Other premium | 2.2 | 2.3 | (0.1) | 2.2 | 2.2 | - | |||||||||||||||||||||||||||||
| Discount | 2.2 | 1.9 | 0.3 | 2.8 | 1.9 | 0.9 | |||||||||||||||||||||||||||||
| Total cigarettes | 45.2 | % | 46.1 | % | (0.9) | 45.4 | % | 45.7 | % | (0.3) | |||||||||||||||||||||||||
Note: Retail share results for cigarettes are based on data from Circana, LLC ("Circana"), as well as Management Science Associates, Inc. ("MSAi"). Circana maintains a blended retail service that uses a sample of stores and certain wholesale shipments to project market share and depict share trends. This service tracks sales in the food, drug, mass merchandisers, convenience, military, dollar store and club trade classes. For other trade classes selling cigarettes, retail share is based on shipments from wholesalers to retailers through the Store Tracking Analytical Reporting System, as provided by MSAi. This service is not designed to capture sales through other channels, including the internet, direct mail and some tax-advantaged outlets. It is the standard practice of retail services to periodically refresh their retail scan services, which could restate retail share results that were previously released in these services.
For a discussion of volume trends and factors that impact volume and retail share performance, see Trends and Developmentsand Operating Results by Business Segment - Business Environment - Summary above.
Nine Months Ended September 30, 2025 Compared with the Nine Months Ended September 30, 2024
Our smokeable products segment's reported domestic cigarettes shipment volume decreased 10.6%, driven primarily by the industry's decline rate (impacted by the continued growth of flavored disposable e-vapor products, the majority of which we believe have evaded the regulatory process, and discretionary income pressures on adult tobacco consumers), retail share losses and calendar differences, partially offset by trade inventory movements. When adjusted for calendar differences and trade inventory movements, our smokeable products segment domestic cigarette shipment volume decreased by an estimated 10.5%. When adjusted for trade inventory movements, calendar differences and other factors, total estimated domestic cigarette industry volume decreased by an estimated 8.5%.
Shipments of premium cigarettes accounted for 94.3% and 95.8% of our smokeable products segment's reported domestic cigarettes shipment volume for the nine months ended September 30, 2025 and 2024, respectively.
Marlboroshare of the premium segment was 59.5%, an increase of 0.2 share points.
Total cigarettes industry discount category retail share was 31.4%, an increase of 2.0 share points, primarily due to continued discretionary income pressures on adult tobacco consumers.
Three Months Ended September 30, 2025 Compared with the Three Months Ended September 30, 2024
Our smokeable products segment's reported domestic cigarettes shipment volume decreased 8.2%, driven primarily by the industry's decline rate (impacted by the continued growth of flavored disposable e-vapor products, the majority of which we believe have evaded the regulatory process, and discretionary income pressures on adult tobacco consumers) and retail share losses, partially offset by trade inventory movements. When adjusted for trade inventory movements and calendar differences, our smokeable products segment domestic cigarette shipment volume decreased by an estimated 9%. When adjusted for trade inventory movements, calendar differences and other factors, total estimated domestic cigarette industry volume decreased by an estimated 8%.
Shipments of premium cigarettes accounted for 92.5% and 96.1% of our smokeable products segment's reported domestic cigarettes shipment volume for the three months ended September 30, 2025 and 2024, respectively.
Marlboroshare of the premium segment was 59.6%, an increase of 0.3 share points versus the prior year and 0.1 share point sequentially.
Total cigarettes industry discount category retail share was 32.2%, an increase of 2.4 share points versus the prior year and 1.0 share point sequentially, primarily due to continued discretionary income pressures on adult tobacco consumers.
For a discussion regarding discount category dynamics in 2025, the growth of flavored disposable e-vapor products and the economic conditions that impact adult tobacco consumer purchasing behavior, see Trends and Developmentsand Operating Results by Business Segment - Business Environment - Summary above.
Pricing Actions
PM USA and Middleton executed the following pricing actions during 2025 and 2024:
▪Effective July 20, 2025, PM USA increased the list price of Marlboro(excluding Mainline Menthol and 72s Menthol) and L&Mby $0.17 per pack. PM USA also increased the list price of all its other premium cigarette brands by $0.22 per pack.
▪Effective April 20, 2025, Middleton increased various list prices across substantially all of its cigar brands resulting in a weighted-average increase of approximately $0.14 per five-pack.
▪Effective April 13, 2025, PM USA increased the list price of Marlboro(excluding Mainline Menthol and 72s Menthol) and L&Mby $0.20 per pack. PM USA also increased the list price of all its other premium cigarette brands by $0.25 per pack.
▪Effective January 19, 2025, PM USA increased the list price ofMarlboro(excluding Mainline Menthol and 72s Menthol) and L&Mby $0.17 per pack. PM USA decreased the list price of MarlboroBlack by $0.28 per pack. PM USA also increased the list price of all its other premium cigarette brands by $0.22 per pack.
