ALTRIA GROUP, INC.
For the period ended Sep 30, 2025. Filed Oct 30, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Oct 30, 2025
MO$76.12-1.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-07-30.
0000764180-25-000111
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-10-30.
0000764180-25-000130
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 389 previous paragraphs and 387 current paragraphs.
264 unchanged; 105 reworded; 14 added; 16 removed; 4 previous and 4 current paragraphs rearranged.
Tables are not compared: 16 previous and 16 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
▪NPM Adjustment Items: For a discussion of NPM Adjustment Items and a breakdown of these items by segment, see Health Care Cost Recovery Litigation in Note 14. Contingencies (“Note 14”) and NPM Adjustment Itemsin Note 11, respectively.
Current report
We recorded exit and implementation costs of $43 million and $13 million related to our Optimize & Accelerate initiative (“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.
Current report
▪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.
Current report
▪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.
Current report
Operating income increased $78 million (2.5%), due primarily to higher OCI and lower general corporate expenses.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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 by lower shipment volume ($366 million), lower NPM adjustment items ($21 million) and higher costs ($20 million).
Current report
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.
Current report
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).
Current report
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).
Current report
Adjusted OCI decreased $4 million (0.9%), due primarily to lower volume/mix, partially offset by higher pricing and lower costs.
Removed paragraphs (16)
Previous report
Operating income increased $697 million (27.5%), due primarily to higher OCI (which includes the non-cash impairment of the Skoal trademark in 2024 in our oral tobacco product segment) and lower general corporate expenses.
Previous report
(Income) losses from investments in equity securities were favorable $29 million (24.4%), due primarily to higher income from our equity investment in ABI (due primarily to favorable special items, partially offset by lower ownership interest).
Previous report
Adjusted net earnings of $2,433 million increased $145 million (6.3%), due primarily to higher OCI, partially offset by lower income from our equity investment in ABI and higher interest and other debt expense, net. Adjusted diluted EPS of $1.44 increased by 8.3%, due to higher adjusted net earnings and fewer shares outstanding.
Previous report
Although the FDA, in conjunction with other federal entities, has increased enforcement activity, insufficient actions against manufacturers, distributors and retailers of certain product categories that violate the law, including certain disposable and flavored e-vapor products, certain oral nicotine pouch products and products targeted to minors, have allowed such products to proliferate on the market. In addition, the FDA’s failure to clearly define product pathways and accelerate PMTA decision making has resulted in a market with few authorized smoke-free products available to adult tobacco consumers.
Previous report
Net revenues, which include excise taxes billed to customers, decreased $422 million (4.1%), due primarily to lower shipment volume ($1,414 million), partially offset by higher pricing ($968 million), which includes higher promotional investments.
Previous report
Reported OCI increased $153 million (2.9%), due primarily to higher pricing, which includes higher promotional investments, lower per unit settlement charges and lower costs ($53 million), partially offset by lower shipment volume ($942 million) and costs associated with our Optimize & Accelerate initiative in 2025 ($26 million).
Previous report
Adjusted OCI increased $187 million (3.5%), due primarily to higher pricing, which includes higher promotional investments, lower per unit settlement charges and lower costs, partially offset by lower shipment volume.
Previous report
Net revenues, which include excise taxes billed to customers, decreased $138 million (2.5%), due primarily to lower shipment volume ($639 million), partially offset by higher pricing ($477 million), which includes higher promotional investments.
Previous report
Adjusted OCI increased $120 million (4.2%), due primarily to higher pricing, which includes higher promotional investments, lower per unit settlement charges and lower costs, partially offset by lower shipment volume.
Previous report
Net revenues, which include excise taxes billed to customers, increased $42 million (5.9%), as higher pricing ($70 million), which includes higher promotional investments, was partially offset by lower volume/mix ($28 million).
Previous report
Reported OCI increased $401 million (100+%), due primarily to a non-cash impairment of the Skoal trademark ($354 million) in 2024 and higher pricing, which includes higher promotional investments, partially offset by lower volume/mix ($33 million).
