Philip Morris International Inc
For the period ended Jun 30, 2024. Filed Jul 25, 2024.
View on SEC.govAbout this filing
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.
Jun 30, 2024 · Filed Jul 25, 2024
PM$197.88-1.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-04-26.
0001413329-24-000087
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-07-25.
0001413329-24-000145
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 484 previous paragraphs and 548 current paragraphs.
319 unchanged; 141 reworded; 65 added; 21 removed; 3 previous and 23 current paragraphs rearranged.
Tables are not compared: 26 previous and 35 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 (65)
Current report
Consolidated Operating Results for the Six Months Ended June 30, 2024
Current report
South Korea indirect tax charge –On July 13, 2023, our South Korean subsidiary, PM Korea, received an adverse ruling from the Supreme Court of South Korea related to cases alleging underpayment of excise taxes in connection with a 2015 excise tax increase and subsequent audit by the South Korean Board of Audit and Inspection. The Supreme Court ruling reversed previous decisions that were in PM Korea’s favor at the trial and appellate levels. As a result of the ruling, we concluded that an adverse outcome was probable. Consequently, we recorded a non-cash pre-tax charge of $204 million (representing $174 million net of income tax or $0.11 per share decrease in diluted EPS) in the second quarter results of 2023, reflecting the full amount previously paid by PM Korea.
Current report
Fair value adjustment for equity security investments –During the six months ended June 30, 2023, we recorded an unfavorable fair value adjustment for our equity security investments in India and Sri Lanka of $10 million after tax (or $0.01 per share decrease in diluted EPS). During the six months ended June 30, 2024, we recorded a favorable fair value adjustment for our equity security investments in India and Sri Lanka of $242 million after tax (or $0.15 per share increase in diluted EPS). For further details, see Note 12. Related Parties - Equity Investments and Other.
Current report
Amortization of intangibles –During the six months ended June 30, 2023 and 2024, we recorded amortization of intangible expense of $163 million (representing $128 million net of income tax or $0.08 per share decrease in diluted EPS) and $332 million (representing $260 million net of income tax or $0.17 per share decrease in diluted EPS), respectively. The higher 2024 amount includes the reacquired rights recorded as other intangible assets, net following the reacquisition of IQOS commercialization rights in the U.S. from Altria Group, Inc. For further details, see Note 4. Goodwill and Other Intangible Assets, net.
Current report
During the quarter, net revenues increased by 5.6%. Net revenues, excluding currency and acquisitions, increased by 9.6%, mainly reflecting: a favorable pricing variance, primarily due to higher combustible tobacco pricing; and favorable volume/mix, driven by higher smoke-free products volume.
Current report
South Korea indirect tax charge –On July 13, 2023, our South Korean subsidiary, PM Korea, received an adverse ruling from the Supreme Court of South Korea related to cases alleging underpayment of excise taxes in connection with a 2015 excise tax increase and subsequent audit by the South Korean Board of Audit and Inspection. The Supreme Court ruling reversed previous decisions that were in PM Korea’s favor at the trial and appellate levels. As a result of the ruling, we concluded that an adverse outcome was probable. Consequently, we recorded a non-cash pre-tax charge of $204 million (representing $174 million net of income tax or $0.11 per share decrease in diluted EPS) in the second quarter results of 2023, reflecting the full amount previously paid by PM Korea.
Current report
Impairment of goodwill and other intangibles –During the second quarter of 2023, as a result of the completion of our annual review of goodwill and non-amortizable intangible assets for potential impairment, it was determined that the estimated fair value of the Wellness and Healthcare reporting unit was lower than its carrying value. Consequently, we recorded a total non-cash impairment charge of $680 million (representing a $0.44 per share decrease in diluted EPS) consisting of a goodwill impairment charge of $665 million and a non-amortizable intangible asset pre-tax impairment charge of $15 million for an in-process research and development project related to one of our 2021 acquisitions. The impairment charge was recorded in impairment of goodwill ($665 million) and marketing, administration and research costs ($15 million) in the condensed consolidated statements of earnings during the three months ended June 30, 2023 and was included in the Wellness and Healthcare segment results. For further details, see Note 4. Goodwill and Other Intangible Assets, net.
Current report
•Europe: Favorable pricing, partly offset by higher marketing, administration and research costs and manufacturing costs;
Current report
•Americas: Favorable volume/mix and favorable pricing, partly offset by higher marketing and administration costs.
Current report
•Impairment of goodwill and other intangibles– For the six months and three months ended June 30, 2023, PMI recorded $680 million of goodwill and non-amortizable intangible assets impairment charges that was included in the Wellness and Healthcare segment. For further details, see Note 4. Goodwill and Other Intangible Assets, net.
Current report
•South Korea indirect tax charge–On July 13, 2023, PMI's South Korean subsidiary, PM Korea, received an adverse ruling from the Supreme Court of South Korea related to cases alleging underpayment of excise taxes in connection with a 2015 excise tax increase and subsequent audit by the South Korean Board of Audit and Inspection. The Supreme Court ruling reversed previous decisions that were in PM Korea’s favor at the trial and appellate levels. As a result of the ruling, we concluded that an adverse outcome was probable. Consequently, we recorded a non-cash pre-tax charge of $204 million in marketing, administration and research costs in the condensed consolidated statements of earning, reflecting the full amount previously paid by PM Korea, which was included in the EA, AU & PMI DF segment for the six months and three months ended June 30, 2023.
Current report
Oral smoke-free products conversion: (i) nicotine pouches: 15 pouches per can in the U.S. and weighted average 21 pouches per can outside the U.S.; (ii) snus products: weighted average 21 pouches equivalent per can; (iii) moist snuff products: weighted average 17 pouches equivalent per can; (iv) tobacco bits products: weighted average 30 pouches equivalent per can; (v) chew bags products: weighted average 20 pouches per can.
Current report
Adjusted market share for HTUs is defined as the total in-market sales volume for PMI HTUs as a percentage of the total estimated sales volume for cigarettes and HTUs, excluding the impact of estimated distributor and wholesaler inventory movements.
Current report
Consolidated Operating Results for the Six Months Ended June 30, 2024
Current report
The following discussion compares our consolidated operating results for the six months ended June 30, 2024, with the six months ended June 30, 2023.
Current report
For the full year 2024, we currently expect a broadly stable total international industry volume for cigarettes and HTUs, excluding China and the U.S.
Current report
Our total cigarette and HTU shipment volume increased by 2.8% (HTU shipments increased by 16.8%, while cigarette shipments were stable).
Current report
(3) For details on the impairment of goodwill recorded in the second quarter of 2023, see Note 4. Goodwill and Other Intangible Assets, net.