▪Effective October 20, 2024, PM USA increased the list price of Marlboro (excluding Mainline Menthol and 72s Menthol), L&M and Basicby $0.17 per pack. PM USA also increased the list price of all its other cigarette brands by $0.22 per pack.
▪Effective October 6, 2024, Middleton increased various list prices across substantially all of its cigar brands resulting in a weighted-average increase of approximately $0.13 per five-pack.
▪Effective July 14, 2024, PM USA increased the list price of Marlboro (excluding Mainline Menthol and 72s Menthol), L&M and Basicby $0.17 per pack. PM USA also increased the list price of all its other cigarette brands by $0.22 per pack.
▪Effective April 21, 2024, Middleton increased various list prices across substantially all of its cigar brands resulting in a weighted-average increase of approximately $0.16 per five-pack.
▪Effective April 14, 2024, PM USA increased the list price of Marlboro (excluding Mainline Menthol and 72s Menthol), L&M and Basicby $0.20 per pack. PM USA also increased the list price of all its other cigarette brands by $0.25 per pack.
▪Effective January 14, 2024, PM USA increased the list price of Marlboro (excluding Mainline Menthol and 72s Menthol), L&M and Basicby $0.15 per pack. PM USA also increased the list price of all its other cigarette brands by $0.20 per pack.
In addition:
▪Effective October 12, 2025, PM USA increased the list price of Marlboro(excluding Mainline Menthol and 72s Menthol) and L&Mby $0.17 per pack. PM USA also increased the list price of all its other premium cigarette brands by $0.22 per pack.
Oral Tobacco Products Segment
Financial Results
The following table summarizes operating results, includes reported and adjusted OCI margins, and provides a reconciliation of reported OCI to adjusted OCI for our oral tobacco products segment:
| Operating Results | |||||||||||||||||||||||||||||||||||
| For the Nine Months Ended September 30, | For the Three Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| (in millions) | 2025 | 2024 | Change | 2025 | 2024 | Change | |||||||||||||||||||||||||||||
| Net revenues | $ | 2,096 | $ | 2,084 | 0.6 | % | $ | 689 | $ | 722 | (4.6) | % | |||||||||||||||||||||||
| Excise taxes | (74) | (76) | (24) | (27) | |||||||||||||||||||||||||||||||
| Revenues net of excise taxes | $ | 2,022 | $ | 2,008 | $ | 665 | $ | 695 | |||||||||||||||||||||||||||
| Reported OCI | $ | 1,390 | $ | 996 | 39.6 | % | $ | 459 | $ | 464 | (1.1) | % | |||||||||||||||||||||||
| Asset impairment, exit and implementation costs | 5 | 354 | 1 | - | |||||||||||||||||||||||||||||||
| Adjusted OCI | $ | 1,395 | $ | 1,350 | 3.3 | % | $ | 460 | $ | 464 | (0.9) | % | |||||||||||||||||||||||
|
Reported OCI margins (1)
|
68.7 | % | 49.6 | % | 19.1 pp | 69.0 | % | 66.8 | % | 2.2 pp | |||||||||||||||||||||||||
|
Adjusted OCI margins (1)
|
69.0 | % | 67.2 | % | 1.8 pp | 69.2 | % | 66.8 | % | 2.4 pp | |||||||||||||||||||||||||
(1)Reported and adjusted OCI margins are calculated as reported and adjusted OCI, respectively, divided by revenues net of excise taxes.
Nine Months Ended September 30, 2025 Compared with Nine Months Ended September 30, 2024
Net revenues, which include excise taxes billed to customers, increased $12 million (0.6%), as higher pricing ($192 million), which includes higher promotional investments, was partially offset by lower shipment volume and a higher percentage of on!shipment volume relative to MST ("volume/mix") ($180 million).
Reported OCI increased $394 million (39.6%), due primarily to a non-cash impairment of the Skoaltrademark ($354 million) in 2024, higher pricing, which includes higher promotional investments, and lower costs ($29 million), partially offset by lower volume/mix ($176 million).
Adjusted OCI increased $45 million (3.3%), due to higher pricing, which includes higher promotional investments, and lower costs, partially offset by lower volume/mix.
Three Months Ended September 30, 2025 Compared with Three Months Ended September 30, 2024
Net revenues, which include excise taxes billed to customers, decreased $33 million (4.6%) due primarily to lower volume/mix ($97 million), partially offset by higher pricing ($64 million).
Reported OCI decreased $5 million (1.1%), due primarily to lower volume/mix ($86 million), partially offset by higher pricing and lower costs ($18 million).
Adjusted OCI decreased $4 million (0.9%), due primarily to lower volume/mix, partially offset by higher pricing and lower costs.