Previous report
Adjusted OCI increased $49 million (10.9%), due to higher pricing, which includes higher promotional investments, and lower costs ($12 million), partially offset by lower volume/mix.
Previous report
Our oral tobacco products segment’s retail share was 33.9%, as share declines for MST products were partially offset by oral nicotine pouch segment share growth.
Previous report
Our oral tobacco products segment’s retail share was 33.1%, as share declines for MST products were partially offset by oral nicotine pouch segment share growth.
Previous report
In addition:
Previous report
(1) On May 14, 2025, S&P changed its long-term debt credit rating to BBB+ from BBB and outlook to Stable from Positive.
Reworded paragraphs (105)
Previous wording
The following discussion 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”). When used in this Form 10-Q, the terms“Altria,” “we,” “us” and “our” refer to either (i)
Current wording
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.
Previous wording
In this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“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 Measures section below.
Current wording
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 Measures section below.
Previous wording
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 this Form 10-Q, Horizon had no products in the U.S. marketplace.
Current wording
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.
Previous wording
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, illicit flavored disposable e-vapor products, tariffs and evolving consumer preferences. Other trends and developments are discussed elsewhere in this MD&A.
Current wording
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.
Previous wording
During the first half of 2025, U.S. adult tobacco consumers continued to face pressure on discretionary income due to the cumulative effects of inflation, particularly impacting lower income consumers. Although the inflation rate during this period saw marginal decreases in line with most economists’ forecast, it remained above the Federal Reserve’s target of 2%. Persistent high prices for essentials such as groceries and housing continued to constrain consumer spending. While gas prices declined compared to the prior year, the average price of gas remained above $3.00 per gallon. Additionally, tariffs introduced in April of 2025 remained at historically high levels. Ongoing trade negotiations, along with potential inflation and unemployment concerns, have weighed on consumer confidence creating a likelihood of continued headwinds for discretionary spending. While we have not seen a material impact on adult tobacco consumer purchasing behavior as a result of tariffs and tariff speculation, we continue to monitor the additional pressure that tariff-related price increases may have. 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. While we expect higher tariffs to impact our costs in 2025, we do not expect the impact to be material based on presently available information on tariffs.
Current wording
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.
Previous wording
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 second quarter of 2025, the discount share of the cigarette category reached 31.2%, an increase of 1.9 share points versus the second 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 calendar differences, trade inventory movements and other factors, total estimated domestic cigarette industry volume declined by 8.5% in the second quarter of 2025 versus the second quarter of 2024. In addition, the U.S. nicotine pouch category continued to grow throughout the second quarter of 2025 to 52.0% of the U.S. oral tobacco category, an increase of 10.0 share points versus the second 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.
Current wording
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.
Previous wording
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 pre-market tobacco product applications (“PMTA”) have been submitted have allowed such products to continue to proliferate in the market.
Current wording
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.
Previous wording
Additionally, we continue to see increased illicit activity across multiple tobacco categories, including nicotine pouch products and cigarettes. Throughout 2024 and the first half 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.
Current wording
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.
Previous wording
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 and Vision.
Current wording
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.
Previous wording
Consolidated Results of Operations for the Six Months Ended June 30, 2025
Current wording
Consolidated Results of Operations for the Nine Months Ended September 30, 2025
Previous wording
The changes in net earnings and diluted EPS for the six months ended June 30, 2025, from the six months ended June 30, 2024, were due primarily to the following:
Current wording
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:
Previous wording
▪Operations: The increase of $128 million in operations (which excludes the impact of special items shown in the table above) was due primarily to higher OCI, partially offset by lower income from our equity investment in ABI and higher interest and other debt expense, net.
Current wording
▪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.
Previous wording
▪Operations: The increase of $117 million in operations (which excludes the impact of special items shown in the table above) was due primarily to higher OCI, partially offset by lower income from our equity investment in ABI and higher interest and other debt expense, net.
Current wording
▪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.
Previous wording
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 to our condensed consolidated financial statements in Item 1 (“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.
Current wording
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.
Previous wording
Our management believes that the estimated fair value of the e-vapor reporting unit at March 31, 2025 remains reasonable and no events or circumstances exist indicating an impairment for the three months ended June 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 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.