Current report
We continue to expect our 2024 performance to be favorably impacted by accelerated total volume growth and pricing despite currency headwinds in the first half of 2024. This reflects the strong outlook for ZYN, despite short-term supply constraints; and the increasing profitability of IQOSdue to operating leverage, manufacturing efficiencies, as well as a robust combustibles performance.
Current report
Total Market
Current report
Shipment Volume
Current report
Our total cigarette and HTU shipment volume increased by 2.5% (HTU shipments increased by 13.1%, and cigarette shipments increased by 0.4%), with increases across all regions except the Americas Region.
Current report
Adjusted in-market sales for HTUs increased by 10.2%, including growth in Japan of 12.5% and Europe of 6.8%.
Current report
(1) Cost/Other variance includes charges in 2024 of $196 million related to amortization of intangibles, partly offset by charges in 2023 of $204 million related to the South Korea indirect tax charge, $60 million related to amortization of intangibles and $15 million related to the impairment of other intangibles. For more details, see Note 4. Goodwill and Other Intangible Assets, net, and Note 7. Segment Reporting.
Current report
(2) For details on the impairment of goodwill recorded in the second quarter of 2023, see Note 4. Goodwill and Other Intangible Assets, net.
Current report
During the quarter, net revenues increased by 5.6%. Net revenues, excluding currency and acquisitions, increased by 9.6%, mainly reflecting: a favorable pricing variance, primarily due to higher combustible tobacco pricing; and favorable volume/mix, driven by higher smoke-free products volume.
Current report
Net revenues include $3.6 billion in 2024 and $3.2 billion in 2023 related to smoke-free.
Current report
Operating income increased by 34.2%. Operating income, excluding currency and acquisitions, increased by 46.6%, primarily reflecting: the favorable pricing variance; and favorable volume/mix (mainly driven by smoke-free products volume, notwithstanding unfavorable cigarette mix), as well as a favorable comparison to 2023 reflecting the impairment of goodwill recorded in the second quarter of 2023 of $665 million and the South Korea indirect tax charge of $204 million in 2023. The increase was partly offset by higher amortization of intangibles in 2024 and higher costs, predominantly marketing, administration and research costs.
Current report
Interest expense, net, of $329 million increased by $32 million or 10.8%.
Current report
Our effective tax rate decreased by 1.0 percentage point to 23.7%.
Current report
On April 16, 2024, Brazil’s Health Control Agency enacted Resolution 855, imposing strict regulations on electronic smoking devices, including heat-not-burn devices and vaping devices (“ESDs”). The resolution prohibits their manufacture, importation, sale, distribution, storage, transportation, advertising, and use in enclosed public spaces. Travelers are also forbidden from bringing ESDs into the country.
Current report
On July 17, 2023, Swedish Match USA, Inc. submitted a renewal application to the FDA requesting re-authorization to continue to market its eight snus smokeless tobacco products (sold under the General snus brand name) with a modified risk claim. General snus products received modified risk orders on October 22, 2019. Swedish Match USA, Inc. was authorized to market these products with the claim, “Using General snus instead of cigarettes puts you at a lower risk of mouth cancer, heart disease, lung cancer, stroke, emphysema, and chronic bronchitis.” This renewal request was received by the FDA 360 days prior to the stated October 22, 2024 expiration date of the original modified risk claim orders, as requested by the FDA in the original orders. On November 30, 2023, the FDA filed for scientific review of the MRTP renewal applications for General snus products and posted materials from these applications. The FDA held a Tobacco Products Scientific Advisory Committee meeting to discuss the MRTP renewal applications on June 26, 2024. On July 3, 2024, the FDA extended the comment period on the MRTP renewal applications to provide time for the public to review application materials that were recently made available. Subsequently, on July 15, 2024, the FDA reposted application documents related to the MRTP renewal and announced a deadline for public comments. Public comments on these applications must be submitted by August 14, 2024.
Current report
On June 11, 2024, Swedish Match North America LLC ("SMNA") received a subpoena from the office of the Attorney General of the District of Columbia (“D.C.”). The subpoena requests, among other things, information concerning SMNA’s compliance with D.C.’s licensing regulations, age-verification requirements, and prohibition on the sale of flavored tobacco products, including with respect to ZYN nicotine pouches. SMNA is cooperating with the investigation and is conducting a full review of its sales and supply chain arrangements in D.C. and other U.S. localities where flavor bans may apply.
Current report
Following receipt of the subpoena, SMNA took steps to suspend online sales on the e-commerce shop associated with ZYN.com. Sales through the e-commerce portion of ZYN.com have represented less than 2% of nationwide sale volumes historically. By contrast, sales through brick-and-mortar retailers have long been the foundation of Swedish Match’s business in the United States, with ZYN distributed in over 160,000 stores. Swedish Match is presently assessing whether it makes sense from a business and financial standpoint to resume sales through an e-commerce shop on ZYN.com.
Current report
Operating income increased by 2.5%. Operating income, excluding currency and acquisitions, increased by 5.3%, primarily reflecting: a favorable pricing variance, mainly driven by higher combustible tobacco pricing; partly offset by higher marketing, administration and research costs as well as manufacturing costs, including the impact of the EU single-use plastics directive.
Current report
For the six months ended June 30, 2024, net revenues increased by 8.1%. Net revenues, excluding currency and acquisitions, increased by 7.1%, primarily driven by the same factors as for the quarter.
Current report
For the six months year-to-date, the estimated total market for cigarettes and HTUs in the Region decreased by 1.2% to 262.1 billion units, reflecting a 2.6% decline for cigarettes, partly offset by an increase for HTUs. The decrease in the estimated total market was predominantly due to France (down by 13.8%), the UK (down by 13.3%), and the Netherlands (down by 15.5%), partly offset by Bulgaria (up by 9.7%), Poland (up by 2.3%), Romania (up by 3.9%), and Greece (up by 7.1%).
Current report
For the six months year-to-date, our total cigarette and HTU shipment volume in the Region increased by 0.1% to 104.8 billion units. Total cigarette and HTU shipment volume increased notably in Poland (up by 7.9%), Greece (up by 9.6%) and Germany (up by 1.9%), and decreased, notably in France (down by 21.7%) and the Netherlands (down by 15.2%), both driven by cigarettes.
Current report
In the second quarter, oral SFP shipments decreased by 1.6% with decline of snus (down by 5.6%), partly offset by nicotine pouches (up by 26.9%).
Current report
For the six months year-to-date, oral SFP shipments increased by 6.9%, driven by growth of nicotine pouches (up by 40.2%) and snus (up by 2.5%).
Showing the first 40 of 65 passages. Open the source sections for the rest.