Shipment Volume and Retail Share Results
The following table summarizes our oral tobacco products segment's shipment volume performance:
| Shipment Volume | |||||||||||||||||||||||||||||||||||
| For the Nine Months Ended September 30, | For the Three Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| (cans in millions) | 2025 | 2024 | Change | 2025 | 2024 | Change | |||||||||||||||||||||||||||||
| Copenhagen | 274.4 | 304.4 | (9.9) | % | 88.8 | 101.4 | (12.4) | % | |||||||||||||||||||||||||||
| Skoal | 96.6 | 111.6 | (13.4) | % | 31.0 | 37.4 | (17.1) | % | |||||||||||||||||||||||||||
| on! | 133.6 | 116.4 | 14.8 | % | 42.2 | 41.9 | 0.7 | % | |||||||||||||||||||||||||||
|
Other
|
47.6 | 50.0 | (4.8) | % | 16.2 | 16.4 | (1.2) | % | |||||||||||||||||||||||||||
| Total oral tobacco products | 552.2 | 582.4 | (5.2) | % | 178.2 | 197.1 | (9.6) | % | |||||||||||||||||||||||||||
Note: Other primarily includes Red Sealand Husky. Oral tobacco products shipment volume includes cans sold, as well as promotional units, but excludes non-domestic volume, which is currently not material to our oral tobacco products segment. New types of oral tobacco products, as well as new packaging configurations of existing oral tobacco products, may or may not be equivalent to existing MST products on a can-for-can basis. To calculate volumes of cans shipped, one can of oral nicotine pouches, irrespective of the number of pouches in the can, is assumed to be equivalent to one can of MST.
We have restated prior period retail share performance data and estimated industry volume to reflect the inclusion of synthetic oral nicotine pouch products. Prior to 2025, our reported oral tobacco segment retail share performance data excluded synthetic oral nicotine pouch products. Throughout 2024 and into the first quarter of 2025, we tracked the quarterly sequential growth of synthetic oral nicotine pouch products in various traditional tobacco retailers. Based on the consistency of this trend, beginning in the first quarter of 2025 our reported oral tobacco products segment retail share performance data and category industry volume estimates have been updated to include synthetic oral nicotine pouch products.
The following table summarizes our oral tobacco products segment's retail restated share performance:
| Retail Share | |||||||||||||||||||||||||||||||||||
| For the Nine Months Ended September 30, | For the Three Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | Percentage Point Change | 2025 | 2024 | Percentage Point Change | ||||||||||||||||||||||||||||||
| Copenhagen | 15.8 | % | 19.3 | % | (3.5) | 14.6 | % | 18.5 | % | (3.9) | |||||||||||||||||||||||||
| Skoal | 6.1 | 7.7 | (1.6) | 5.6 | 7.3 | (1.7) | |||||||||||||||||||||||||||||
| on! | 8.7 | 7.9 | 0.8 | 8.7 | 8.8 | (0.1) | |||||||||||||||||||||||||||||
| Other | 2.3 | 2.6 | (0.3) | 2.2 | 2.6 | (0.4) | |||||||||||||||||||||||||||||
| Total oral tobacco products | 32.9 | % | 37.5 | % | (4.6) | 31.1 | % | 37.2 | % | (6.1) | |||||||||||||||||||||||||
Note: Our oral tobacco products segment's retail share results exclude non-domestic volume, which is currently not material to our oral tobacco products segment. Retail share results for oral tobacco products are based on data from Circana, a tracking service that uses a sample of stores to project market share and depict share trends. This service tracks sales in the food, drug, mass merchandisers, convenience, military, dollar store and club trade classes on the number of cans sold. Oral tobacco products are defined by Circana as domestic oral products, in the form of MST and all oral nicotine pouch products (inclusive of tobacco-derived and synthetic oral nicotine products). New types of oral tobacco products, as well as new packaging configurations of existing oral tobacco products, may or may not be equivalent to existing MST products on a can-for-can basis. For example, one can of oral nicotine pouches, irrespective of the number of pouches in the can, is assumed to be equivalent to one can of MST. Because this service represents retail share performance only in key trade channels, it should not be considered a precise measurement of actual retail share. It is the standard practice of retail services to periodically refresh their retail scan services, which could restate retail share results that were previously released in these services.
For a discussion of volume trends and factors that impact volume and retail share performance, see Trends and Developmentsand Operating Results by Business Segment - Business Environment - Summaryabove.
Nine Months Ended September 30, 2025 Compared with Nine Months Ended September 30, 2024
Our oral tobacco products segment's reported domestic shipment volume decreased 5.2%, driven primarily by retail share losses, calendar differences and other factors, partially offset by the industry's growth rate and trade inventory movements. When adjusted for calendar differences and trade inventory movements, our oral tobacco products segment's reported domestic shipment volume decreased by an estimated 3.5%.
Total oral tobacco products category industry volume increased by an estimated 14.5% over the six months ended September 30, 2025, driven primarily by growth in oral nicotine pouches, partially offset by declines in MST volumes.