Current wording
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.
Previous wording
If the decline in sales volume for Skoal is 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. We believe that the estimated fair value of the Skoal trademark at December 31, 2024 remains reasonable and no events or circumstances exist indicating an impairment for the three months ended June 30, 2025. 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 Skoal trademark 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 Skoal intangible asset of approximately $85 million.
Current wording
We believe that the estimated fair value of the Skoal trademark 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 Skoal is 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 Skoal trademark 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 Skoal intangible asset of approximately $85 million.
Previous wording
As discussed further in Note 11. Segment Reporting to our condensed consolidated financial statements in Item 1 (“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.
Current wording
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.
Previous wording
The following table provides a reconciliation of adjusted net earnings and adjusted diluted EPS for the six months ended June 30:
Current wording
The following table provides a reconciliation of adjusted net earnings and adjusted diluted EPS for the nine months ended September 30:
Previous wording
The following special items affected the comparability of statements of earnings amounts for the six and three months ended June 30, 2025 and 2024:
Current wording
The following special items affected the comparability of statements of earnings amounts for the nine and three months ended September 30, 2025 and 2024:
Previous wording
▪Acquisition and disposition-related items: We recorded net pre-tax charges of $70 million and $16 million for the six and three months ended June 30, 2025, respectively, due to expenses related to the U.S International Trade Commission (“ITC”) exclusion order and cease-and-desist orders prohibiting the importation and sale of NJOY ACE in 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 Litigationin Note 14. Contingencies to our condensed consolidated financial statements in Item 1 (“Note 14”). We recorded these items as follows:
Current wording
▪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 ACE in 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 Litigationin Note 14. We recorded these items as follows:
Previous wording
(2)Recorded as general corporate expense, net of $25 million in insurance recoveries. In 2024 and 2025, we incurred total costs of $156 million associated with the ITC determination and patent infringement lawsuits related to the NJOY Transaction, which were offset by insurance recoveries of $50 million. These total amounts include $61 million of costs offset by $25 million of insurance recoveries recorded in 2024.
Current wording
(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.
Previous wording
Additionally, we recorded a non-cash, pre-tax charge of $25 million for the six months ended June 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 six and three months ended June 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, see Contingent Paymentsin Note 7. Financial Instruments.
Current wording
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, see Contingent Paymentsin Note 7. Financial Instruments.
Previous wording
We recorded a pre-tax gain of $2.7 billion upon the assignment of the IQOS Tobacco Heating System(“IQOS System”) commercialization rights to Philip Morris International Inc. in April 2024, for the six and three months ended June 30, 2024.
Current wording
We recorded a pre-tax gain of $2.7 billion upon the assignment of the IQOS Tobacco Heating System(“IQOS System”) commercialization rights to Philip Morris International Inc. in April 2024, for the nine months ended September 30, 2024.
Previous wording
▪Asset Impairment, Exit and Implementation Costs: We recorded pre-tax charges of $903 million, which consisted primarily of 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 six months ended June 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 Skoal trademark of $354 million for the six and three months ended June 30, 2024 in our oral tobacco products segment. For further discussion, see Note 4.
Current wording
▪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 Skoal trademark of $354 million for the nine months ended September 30, 2024 in our oral tobacco products segment. For further discussion, see Note 4.
Previous wording
▪Amortization of Intangibles: We recorded pre-tax amortization expense of definite-lived intangible assets of $74 million and $64 million for the six months ended June 30, 2025 and 2024, respectively, and $37 million for the three months ended June 30, 2025 and 2024, respectively, in marketing, administration and research costs in our condensed consolidated statements of earnings.
Current wording
▪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.
Previous wording
▪ABI-Related Special Items: We recorded net pre-tax income of $62 million from our investment in ABI for the six months ended June 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. For further information on the gain related to the ABI Transaction, see Note 6. Investments in Equity Securities to our condensed consolidated financial statements in Item 1.
Current wording
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.
Previous wording
▪Income Tax Items: We recorded income tax items of $52 million for the six months ended June 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.
Current wording
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.