Removed paragraphs (21)
Previous report
Impairment and Exit Costs
Previous report
On February 2, 2024, PMI announced that it reached a global settlement with British American Tobacco p.l.c. The settlement led to the rescission of International Trade Commission orders prohibiting the importation of IQOS products to the U.S. As a result, PMI has restructured the sourcing of IQOS products to be commercialized in the U.S., and recorded pre-tax asset impairment and exit costs of $121 million related to this restructuring during the first quarter of 2024.
Previous report
In the first quarter of 2024, PMI ceased its operations in Venezuela and as a result, recorded pre-tax asset impairment and exit costs of $47 million.
Previous report
The unfavorable currency impact in the first quarter of 2024 included a $0.09 impact from the devaluation of the Egyptian pound, including a transactional impact of approximately $0.06 primarily related to the balance sheet remeasurement of foreign currency payables.
Previous report
For the full year 2024, we currently expect an estimated total international industry volume decline for cigarettes and HTUs, excluding China and the U.S., of -2% to flat.
Previous report
Our total cigarette and HTU shipment volume increased by 3.1%, reflecting a 20.9% increase in HTU shipments across all regions, partly offset by a 0.4% decline in cigarette shipments, with declines across all regions except the SSEA, CIS & MEA Region. Cigarette shipment volume for Marlboro increased by 1.7% to 56.9 billion units.
Previous report
(2) Cost/Other variance includes charges in 2023 of $18 million related to a Swedish Match AB acquisition accounting related items.
Previous report
Overall, our results of operations in the first quarter of 2024 were favorably impacted by three main factors. The first is the net revenue and profit impact of better volumes following the industry-leading performance of ZYN, the strong shipment growth of IQOS HTUs, and a resilient combustible delivery. Second is the benefit of our pricing actions to mitigate currency headwinds and third is on cost including a stepped-up focus on manufacturing and back-office efficiencies to prioritize growth investments. These factors are expected to continue to impact performance for the remainder of the year.
Previous report
In April 2020, affiliates of British American Tobacco p.l.c. ("BAT") filed a complaint against PMI, Philip Morris Products S.A., Altria Group, Inc., and its subsidiariesb efore the International Trade Commission ("ITC"). On September 29, 2021, the ITC issued its Final Determination ("FD"), Limited Exclusion Order ("LEO") and Cease and Desist Order ("CDO"). The ITC upheld the finding of infringement in the FD and found a subsequent violation. The ITC issued a LEO against Philip Morris Products S.A., prohibiting the importation of infringing tobacco heating articles and components thereof, and CDOs against Altria Client Services, LLC, and certain of its affiliates, which went into effect at the end of the 60-day Presidential review period on November 28, 2021. We appealed the patent issues. Furthermore, lawsuits based on the same patent families were repeatedly and universally rejected in European courts and the European Patent Office. The decision has no bearing outside the United States.
Previous report
On February 1, 2024 we entered into a global settlement with BAT that resolves all ongoing patent infringement litigation between the parties related to heated tobacco and vapor products. Among other matters, under the settlement PMI and BAT requested rescission of the LEO and CDO, which was granted on March 11, 2024. For further details, see Note 8. Contingencies to our condensed consolidated financial statements.
Previous report
In July 2020, the Public Prosecutor’s office of Rome, Italy, notified our Italian subsidiary, Philip Morris Italia S.r.l. (“PM Italia”), as well as three former or current employees and a former external consultant of PM Italia in March 2020, that it concluded a preliminary investigation against them for alleged contravention of anti-corruption laws and related disruption of trade freedom. The Public Prosecutor alleges that the individuals involved promised certain personal favors to government officials from January to July of 2018 in exchange for favorable treatment for PM Italia, and that PM Italia lacked appropriate organizational controls to prevent the alleged actions by the individuals. In September 2020, the Prosecutor issued his indictment and referred the matter to the court. At the preliminary hearing held on May 11, 2021, the judge decided to refer all charges/defendants (including our affiliate) to trial. The first trial hearing took place on September 22, 2021. BAT has filed a civil claim against PM Italia claiming vicarious liability for any wrongdoing of its former or current employees and seeking
Previous report
EUR 50 million (approximately $55.2 million) in damages. The court admitted the claim and issued summons for PM Italia to appear in the case. The court proceeded with the examination of witnesses beginning in September 2023. PM Italia believes the charges brought against it by the Public Prosecutor are without merit and will defend them vigorously.
Previous report
Oral SFP shipments increased by 16.5% with growth of snus (up by 11.6%) and nicotine pouches (up by 55.9%), benefiting from timing of shipments and underlying category growth in the Nordics.
Previous report
Operating income increased by 5.2%. Operating income, excluding currency, increased by 38.0%, primarily reflecting: a favorable pricing variance, mainly driven by higher combustible tobacco pricing; and favorable volume/mix, driven by higher HTU volume, favorable HTU mix and favorable cigarette volume, partly offset by unfavorable cigarette mix; partly offset by higher manufacturing costs (primarily due to inflationary impacts).
Previous report
In the first quarter, the estimated total market for cigarettes and HTUs in the Region increased by approximately 1% to 371.0 billion units. The increase in the estimated total market was mainly due to Indonesia (up by 6.4%) and Turkey (up by 14.8%), partly offset by Egypt (down by 14.2%) and Pakistan (down by 20.7%).
Previous report
During the quarter, net revenues increased by 10.8%. Net revenues, excluding currency, increased by 18.0%, reflecting: a favorable pricing variance and favorable volume/mix, mainly driven by higher HTU volume.
Previous report
Operating income increased by 19.8%. Operating income, excluding currency, increased by 39.4%, mainly reflecting: the same factors as for net revenues, as well as lower shipping costs and a favorable comparison to 2023 of $19 million related to asset impairment and exit costs.
Previous report
Cigar shipment volume declined by 23%, versus a difficult comparison due to prior year trade inventory movements.
Previous report
Oral products shipments increased by 52.1%, driven by ZYN nicotine pouches (up by 79.7%) in the U.S., partly offset by moist snuff (down by 2.3%) driven by a declining category and pricing.
Previous report
During the quarter, net revenues increased by 4.7%. Net revenues, excluding currency, increased by 2.3%.
Previous report
The operating loss of $45 million in 2024 was primarily due to investments in research and development, and administration costs, as well as a charge for impairment of other intangible assets of $26 million and the amortization of acquired intangibles.