The U.S. nicotine pouch category grew to 52.4% of the U.S. oral tobacco category, an increase of 10.0 share points versus the prior year. In addition, on!'s share of the nicotine pouch category was 16.6%, a decrease of 2.1 share points versus the prior year.
Three Months Ended September 30, 2025 Compared with Three Months Ended September 30, 2024
Our oral tobacco products segment's reported domestic shipment volume decreased 9.6%, driven primarily by retail share losses, calendar differences, trade inventory movements and other factors, partially offset by the industry's growth rate. When adjusted for calendar differences and trade inventory movements, our oral tobacco products segment's reported domestic shipment volume decreased by an estimated 5.5%.
Total U.S. oral tobacco category share for on!nicotine pouches was 8.7%, a decrease of 0.1 share point versus the prior year and unchanged sequentially.
The U.S. nicotine pouch category grew to 55.7% of the U.S. oral tobacco category, an increase of 11.1 share points versus the prior year. In addition, on!'s share of the nicotine pouch category was 15.6%, a decrease of 4.1 share points versus the prior year.
For a discussion regarding the growth of oral nicotine pouch products and the related impact on the MST category and economic conditions that impact adult tobacco consumer purchasing behavior, see Trends and Developmentsand Operating Results by Business Segment - Business Environment - Summaryabove.
Pricing Actions
USSTC and Helix executed the following pricing actions during 2025 and 2024:
▪Effective July 22, 2025, USSTC increased the list price on its Copenhagen andRed Seal brands by $0.12 per can. USSTC also increased the list price on its Skoalbrands by $0.17 per can and Huskybrands by $0.25 per can.
▪Effective April 22, 2025, USSTC increased the list price on its Copenhagen andRed Seal brands by $0.12 per can. USSTC also increased the list price on its Skoalbrands by $0.17 per can.
▪Effective February 23, 2025, Helix increased the list price on its on! brand by $0.20 per can.
▪Effective January 21, 2025, USSTC increased the list price on its Copenhagen andRed Seal brands by $0.12 per can. USSTC also increased the list price on its Skoalbrands by $0.17 per can.
▪Effective August 25, 2024, Helix increased the list price on its on! brand by $0.10 per can.
▪Effective July 23, 2024, USSTC increased the list price on its Copenhagen, Skoal and Red Sealbrands by $0.10 per can.
▪Effective April 23, 2024, USSTC increased the list price on its Copenhagen, Skoal and Red Sealbrands by $0.10 per can.
▪Effective January 23, 2024, USSTC increased the list price on its Copenhagen, Skoal and Red Sealbrands by $0.11 per can.
Liquidity and Capital Resources
We are a holding company that is primarily dependent on the capital resources of our subsidiaries to satisfy our liquidity requirements. Our access to the operating cash flows of our subsidiaries consists of cash received from the payment of dividends and distributions, and the payment of interest on intercompany loans. At September 30, 2025, our significant subsidiaries were not limited by contractual obligations in their ability to pay cash dividends or make other distributions with respect to their equity interests. In addition, we receive cash dividends on our interest in ABI and will continue to do so as long as we hold shares in ABI and ABI pays dividends.
At September 30, 2025, we had $3.5 billion of cash and cash equivalents. In addition to having access to the operating cash flows of our subsidiaries, our capital resources include access to credit markets in the form of commercial paper, availability under our $3.0 billion senior unsecured 5-year revolving credit agreement ("Credit Agreement"), which we use for general corporate purposes, and access to credit markets through the issuance of long-term senior unsecured notes. For additional information, see Capital Markets and Other Mattersbelow.
In addition to funding current operations, we primarily use our net cash from operating activities for payment of dividends, share repurchases under our share repurchase programs, repayment of debt, acquisitions of or investments in businesses and assets and capital expenditures.
We believe our cash and cash equivalents balance, along with our future cash flows from operations, capacity for borrowings under our Credit Agreement and access to credit and capital markets, provide sufficient liquidity to meet the needs of our business operations and to satisfy our projected cash requirements for the foreseeable future, including the next 12 months.
Capital Markets and Other Matters
Credit Ratings- Our cost and terms of financing and our access to commercial paper markets may be impacted by applicable credit ratings. The impact of credit ratings on the cost of borrowings under our Credit Agreement is discussed in Note 12. Debt.
At September 30, 2025, the credit ratings and outlook for our indebtedness by major credit rating agencies were:
| Short-term Debt | Long-term Debt | Outlook | |||||||||||||||
| Moody's Investors Service, Inc. ("Moody's") | P-2 | A3 | Stable | ||||||||||||||
| Standard & Poor's Financial Services LLC ("S&P") | A-2 | BBB+ | Stable | ||||||||||||||
| Fitch Ratings Inc. | F2 | BBB | Stable | ||||||||||||||
Credit Lines - From time to time, we have short-term borrowing needs to meet our working capital requirements arising from the timing of payments under State Settlement Agreements, quarterly income tax payments and quarterly dividend payments, and generally use our commercial paper program to meet those needs.