Previous wording
Net revenues, which include excise taxes billed to customers, decreased $424 million (3.6%), due primarily to lower net revenues in our smokeable products segment.
Current wording
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.
Previous wording
Cost of sales decreased $329 million (10.8%), due primarily to lower shipment volume and lower per unit settlement charges in our smokeable products segment, partially offset by higher NJOY costs.
Current wording
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.
Previous wording
Excise taxes on products decreased $239 million (13.3%), due primarily to lower shipment volume in our smokeable products segment.
Current wording
Excise taxes on products decreased $333 million (12.3%), due primarily to lower shipment volume in our smokeable products segment.
Previous wording
Marketing, administration and research costs decreased $187 million (13.4%), 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.
Current wording
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.
Previous wording
Operating income decreased $189 million (3.6%), 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 Skoal trademark in our oral tobacco product segment in 2024), partially offset by lower general corporate expenses.
Current wording
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 Skoal trademark in our oral tobacco product segment in 2024), partially offset by lower general corporate expenses.
Previous wording
(Income) losses from investments in equity securities were unfavorable $123 million (29.7%), due primarily to lower income from our equity investment in ABI (due primarily to our gain on the ABI Transaction in 2024 and lower ownership interest), partially offset by favorable Cronos-related special items.
Current wording
(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).
Previous wording
Provision for income taxes decreased $577 million (30.0%), due primarily to lower earnings before income taxes, partially offset by unfavorable tax items as discussed above.
Current wording
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.
Previous wording
Reported net earnings of $3,455 million decreased $2,477 million (41.8%), due primarily to the gain on the sale of the IQOS System commercialization rights in 2024, lower operating income, unfavorable results from our equity investment in ABI and unfavorable income tax items. Reported basic and diluted EPS of $2.04, each decreased by 40.2% due to lower reported net earnings, partially offset by fewer shares outstanding.
Current wording
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.
Previous wording
Adjusted net earnings of $4,522 million increased $188 million (4.3%), due primarily to higher OCI and a lower adjusted tax rate, partially offset by lower income from our equity investment in ABI and higher interest and other debt expense, net. Adjusted diluted EPS of $2.67 increased by 7.2%, due to higher adjusted net earnings and fewer shares outstanding.
Current wording
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.
Previous wording
Net revenues, which include excise taxes billed to customers, decreased $107 million (1.7%), due primarily to lower net revenues in our smokeable products segment, partially offset by higher net revenues in our oral tobacco segment.
Current wording
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.
Previous wording
Cost of sales decreased $162 million (10.1%), due primarily to lower shipment volume and lower per unit settlement charges in our smokeable products segment.
Current wording
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.
Previous wording
Excise taxes on products decreased $120 million (12.9%), due primarily to lower shipment volume in our smokeable products segment.
Current wording
Excise taxes on products decreased $94 million (10.3%), due primarily to lower shipment volume in our smokeable products segment.
Previous wording
Marketing, administration and research costs decreased $169 million (21.4%), due primarily to lower acquisition-related items discussed above.
Current wording
Marketing, administration and research costs decreased $76 million (11.6%), due primarily to lower acquisition-related items discussed above, included in general corporate expense.
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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.
Current report — wording carried from elsewhere
▪Effective October 12, 2025, PM USA increased the list price of Marlboro (excluding Mainline Menthol and 72s Menthol) and L&M by $0.17 per pack. PM USA also increased the list price of all its other premium cigarette brands by $0.22 per pack.
Current report — wording carried from elsewhere
4.5% at September 30, 2025 from approximately 4.3% at December 31, 2024. For further discussion of long-term debt, see Note 12.
Current report — wording carried from elsewhere
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.
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Previous report — wording carried elsewhere
Altria Group, Inc. and its consolidated subsidiaries or (ii) Altria Group, Inc. only and not its consolidated subsidiaries, as appropriate in the context.
Previous report — wording carried elsewhere
Provision for income taxes decreased $573 million (43.6%), due primarily to lower earnings before income taxes.
Previous report — wording carried elsewhere
▪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
Previous report — wording carried elsewhere
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.