Reworded paragraphs (141)
Previous wording
We are a leading international tobacco company, actively delivering a smoke-free future. We are evolving our portfolio for the long term to include products outside of the tobacco and nicotine sector. Our current product portfolio primarily consists of cigarettes and smoke-free products. Since 2008, we have invested over $12.5 billion to develop, scientifically substantiate and commercialize innovative smoke-free products for adults who would otherwise continue to smoke, with the goal of completely ending the sale of cigarettes. This investment includes the building of world-class scientific assessment capabilities, notably in the areas of pre-clinical systems toxicology, clinical and behavioral research, as well as post-market studies. In November 2022, we acquired Swedish Match AB ("Swedish Match") – a leader in oral nicotine delivery – creating a global smoke-free combination led by the companies’IQOS and ZYN brands. The U.S. Food and Drug Administration (the "FDA") has authorized versions of our IQOS devices and consumables, and Swedish Match's General snus, as Modified Risk Tobacco Products ("MRTPs"). We describe the MRTP orders in more detail in the "Business Environment" section of this Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A").
Current wording
We are a leading international tobacco company, actively delivering a smoke-free future. We are evolving our portfolio for the long term to include products outside of the tobacco and nicotine sector. Our current product portfolio primarily consists of cigarettes and smoke-free products. Since 2008, we have invested over $12.5 billion to develop, scientifically substantiate and commercialize innovative smoke-free products for adults who would otherwise continue to smoke, with the goal of completely ending the sale of cigarettes. This investment includes the building of world-class scientific assessment capabilities, notably in the areas of pre-clinical systems toxicology, clinical and behavioral research, as well as post-market studies. In November 2022, we acquired Swedish Match AB ("Swedish Match") – a leader in oral nicotine delivery – creating a global smoke-free combination led by the companies’IQOS and ZYN brands. The U.S. Food and Drug Administration (the "FDA") has authorized versions of our IQOS devices and consumables and Swedish Match's General snus as Modified Risk Tobacco Products ("MRTPs") and renewal applications for these products are presently pending before the FDA. We describe the MRTP orders in more detail in the "Business Environment" section of this Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A").
Previous wording
IQOS is the leading brand in our SFPs portfolio. As of December 31, 2023, our smoke-free products were available for sale in 84 markets.
Current wording
IQOS and ZYN are the leading brands in our SFPs portfolio. As of June 30, 2024, our smoke-free products were available for sale in 90 markets.
Previous wording
In 2022, we also completed an agreement with Altria Group, Inc. to end our commercial relationship in the U.S. covering IQOS as of April 30, 2024. Thereafter, PMI will hold the full rights to commercialize IQOS in the U.S. On July, 14, 2023, we made the final payment to Altria under the terms of the agreement. For further details, see Note 18. Acquisitions.
Current wording
In 2022, we also completed an agreement with Altria Group, Inc. to end our commercial relationship in the U.S. covering IQOS as of April 30, 2024. PMI now holds the full rights to commercialize IQOS in the U.S. For further details, see Note 18. Acquisitions.
Previous wording
During the quarter, net revenues increased by 9.7%. Net revenues, excluding currency, increased by 12.1%, mainly reflecting: a favorable pricing variance, primarily driven by higher combustible tobacco pricing; and favorable volume/mix, mainly driven by higher HTU and ZYN volume, partially offset by lower cigarette volume, as well as a favorable comparison to 2023 reflecting a charge in the first quarter of 2023 of $80 million following the termination of a distribution arrangement in the Middle East, shown in "Other." The termination of a distribution arrangement in the Middle East is further described in the following "Diluted Earnings Per Share" discussion.
Current wording
For the six months ended June 30, 2024, net revenues increased by 7.5%. Net revenues, excluding currency and acquisitions, increased by 10.8%, mainly reflecting: a favorable pricing variance, primarily driven by higher combustible tobacco pricing; and favorable volume/mix, driven by higher smoke-free products volume, partly offset by unfavorable cigarette mix, as well as a favorable comparison to 2023 reflecting a charge in the first quarter of 2023 of $80 million following the termination of a distribution arrangement in the Middle East, shown in "Other." The termination of a distribution arrangement in the Middle East is further described in the following "Diluted Earnings Per Share" discussion.
Previous wording
•Diluted Earnings Per Share - The changes in our reported diluted earnings per share (“diluted EPS”) for the three months ended March 31, 2024, from the comparable 2023 amounts, were as follows:
Current wording
•Diluted Earnings Per Share - The changes in our reported diluted earnings per share (“diluted EPS”) for the six months ended June 30, 2024, from the comparable 2023 amounts, were as follows:
Previous wording
Asset impairment and exit costs – During the three months ended March 31, 2023, we recorded pre-tax asset impairment and exit costs of $109 million, representing $96 million net of income tax and a diluted EPS charge of$0.06 per share, related to a project to fully outsource and restructure the manufacturing of e-vapor devices and consumables. During the three months ended March 31, 2024, we recorded pre-tax asset impairment and exit costs of $168 million, representing$141 million net of income tax and a diluted EPS charge of$0.09 per share, related to the restructuring of the sourcing of IQOS products to be commercialized in the U.S., and the cessation of our operations in Venezuela. For further details, see Note 15. Asset Impairment and Exit Costs.
Current wording
Asset impairment and exit costs – During the six months ended June 30, 2023, we recorded pre-tax asset impairment and exit costs of $109 million, representing $96 million net of income tax and a diluted EPS charge of$0.06 per share, related to a project to fully outsource and restructure the manufacturing of e-vapor devices and consumables. During the six months ended June 30, 2024, we recorded pre-tax asset impairment and exit costs of $168 million, representing $141 million net of income tax and a diluted EPS charge of$0.09 per share, related to the restructuring of the sourcing of IQOS products to be commercialized in the U.S., and the cessation of our operations in Venezuela. For further details, see Note 15. Asset Impairment and Exit Costs.
Previous wording
Impairment of other intangibles – During the first quarter of 2024, we recorded an impairment charge of $27 million (representing $20 million net of income tax or $0.01 per share decrease in diluted EPS), primarily reflecting the impairment of non-amortizable intangible assets related to an in-process research and development project in the Wellness and Healthcare segment. For further details, see Note 4. Goodwill and Other Intangible Assets, net.
Current wording
Impairment of goodwill and other intangibles –During the second quarter of 2023, as a result of the completion of our annual review of goodwill and non-amortizable intangible assets for potential impairment, it was determined that the estimated fair value of the Wellness and Healthcare reporting unit was lower than its carrying value. Consequently, we recorded a total non-cash impairment charge of $680 million (representing a $0.44 per share decrease in diluted EPS) consisting of a goodwill impairment charge of $665 million and a non-amortizable intangible asset pre-tax impairment charge of $15 million for an in-process research and development project related to one of our 2021 acquisitions. The impairment charge was recorded in impairment of goodwill ($665 million) and marketing, administration and research costs ($15 million) in the condensed consolidated statements of earnings during the six months ended June 30, 2023 and was included in the Wellness and Healthcare segment results. During the first quarter of 2024, we recorded an impairment charge of $27 million (representing $20 million net of income tax or $0.01 per share decrease in diluted EPS), primarily reflecting the impairment of non-amortizable intangible assets related to an in-process research and development project in the Wellness and Healthcare segment. The impairment charge of $27 million was recorded in marketing, administration and research costs in the condensed consolidated statements of earnings during the six months ended June 30, 2024. For further details, see Note 4. Goodwill and Other Intangible Assets, net.