At September 30, 2025, we had availability under our Credit Agreement for borrowings of up to an aggregate principal amount of $3.0 billion, and we were in compliance with the covenants in our Credit Agreement. We monitor the credit quality of our bank group and do not know of any potential non-performing credit provider in that group. For further discussion on borrowing arrangements, see Note 12.
Long-Term Debt- At September 30, 2025 and December 31, 2024, our total long-term debt was $25.7 billion and $24.9 billion, respectively. In the first and third quarters of 2025, we issued senior unsecured notes each in the aggregate principal amount of $1.0 billion ($2.0 billion total). In addition, in the second quarter of 2025, we repaid in full at maturity our senior unsecured notes in the aggregate principal amounts of $750 million and €750 million ($857 million), respectively. As a result of the issuances and repayments, the weighted-average coupon interest rate on our total long-term debt increased to approximately
4.5% at September 30, 2025 from approximately 4.3% at December 31, 2024. For further discussion of long-term debt, see Note 12.
At September 30, 2025, our debt-to-Consolidated net earnings and debt-to-Consolidated EBITDA ratios were calculated as follows:
|
For the Twelve Months Ended September 30, 2025 (1)
|
||||||||
| (in millions) | ||||||||
| Consolidated net earnings | $ | 8,869 | ||||||
| Interest and other debt expense, net | 1,070 | |||||||
| Provision for income taxes | 1,784 | |||||||
| Depreciation and amortization | 285 | |||||||
| EBITDA | 12,008 | |||||||
| (Income) loss from investments in equity securities and noncontrolling interest, net | (520) | |||||||
| Dividends from less than 50% owned affiliates | 181 | |||||||
| Exit costs | 38 | |||||||
| Impairment of goodwill | 873 | |||||||
| Fair value adjustment for NJOY Transaction contingent payments | 25 | |||||||
| Consolidated EBITDA | $ | 12,605 | ||||||
|
Current portion of long-term debt (2)
|
$ | 1,569 | ||||||
|
Long-term debt (2)
|
24,132 | |||||||
| Debt | $ | 25,701 | ||||||
| Debt / Consolidated net earnings | 2.9 | |||||||
| Debt / Consolidated EBITDA | 2.0 | |||||||
(1) Calculated for the four most recent fiscal quarters.
(2) Balance at September 30, 2025.
Guarantees and Other Similar Matters - As discussed in Note 14, we had unused letters of credit obtained in the ordinary course of business and guarantees (including third-party guarantees) outstanding at September 30, 2025. From time to time, we also issue lines of credit to affiliated entities. As part of the supplier financing program further discussed in Note 3. Supplier Financing, Altria guarantees the financial obligations of ALCS under the financing program agreement. In addition, as discussed below in Supplemental Guarantor Financial Information and in Note 12, PM USA guarantees our obligations under our outstanding debt securities, any borrowings under our Credit Agreement and any amounts outstanding under our commercial paper program. These items have not had, and are not expected to have, a significant impact on our liquidity.
Payments Under State Settlement Agreements and FDA Regulation - PM USA has entered into State Settlement Agreements with the states, the District of Columbia and certain U.S. territories that call for certain payments. In addition, PM USA, Middleton and USSTC are subject to quarterly user fees imposed by the FDA as a result of the FSPTCA. For further discussion of the State Settlement Agreements, see Health Care Cost Recovery Litigationin Note 14.
Based on current agreements, estimated annual industry volume decline rates, estimated operating income, estimated market share and inflation, the estimated amounts that we may charge to cost of sales for payments related to State Settlement Agreements and FDA user fees are $3.0 billion on average for the next three years. The estimated amount excludes the potential impact of any NPM Adjustment Items.
The estimated amounts due under the State Settlement Agreements charged to cost of sales in each year are generally paid in April of the following year. The amounts charged to cost of sales for FDA user fees are generally paid in the quarter in which the fees are incurred. We paid approximately $2.9 billion and $3.3 billion for the nine months ended September 30, 2025 and 2024, respectively, in connection with the State Settlement Agreements and FDA user fees, primarily all of which was paid in the second quarter of each period. We recorded $2.5 billion and $2.9 billion of charges to cost of sales for the nine months ended September 30, 2025 and 2024, respectively, and $0.9 billion of charges to cost of sales for each of the three months ended September 30, 2025 and 2024, in connection with the State Settlement Agreements and FDA user fees. As previously stated, the payments due under the terms of the State Settlement Agreements and FDA user fees are subject to adjustment for several factors, including volume, operating income, market share and inflation. The future payment amounts discussed above are estimates, and actual payment amounts will differ to the extent underlying assumptions differ from actual future results. For
further discussion on the potential impact of inflation on future payments, see Operating Results by Business Segment - Business Environment - State Settlement Agreementsabove.