Previous wording
Swedish Match AB acquisition accounting related items – During the first quarter of 2023, we recorded pre-tax purchase accounting adjustments of $18 million related to the sale of acquired inventories stepped up to fair value (representing $13 million net of income tax and a diluted EPS charge of $0.01 per share). These pre-tax adjustments were recorded in cost of sales in the condensed consolidated statements of earnings for the three months ended March 31, 2023.
Current wording
Swedish Match AB acquisition accounting related items – During the first quarter of 2023, we recorded pre-tax purchase accounting adjustments of $18 million related to the sale of acquired inventories stepped up to fair value (representing $13 million net of income tax and a diluted EPS charge of $0.01 per share). These pre-tax adjustments were recorded in cost of sales in the condensed consolidated statements of earnings for the six months ended June 30, 2023.
Previous wording
Income taxes – The Income tax impact associated with Swedish Match financing that increased our 2023 diluted EPS by $0.05 per share and decreased our 2024 diluted EPS by $0.07 per share in the table above was due to a deferred tax impact for unrealized foreign currency gains and losses on intercompany loans related to the Swedish Match acquisition financing reflected in the condensed consolidated statements of earnings, while the underlying pre-tax foreign currency movements fully offset in the condensed consolidated statements of earnings and were reflected as currency translation adjustments in the condensed consolidated statements of stockholders' (deficit) equity. The 2024 tax items that increased our 2024 diluted EPS by $0.03 per share in the table above were due to a U.S. tax benefit for a worthless stock deduction under section 165(g) of the Internal Revenue Code related to PMI’s investment in C.A. Tabacalera Nacional, a wholly owned foreign corporation incorporated in Venezuela. The change in the tax rate that decreased our diluted EPS by $0.02 per share in the table above was primarily due to increases in U.S. state tax expense and repatriation cost differences, partially offset by changes in earnings mix by taxing jurisdiction.
Current wording
Income taxes – The Income tax impact associated with Swedish Match financing that increased our 2023 diluted EPS by $0.06 per share and decreased our 2024 diluted EPS by $0.09 per share in the table above was due to a deferred tax impact for unrealized foreign currency gains and losses on intercompany loans related to the Swedish Match acquisition financing reflected in the condensed consolidated statements of earnings, while the underlying pre-tax foreign currency movements fully offset in the condensed consolidated statements of earnings and were reflected as currency translation adjustments in the condensed consolidated statements of stockholders' (deficit) equity. The 2024 tax items that increased our 2024 diluted EPS by $0.03 per share in the table above were due to a U.S. tax benefit for a worthless stock deduction under section 165(g) of the Internal Revenue Code related to PMI’s investment in C.A. Tabacalera Nacional, a wholly owned foreign corporation incorporated in Venezuela. The change in the tax rate that decreased our diluted EPS by $0.06 per share in the table above was primarily due to increases in U.S. state tax expense, repatriation cost differences, and changes in earnings mix by taxing jurisdiction.
Previous wording
Currency– The unfavorable impact of $0.20 per share during the reporting period primarily results from the fluctuations of the U.S. dollar, especially against the Egyptian pound, Japanese yen and Russian ruble. This unfavorable currency movement has impacted our profitability across our primary revenue markets and local currency cost bases.
Current wording
Currency– The unfavorable impact of $0.38 per share during the reporting period primarily results from the fluctuations of the U.S. dollar, especially against the Egyptian pound, Japanese yen and Russian ruble. This unfavorable currency movement has impacted our profitability across our primary revenue markets and local currency cost bases.
Previous wording
Interest – The unfavorable impact of $0.03 per share from interest in the table above was due primarily to higher average debt levels and higher average interest rates on debt.
Current wording
Interest – The unfavorable impact of $0.04 per share from interest in the table above was primarily due to higher average debt levels and higher average interest rates on debt.
Previous wording
Operations – The increase in diluted EPS of $0.37 from our operations in the table above was due primarily to the following segments:
Current wording
Operations – The increase in diluted EPS of $0.60 from our operations in the table above was due primarily to the following segments:
Previous wording
•SSEA, CIS & MEA: Favorable pricing and favorable volume/mix, partly offset by higher manufacturing costs; and
Current wording
•SSEA, CIS & MEA: Favorable pricing and favorable volume/mix, partly offset by higher manufacturing costs;
Previous wording
•EA, AU & PMI DF: Favorable pricing, favorable volume/mix and lower shipping costs;
Current wording
•EA, AU & PMI DF: Favorable pricing and favorable volume/mix;
Previous wording
•Europe: Favorable pricing and favorable volume/mix, partly offset by higher manufacturing costs;
Current wording
•Europe: Favorable pricing and favorable volume/mix, partly offset by higher marketing, administration and research costs and manufacturing costs; and
Previous wording
•Americas: Favorable volume/mix, partly offset by higher marketing and administration costs.
Current wording
•Americas: Favorable volume/mix and favorable pricing, partly offset by higher marketing and administration costs.
Previous wording
•Net Revenues - Net revenues of $8.8 billion for the three months ended March 31, 2024 increased by $0.8 billion, or 9.7%, from the comparable 2023 amount. The change in our net revenues from the comparable 2023 amount was driven by the following (variances not to scale with quarterly results):
Current wording
•Net Revenues - Net revenues of $9.5 billion for the three months ended June 30, 2024, increased by $0.5 billion, or 5.6%, from the comparable 2023 amount. The change in our net revenues from the comparable 2023 amount was driven by the following (variances not to scale with quarterly results):
Previous wording
Fair value adjustment for equity security investments –During the first quarter of 2024, we recorded a favorable fair value adjustment for our equity security investments in India and Sri Lanka ($0.08 per share increase in diluted EPS). For further details, see Note 12. Related Parties - Equity Investments and Other.
Current wording
Fair value adjustment for equity security investments –During the second quarter of 2023, we recorded an unfavorable fair value adjustment for our equity security investments in India and Sri Lanka of $15 million after tax (or $0.01 per share decrease in diluted EPS). During the second quarter of 2024, we recorded a favorable fair value adjustment for our equity security investments in India and Sri Lanka of $116 million after tax (or $0.08 per share increase in diluted EPS). For further details, see Note 12. Related Parties - Equity Investments and Other.
Previous wording
Amortization of intangibles –During the first quarter of 2023 and 2024, we recorded amortization of intangible expense of $81 million (representing $64 million net of income tax or $0.04 per share decrease in diluted EPS) and $120 million (representing $95 million net of income tax or $0.06 per share decrease in diluted EPS), respectively. For further details, see Note 4. Goodwill and Other Intangible Assets, net.
Current wording
Amortization of intangibles –During the second quarter of 2023 and 2024, we recorded amortization of intangible expense of $82 million (representing $64 million net of income tax or $0.04 per share decrease in diluted EPS) and $212 million (representing $165 million net of income tax or $0.11 per share decrease in diluted EPS), respectively. The higher 2024 amount includes the reacquired rights recorded as other intangible assets, net following the reacquisition of IQOS commercialization rights in the U.S. from Altria Group, Inc. For further details, see Note 4. Goodwill and Other Intangible Assets, net.
Previous wording
See pages 82-94 for a discussion of our "Cautionary Factors That May Affect Future Results." Our net revenues and operating income by segment are shown in the table below:
Current wording
See pages 100-111 for a discussion of our "Cautionary Factors That May Affect Future Results." Our net revenues and operating income by segment are shown in the table below:
Previous wording
•Asset impairment and exit costs – See Note 15. Asset Impairment and Exit Costs for a breakdown of these costs by segment for the three months ended March 31, 2024 and 2023.
Current wording
•Asset impairment and exit costs – See Note 15. Asset Impairment and Exit Costs for a breakdown of these costs by segment for the six months ended June 30, 2024 and 2023.
Previous wording
•Termination of distribution arrangement in the Middle East– In the first quarter of 2023, PMI recorded a pre-tax charge of $80 million following the termination of a distribution arrangement in the Middle East. This pre-tax charge was recorded as a reduction of net revenues in the condensed consolidated statements of earnings, and was included in the SSEA, CIS & MEA segment results for the three months ended March 31, 2023.
Current wording
•Termination of distribution arrangement in the Middle East– In the first quarter of 2023, PMI recorded a pre-tax charge of $80 million following the termination of a distribution arrangement in the Middle East. This pre-tax charge was recorded as a reduction of net revenues in the condensed consolidated statements of earnings, and was included in the SSEA, CIS & MEA segment results for the six months ended June 30, 2023.
Previous wording
Net revenues related to wellness and healthcare consist of operating revenues generated from the sale of products primarily associated with inhaled therapeutics, and oral and intra-oral delivery systems that are included in the operating results of our
Current wording
Net revenues related to wellness and healthcare consist of operating revenues generated from the sale of products primarily associated with inhaled therapeutics, and oral and intra-oral delivery systems that are included in the operating results of our Wellness and Healthcare business, Vectura Fertin Pharma.
Previous wording
References to "Cost/Other" in the Consolidated Financial Summary table of total PMI and the five segments throughout this"Discussion and Analysis" reflects the currency-neutral variances of: cost of sales (excluding the volume/mix cost component); marketing, administration and research costs (including asset impairment and exit costs); and amortization and impairment of intangibles. “Cost/Other” also includes the currency-neutral net revenue variance, unrelated to volume/mix and price components, attributable to: fees for certain distribution rights billed to customers in certain markets in the SSEA, CIS & MEA Region and the revenue adjustment for the termination of a distribution arrangement in the Middle East.
Current wording
References to "Cost/Other" in the Consolidated Financial Summary table of total PMI and the five segments throughout this"Discussion and Analysis" reflects the currency and acquisition-neutral variances of: cost of sales (excluding the volume/mix cost component); marketing, administration and research costs (including asset impairment and exit costs); and amortization and impairment of intangibles. “Cost/Other” also includes the currency and acquisition-neutral net revenue variance, unrelated to volume/mix and price components, attributable to: fees for certain distribution rights billed to customers in certain markets in the SSEA, CIS & MEA Region and the revenue adjustment for the termination of a distribution arrangement in the Middle East.
Previous wording
Nicotine pouch products reflect 15 pouches per can in the U.S. and 21 pouches per can outside the U.S. Oral smoke-free product volume excludes snuff, snuff leaf and U.S. chew and is measured in cans or, for the purposes of total shipment volumes, in pouches or pouch equivalents.
Current wording
Oral smoke-free product volume excludes snuff, snuff leaf and U.S. chew and is measured in cans or, for the purposes of total shipment volumes, in pouches or pouch equivalents.
Previous wording
Key market data regarding total market size, our shipments and market share of cigarettes and heated tobacco units are shown in the table below:
Current wording
Key market data regarding total market size, our shipments and market share of cigarettes and heated tobacco units are shown in the tables below:
Previous wording
Our total oral product shipment volume in cans increased by 40.0%, primarily reflecting growth in nicotine pouches (primarily in the U.S.) and snus (mainly in Scandinavia).
Current wording
Our total oral product shipment volume in cans increased by 31.2%, primarily reflecting growth in nicotine pouches.
Previous wording
For the full year 2024, we currently expect the total cigarette, HTU and oral smoke-free product shipment volume growth for PMI of flat to +1% driven by smoke-free products.
Current wording
For the full year 2024, we currently expect the total cigarette, HTU and oral smoke-free product shipment volume growth for PMI of 1% to 2% driven by smoke-free products.
Previous wording
For the full year 2024, we also expect nicotine pouch shipment volume in the U.S. of approximately 560 million cans.
Current wording
For the full year 2024, we also expect nicotine pouch shipment volume in the U.S. of 560 to 580 million cans.
Previous wording
Adjusted in-market sales for HTUs increased by 12.5%, including growth in Japan of 13.3% and Europe of 9.4%. A net favorable impact of estimated distributor inventory movements for HTUs shipments was driven most significantly by additional shipments to Japan in light of disruption to Red Sea shipping routes.
Current wording
Adjusted in-market sales for HTUs increased by 11.4%, including growth in Japan of 12.9% and Europe of 8.0%. A net favorable impact of estimated distributor inventory movements for HTU shipments was driven most significantly by additional shipments to Japan in light of disruption to Red Sea shipping routes.
Previous wording
(1) Cost/Other variance includes charges in 2023 of $80 million following the termination of a distribution arrangement in the Middle East.
Current wording
(1) Cost/Other variance includes charges in 2023 of$80 million following the termination of a distribution arrangement in the Middle East.
Previous wording
(3) Cost/Other variance includes charges in 2024 and 2023 of $168 million and $109 million related to asset impairment and exit costs, respectively, as well as the 2024 impairment of other intangibles of $27 million. For more details, see Note 4. Goodwill and Other Intangible Assets, net and Note 15. Asset Impairment and Exit Costs.