Litigation-Related Deposits and Payments- With respect to certain adverse verdicts currently on appeal, to obtain stays of judgments pending appeals, as of September 30, 2025, PM USA had posted appeal bonds totaling $24 million, which have been collateralized with restricted cash that is included in assets on our condensed consolidated balance sheet.
Litigation is subject to uncertainty, and an adverse outcome or settlement of litigation could have a material adverse effect on our results of operations, cash flows or financial position in a particular fiscal quarter or fiscal year, as more fully disclosed in Note 14.
Equity and Dividends
During the first nine months of 2025 and 2024, we paid dividends of $5,175 million and $5,108 million, respectively, an increase of 1.3%, reflecting a higher dividend rate, partially offset by fewer shares outstanding as a result of shares we repurchased under our share repurchase programs.
In August 2025, our Board of Directors ("Board of Directors" or "Board") approved a 3.9% increase in the quarterly dividend rate to $1.06 per share of our common stock versus the previous rate of $1.02 per share. Our current annualized dividend rate is $4.24 per share. We have a progressive dividend goal targeting mid-single digits dividend growth annually through 2028. Future dividend payments remain subject to the discretion of our Board.
In October 2025, the Board authorized a $1.0 billion expansion of our existing share repurchase program from $1.0 billion to $2.0 billion, which now expires on December 31, 2026. For further discussion of our share repurchase programs, see Note 1. Background and Basis of Presentationand Part II, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds of this Form 10-Q.
Financial Review
Cash Provided by/Used in Operating Activities
During the first nine months of 2025, net cash provided by operating activities was $6,019 million compared with $5,413 million during the first nine months of 2024. This increase was due primarily to lower payments for State Settlement Agreements, excise taxes and litigation, and a portion of the NJOY contingent payments in 2024 ($140 million), partially offset by lower net revenues.
We had a working capital deficit at September 30, 2025 and December 31, 2024, and believe we have the ability to fund working capital deficits with cash provided by operating activities, borrowings under our Credit Agreement and access to the credit and capital markets.
Cash Provided by/Used in Investing Activities
During the first nine months of 2025, net cash used in investing activities was $139 million compared with net cash provided by investing activities of $2,238 million during the first nine months of 2024. This change was due primarily to proceeds from the ABI Transaction in 2024.
Cash Provided by/Used in Financing Activities
During the first nine months of 2025, net cash used in financing activities was $5,542 million compared with $9,444 million during the first nine months of 2024. This decrease was due to lower share repurchases, issuances of long-term debt in 2025 and a portion of the NJOY contingent payments in 2024 ($110 million), partially offset by higher repayments of long-term debt.
New Accounting Guidance Not Yet Adopted
See Note 15. New Accounting Guidance Not Yet Adopted for a discussion of issued accounting guidance applicable to, but not yet adopted by, us.
Contingencies
See Note 14 for a discussion of contingencies.
Supplemental Guarantor Financial Information
PM USA ("Guarantor"), which is a 100% owned subsidiary of Altria Group, Inc. ("Parent"), has guaranteed the Parent's obligations under its outstanding debt securities, borrowings under its Credit Agreement and amounts outstanding under its commercial paper program ("Guarantees"). Pursuant to the Guarantees, the Guarantor fully and unconditionally guarantees, as primary obligor, the payment and performance of the Parent's obligations under the guaranteed debt instruments ("Obligations"), subject to release under certain customary circumstances as noted below.
The Guarantees provide that the Guarantor guarantees the punctual payment when due, whether at stated maturity, by acceleration or otherwise, of the Obligations. The liability of the Guarantor under the Guarantees is absolute and unconditional irrespective of: any lack of validity, enforceability or genuineness of any provision of any agreement or instrument relating thereto; any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to departure from any agreement or instrument relating thereto; any exchange, release or non-perfection of any collateral, or any release or amendment or waiver of or consent to departure from any other guarantee, for all or any of the Obligations; or any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Parent or the Guarantor.
Under applicable provisions of federal bankruptcy law or comparable provisions of state fraudulent transfer law, the Guarantees could be voided, or claims in respect of the Guarantees could be subordinated to the debts of the Guarantor, if, among other things, the Guarantor, at the time it incurred the Obligations evidenced by the Guarantees:
▪received less than reasonably equivalent value or fair consideration therefor; and
▪either:
▪was insolvent or rendered insolvent by reason of such occurrence;
▪was engaged in a business or transaction for which the assets of the Guarantor constituted unreasonably small capital; or
▪intended to incur, or believed that it would incur, debts beyond its ability to pay such debts as they mature.
In addition, under such circumstances, the payment of amounts by the Guarantor pursuant to the Guarantees could be voided and required to be returned to the Guarantor, or to a fund for the benefit of the Guarantor, as the case may be.