Current wording
(2) Cost/Other variance includes charges in 2024 of $168 million related to asset impairment and exit costs, $300 million related to amortization of intangibles and $27 million related to impairment of other intangibles, partly offset by charges in 2023 of $109 million related to asset impairment and exit costs, $204 million related to the South Korea indirect tax charge, $119 million related to amortization of intangibles and $15 million related to the impairment of other intangibles. For more details, see Note 4. Goodwill and Other Intangible Assets, net, Note 7. Segment Reporting and Note 15. Asset Impairment and Exit Costs.
Previous wording
During the quarter, net revenues increased by 9.7%. Net revenues, excluding currency, increased by 12.1%, mainly reflecting: a favorable pricing variance, primarily driven by higher combustible tobacco pricing; and favorable volume/mix, mainly driven by higher HTU and ZYN volume, partially offset by lower cigarette volume, as well as a favorable comparison to 2023 reflecting a charge in the first quarter of 2023 of $80 million following the termination of a distribution arrangement in the Middle East, shown in "Other."
Current wording
For the six months ended June 30, 2024, net revenues increased by 7.5%. Net revenues, excluding currency and acquisitions, increased by 10.8%, mainly reflecting: a favorable pricing variance, primarily driven by higher combustible tobacco pricing; and favorable volume/mix, driven by higher smoke-free products volume, partly offset by unfavorable cigarette mix, as well as a favorable comparison to 2023 reflecting a charge in the first quarter of 2023 of $80 million (recognized as a reduction of net revenues in 2023) following the termination of a distribution arrangement in the Middle East, shown in "Other."
Previous wording
The unfavorable currency in net revenues was due primarily to the Egyptian pound, Japanese yen and Russian ruble, partially offset by the Euro.
Current wording
The unfavorable currency impact in net revenues was due primarily to the Egyptian pound, Japanese yen and Russian ruble.
Previous wording
Net revenues include $3.4 billion in 2024 and $2.8 billion in 2023 related to smoke-free.
Current wording
Net revenues include $7.0 billion in 2024 and $6.0 billion in 2023 related to smoke-free.
Previous wording
Operating income increased by 11.5%. Operating income, excluding currency, increased by 23.5%, primarily reflecting: a favorable pricing variance and favorable volume/mix, mainly driven by higher HTU and ZYN volume, partly offset by lower cigarette volume and unfavorable cigarette mix, as well as a favorable comparison to 2023 reflecting a charge in 2023 of $80 million following the termination of a distribution arrangement in the Middle East and charges in 2023 of $18 million related to a Swedish Match AB acquisition accounting related item. The increase was partly offset by higher amortization of intangibles in 2024, higher asset impairment and exit costs in 2024, higher marketing, administration and research costs (primarily due to inflationary impacts, notably related to wages) and higher manufacturing costs.
Current wording
Operating income increased by 22.5%. Operating income, excluding currency and acquisitions, increased by 34.7%, primarily reflecting: the favorable pricing variance, predominantly driven by higher combustible tobacco pricing; and favorable volume/mix, mainly driven by higher smoke-free products volume, as well as a favorable comparison to 2023 reflecting the impairment of goodwill recorded in the second quarter of 2023, the South Korea indirect tax charge of $204 million in 2023, a charge in 2023 of $80 million following the termination of a distribution arrangement in the Middle East and charges in 2023 of $18 million related to Swedish Match AB acquisition accounting related items. The increase was partly offset by higher amortization of intangibles in 2024, higher asset impairment and exit costs in 2024, higher marketing, administration and research costs (primarily due to inflationary impacts, notably related to wages, and higher commercial investments) as well as higher manufacturing costs (primarily due to inflationary impacts, notably related to tobacco leaf and the impact of the EU single-use plastics directive, partly offset by productivity).
Previous wording
Amortization expense on a pre-tax basis for each of the next five years is estimated to be approximately $479 million or less, assuming no additional transactions occur that require the amortization of intangible assets. Additionally, the estimated future amortization expense could significantly increase following the reacquisition of IQOS commercialization rights in the U.S. from Altria Group, Inc. (see Note 18. Acquisitions and the "Business Environment" section of this MD&A), the accounting for which will depend on the facts and circumstances effective May 1, 2024, when PMI will hold the full rights. We currently estimate that the incremental increase in amortization expense in 2024, as a result of the reacquisition of IQOS commercialization rights in the U.S., will be approximately $370 million on a pre-tax basis for the remaining 8 months of the year. For full year 2025 through 2028, we currently estimate that this incremental increase will be approximately $555 million on a pre-tax basis.
Current wording
Amortization expense on a pre-tax basis for each of the next five years is estimated to be approximately $1.0 billion or less, assuming no additional transactions occur that require the amortization of intangible assets. This amount includes the reacquired rights recorded as other intangible assets, net, in May 2024 following the reacquisition of IQOS commercialization rights in the U.S. from Altria Group, Inc. (see Note 4. Goodwill and Other Intangible Assets, net, Note 18. Acquisitions and the "Business Environment" section of this MD&A for details).
Previous wording
Interest expense, net, of $299 million increased by $69 million or 30.0%, primarily due to higher average debt levels and higher average interest rates on debt.
Current wording
Interest expense, net, of $628 million increased by $101 million or 19.2%, primarily due to higher average debt levels and higher average interest rates on debt.
Previous wording
Our effective tax rate increased by 7.5 percentage points to 24.8%. For further details, see Note 9. Income Taxes. PMI estimates that its full-year 2024 effective tax rate will be approximately 21% to 22%, excluding discrete tax events. Changes in currency exchange rates, earnings mix by taxing jurisdiction or future legislative or regulatory developments may have an impact on the effective tax rates, which PMI monitors each quarter. Significant judgment is required in determining income tax provisions and in evaluating tax positions.
Current wording
Our effective tax rate increased by 3.4 percentage points to 24.2%. For further details, see Note 9. Income Taxes. PMI estimates that its full-year 2024 effective tax rate will be approximately 21% to 22%, excluding discrete tax events. Changes in currency exchange rates, earnings mix by taxing jurisdiction or future legislative or regulatory developments may have an impact on the effective tax rates, which PMI monitors each quarter. Significant judgment is required in determining income tax provisions and in evaluating tax positions.
Previous wording
Income from equity investments and securities increased by $140 million or over 100%, primarily driven by a favorable fair value adjustment for our equity security investments in India and Sri Lanka.
Current wording
Income from equity investments and securities increased by $322 million or over 100%, primarily driven by a favorable fair value adjustment for our equity security investments in India and Sri Lanka.
Showing the first 40 of 141 pairs. Open the source sections for the rest.
Rearranged current paragraphs (23)
Current report — wording carried from elsewhere
•Net Revenues - Net revenues of $18.3 billion for the six months ended June 30, 2024, increased by $1.3 billion, or 7.5%, from the comparable 2023 amount. The change in our net revenues from the comparable 2023 amount was driven by the following (variances not to scale with year-to-date results):
Current report — wording carried from elsewhere
Net revenues by product category for the six months ended June 30, 2024 and 2023 are shown below:
Current report — wording carried from elsewhere
•Diluted Earnings Per Share - The changes in our reported diluted EPS for the three months ended June 30, 2024, from the comparable 2023 amounts, were as follows:
Current report — wording carried from elsewhere
Income taxes – The Income tax impact associated with Swedish Match financing that increased our 2023 diluted EPS by $0.01 per share and decreased our 2024 diluted EPS by $0.02 per share in the table above was due to a deferred tax impact for unrealized foreign currency gains and losses on intercompany loans related to the Swedish Match acquisition financing reflected in the condensed consolidated statements of earnings, while the underlying pre-tax foreign currency movements fully offset in the condensed consolidated statements of earnings and were reflected as currency translation adjustments in the condensed consolidated statements of stockholders' (deficit) equity. The change in the tax rate that decreased our diluted EPS by $0.05 per share in the table above was primarily due to increases in U.S. state tax expense, repatriation cost differences, and changes in earnings mix by taxing jurisdiction.
Current report — wording carried from elsewhere
Currency– The unfavorable impact of $0.18 per share during the reporting period primarily results from the fluctuations of the U.S. dollar, especially against the Egyptian pound, Japanese yen, Russian ruble and Turkish lira. This unfavorable currency movement has impacted our profitability across our primary revenue markets and local currency cost bases.
Current report — wording carried from elsewhere
Operations – The increase in diluted EPS of $0.23 from our operations in the table above was due primarily to the following segments:
Current report — wording carried from elsewhere
•SSEA, CIS & MEA: Favorable pricing and favorable volume/mix, partly offset by higher manufacturing costs;
Current report — wording carried from elsewhere
•EA, AU & PMI DF: Favorable pricing and favorable volume/mix; and
Current report — wording carried from elsewhere
Estimated international industry volume (excluding China and the U.S.) for cigarettes and HTUs increased by 1.1%, reflecting increase in the SSEA, CIS & MEA Region, partly offset by decreases in the Europe and Americas Regions, and broadly stable in the EA, AU & PMI DF Region, as described in the Regional sections of this MD&A.
Current report — wording carried from elsewhere
Our total oral product shipment volume in cans increased by 23.5%, predominantly reflecting growth in nicotine pouches.
Current report — wording carried from elsewhere
International Share of Market - Cigarette and HTUs (Excluding China and the United States)
Current report — wording carried from elsewhere
The unfavorable currency impact in net revenues was due primarily to the Egyptian pound, Japanese yen and Russian ruble.
Current report — wording carried from elsewhere
Income from equity investments and securities increased by $182 million or over 100%, primarily driven by a favorable fair value adjustment for our equity security investments in India and Sri Lanka.
Current report — wording carried from elsewhere
Net earnings attributable to PMI of $2.4 billion increased by $838 million or 53.4%. This increase was due primarily to higher operating income and higher income from equity investments and securities, partly offset by higher interest expense, net, as discussed above. Basic and diluted EPS of $1.54 increased by 52.5%. Excluding an unfavorable currency impact of $0.18, diluted EPS increased by 70.3%.
Current report — wording carried from elsewhere
2% reduction target of the impact assessment with decreased smoking prevalence among youth. The report also concludes that there is scope for improvement in certain areas, such as enforcement at national level, assessment of ingredients, and a better consideration for novel and emerging products.
Current report — wording carried from elsewhere
Commission approved a draft national decree submitted by Belgium banning disposable e-cigarettes in Belgium as required by TPD. This ban will be limited to the jurisdiction of Belgium.
Current report — wording carried from elsewhere
Platform 1 uses a precisely controlled heating device incorporating our IQOS HeatControl technology, into which a specially designed and proprietary tobacco unit is inserted in a holder and heated to generate an aerosol. We have conducted a series of clinical studies for this platform, the results of which were included in our submissions to the U.S. Food and Drug
Current report — wording carried from elsewhere
Premarket tobacco applications for certain ZYN products, which are currently marketed in the U.S., were submitted in March 2020. In the same month, these applications were filed for scientific review and in July 2020 the FDA issued a deficiency letter which Swedish Match USA, Inc. addressed in September 2020. The FDA has not completed its review of such applications but, consistent with its practice concerning products with respect to which applications were filed prior to a September 9, 2020 deadline, the FDA has not taken enforcement action to prevent these ZYN products from being marketed or indicated that it intends to do so. After the September 9, 2020 deadline, we also submitted additional applications for authorization to market other ZYN products. As these applications proceed through the review process, the FDA may request additional information or conduct subsequent inspections to verify the submitted information. We are unable to market these products until the FDA authorizes such applications.
Current report — wording carried from elsewhere
Our HTU share of the total cigarette and HTU market in the Region increased by 0.8 points on an adjusted basis.
Current report — wording carried from elsewhere
Our estimated HTU adjusted in-market sales volume in the Region increased by 8.0%, reflecting continued growth momentum for IQOS, partly offset by the impact from the EU characterizing flavor ban.
Current report — wording carried from elsewhere
Operating income decreased by 24.7%. Operating income, excluding currency and acquisitions, decreased by 39.1%, mainly reflecting: higher amortization of intangibles and higher marketing and administration costs, including incremental investment in the U.S. The decrease was partly offset by a favorable volume/mix and pricing variance, mainly due to the same factors as for net revenues.
Current report — wording carried from elsewhere
For the six months year-to-date, the estimated total market for cigarettes and HTUs in the Region, excluding the U.S., decreased by 2.8% to 89.9 billion units, primarily reflecting a decline for cigarettes. The decrease in the estimated total market was mainly due to Argentina (down by 13.8%) and Canada (down by 12.9%), partly offset by Brazil (up by 6.5%).
Current report — wording carried from elsewhere
(b) Interest is payable annually, commencing in January 2025
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
As of March 31, 2024, many countries have enacted the OECD’s framework on a global minimum tax (referred to as “Pillar Two”). PMI has determined that Pillar Two should not have a material impact on its 2024 consolidated financial statements. For further details, see Note 9. Income Taxes.
Previous report — wording carried elsewhere
Wellness and Healthcare business, Vectura Fertin Pharma.
Previous report — wording carried elsewhere
Promotion, and Sponsorship ("TAPS") and the depiction of tobacco in entertainment media. The Eleventh session of the CoP is currently scheduled to take place in 2025.