The measures of insolvency for purposes of the foregoing considerations will vary depending upon the law applied in any proceeding with respect to the foregoing. Generally, however, the Guarantor would be considered insolvent if:
▪the sum of its debts, including contingent liabilities, was greater than the saleable value of its assets, all at a fair valuation;
▪the present fair saleable value of its assets was less than the amount that would be required to pay its probable liability on its existing debts, including contingent liabilities, as they become absolute and mature; or
▪it could not pay its debts as they become due.
To the extent the Guarantees are voided as a fraudulent conveyance or held unenforceable for any other reason, the holders of the guaranteed debt obligations would not have any claim against the Guarantor and would be creditors solely of the Parent.
The obligations of the Guarantor under the Guarantees are limited to the maximum amount as will not result in the Guarantor's obligations under the Guarantees constituting a fraudulent transfer or conveyance, after giving effect to such maximum amount and all other contingent and fixed liabilities of the Guarantor that are relevant under Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to the Guarantees. For this purpose, "Bankruptcy Law" means Title 11, U.S. Code, or any similar federal or state law for the relief of debtors.
The Guarantor will be unconditionally released and discharged from the Obligations upon the earliest to occur of:
▪the date, if any, on which the Guarantor consolidates with or merges into the Parent or any successor;
▪the date, if any, on which the Parent or any successor consolidates with or merges into the Guarantor;
▪the payment in full of the Obligations pertaining to such Guarantees; and
▪the rating of the Parent's long-term senior unsecured debt by S&P of A or higher.
The Parent is a holding company; therefore, its access to the operating cash flows of its wholly owned subsidiaries consists of cash received from the payment of dividends and distributions, and the payment of interest on intercompany loans by its subsidiaries. Neither the Guarantor nor other 100% owned subsidiaries of the Parent that are not guarantors of the debt ("Non-Guarantor Subsidiaries") are limited by contractual obligations on their ability to pay cash dividends or make other distributions with respect to their equity interests.
The following tables include summarized financial information for the Parent and the Guarantor. Transactions between the Parent and the Guarantor (including investment and intercompany balances as well as equity earnings) have been eliminated. The Parent's and the Guarantor's intercompany balances with Non-Guarantor Subsidiaries have been presented separately. This summarized financial information is not intended to present the financial position or results of operations of the Parent or the Guarantor in accordance with GAAP.
Summarized Balance Sheets
(in millions of dollars)
| Parent | Guarantor | |||||||||||||||||||||||||
| September 30, 2025 | December 31, 2024 | September 30, 2025 | December 31, 2024 | |||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||
|
Due from Non-Guarantor Subsidiaries
|
$ | - | $ | - | $ | 334 | $ | 334 | ||||||||||||||||||
| Other current assets | 3,628 | 3,215 | 939 | 658 | ||||||||||||||||||||||
| Total current assets | $ | 3,628 | $ | 3,215 | $ | 1,273 | $ | 992 | ||||||||||||||||||
|
Due from Non-Guarantor Subsidiaries
|
$ | 6,561 | $ | 6,561 | $ | - | $ | - | ||||||||||||||||||
| Other assets | 8,152 | 8,005 | 1,191 | 1,246 | ||||||||||||||||||||||
| Total non-current assets | $ | 14,713 | $ | 14,566 | $ | 1,191 | $ | 1,246 | ||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||
|
Due to Non-Guarantor Subsidiaries
|
$ | 3,803 | $ | 3,549 | $ | 1,181 | $ | 1,157 | ||||||||||||||||||
| Other current liabilities | 4,078 | 4,216 | 3,179 | 3,510 | ||||||||||||||||||||||
| Total current liabilities | $ | 7,881 | $ | 7,765 | $ | 4,360 | $ | 4,667 | ||||||||||||||||||
| Total non-current liabilities | $ | 25,691 | $ | 25,039 | $ | 528 | $ | 522 | ||||||||||||||||||
Summarized Statements of Earnings (Losses)
(in millions of dollars)
| For the Nine Months Ended September 30, 2025 | ||||||||||||||
|
Parent (1)
|
Guarantor (2)
|
|||||||||||||
| Net revenues | $ | - | $ | 14,398 | ||||||||||
| Gross profit | - | 8,713 | ||||||||||||
| Net earnings (losses) | (344) | 5,927 | ||||||||||||
(1) For the nine months ended September 30, 2025, net earnings (losses) include $277 million of intercompany interest income from non-guarantor subsidiaries and $314 million of interest expense from non-guarantor subsidiaries.
(2) For the nine months ended September 30, 2025, net earnings (losses) include $190 million of intercompany interest income from non-guarantor subsidiaries.
Cautionary Factors That May Affect Future Results
Forward-Looking and Cautionary Statements
This Form 10-Q contains statements concerning our expectations, plans, objectives, future financial performance and other statements that are not historical facts. You can identify these forward-looking statements by our use of words such as "strategy," "expects," "continues," "plans," "anticipates," "believes," "will," "estimates," "forecasts," "intends," "projects," "goals," "objectives," "guidance," "targets" and other words of similar meaning. You can also identify them by the fact that they do not relate strictly to historical or current facts.
We cannot guarantee that any forward-looking statement will be realized, although we believe we have been prudent in our plans, estimates and assumptions. Achievement of future results is subject to risks, uncertainties and assumptions that may prove to be inaccurate. Should known or unknown risks or uncertainties materialize, or should underlying estimates or assumptions prove inaccurate, actual results could differ materially from those anticipated, estimated or projected. You should bear this in mind as you consider our forward-looking statements and whether to invest in or remain invested in our securities. In connection with the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, we are identifying important factors that, individually or in the aggregate, could cause actual results and outcomes, including with respect to our ability to achieve our Vision, to differ materially from those contained in, or implied by, any forward-looking statements we make. Any such statement is qualified by reference to the following cautionary statements. We elaborate on these important
factors and the risks we face throughout this Form 10-Q, particularly in the Executive Summaryand Business Environmentsections preceding our discussion of the operating results of our segments above, and in our other publicly filed reports, including our 2024 Form 10-K and First Quarter Form 10-Q. These factors and risks include the following:
▪our inability to anticipate and respond to changes in adult tobacco consumer preferences and purchase behavior;
▪our inability to compete effectively;
▪the growth of the e-vapor category, including illicit disposable e-vapor products, which contributes to reductions in domestic cigarette consumption levels and shipment volume;
▪the impact of illicit trade in tobacco products and the sale of products designed to avoid the regulatory framework for tobacco products, each of which contribute to reductions in the consumption levels and shipment volumes of our businesses' products;
▪our failure to develop and commercialize innovative products, including tobacco products that may reduce health risks relative to other tobacco products and appeal to adult tobacco consumers;
▪changes, including in macroeconomic and geopolitical conditions (including inflation and tariffs), that result in shifts in adult tobacco consumer disposable income and purchasing behavior, including choosing lower-priced and discount brands or products, and reductions in shipment volumes;
▪unfavorable outcomes with respect to litigation proceedings or any governmental investigations, including significant monetary and non-monetary remedies and importation bans;
▪the risks associated with significant federal, state and local government actions, including FDA regulatory actions and inaction, and various private sector actions;
▪the risk that regulators, including the FDA, and courts may interpret laws, rules and regulations applicable to our operating companies' products differently than we do;
▪increases in tobacco product-related taxes;
▪our failure to complete or manage successfully strategic relationships or transactions, including acquisitions, dispositions, joint ventures and investments in third parties, or realize the anticipated benefits of such transactions;
▪significant changes in price, availability or quality of tobacco, other raw materials or component parts, including as a result of changes in macroeconomic, climate and geopolitical conditions;
▪our reliance on a few significant facilities and a small number of key suppliers, distributors and distribution chain service providers and the risks associated with an extended disruption at a facility or in service by a supplier, distributor or distribution chain service provider;
▪the risk that we may be required to write down goodwill and intangible assets, including trademarks and other intellectual property, due to impairment;
▪the risks associated with the Initiative, including risks relating to business continuity, our internal control over financial reporting and audit procedures and our ability to recognize the expected savings;
▪the risk that we could decide, or be required, to recall products;
▪the various risks related to health epidemics and pandemics and the measures that international, federal, state and local governments, agencies, law enforcement and health authorities implement to address them;
▪our inability to attract and retain a highly skilled workforce due to the decreasing social acceptance of tobacco usage, tobacco control actions and other factors;
▪the risks associated with the various U.S. and foreign laws and regulations to which we are subject due to our international business operations;
▪the risks concerning a challenge to our tax positions, an increase in the income tax rate or other changes to federal or state tax laws;
▪the risks associated with legal and regulatory requirements related to climate change and other environmental sustainability matters;
▪disruption and uncertainty in the credit and capital markets, including risk of losing access to these markets;
▪a downgrade or potential downgrade of our credit ratings;
▪the impact of heightened focus by investors and other stakeholders on our performance relating to corporate responsibility matters;
▪the failure of our, or our key service providers' or key suppliers', information systems to function as intended, or cyber-attacks or security breaches affecting us or our key service providers or key suppliers;
▪our failure, or the failure of our key service providers or key suppliers, to comply with laws related to personal data protection, privacy, artificial intelligence and information security;
▪the risk that the expected benefits of our investment in ABI may not materialize in the expected manner or timeframe or at all; and
▪the risks associated with our investment in Cronos, including legal, regulatory and reputational risks and the risk that the expected benefits of the transaction may not materialize in the expected manner or timeframe or at all.
You should understand that it is not possible to predict or identify all factors and risks. Consequently, you should not consider the foregoing list to be complete. We do not undertake to update any forward-looking statement that we may make from time to time except as required by applicable law.
Altria Group Inc. published this content on October 30, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on October 30, 2025 at 11:23 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]