Philip Morris International Inc.

Previous wording

IQOS, ZYN and VEEV are the leading brands in our SFPs portfolio. As of December 31, 2024, our smoke-free products were available for sale in 95 markets.

Current wording

IQOS, ZYN and VEEV are the leading brands in our SFPs portfolio. As of June 30, 2025, our smoke-free products were available for sale in 97 markets.

Previous wording

•Diluted Earnings Per Share - The changes in our reported diluted earnings per share (“diluted EPS”) for the three months ended March 31, 2025, from the comparable 2024 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, 2025, from the comparable 2024 amounts, were as follows:

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 our Wellness and Healthcare business.

Current wording

Impairment of goodwill and 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 our Wellness and Healthcare business. During the second quarter of 2025, after the completion of our annual review of goodwill, it was determined that the estimated fair value of a reporting unit included within the Europe segment was lower than its carrying value. Consequently, PMI recorded a goodwill impairment charge of$41 million (representing a $0.03 per share decrease in diluted EPS). For further details on the goodwill impairment charge, see Note 5. Goodwill and Other Intangible Assets, net.

Previous wording

Amortization of intangibles –During the first quarter of 2024 and 2025, we recorded amortization of intangible expense of $120 million (representing $95 million net of income tax or $0.06 per share decrease in diluted EPS) and $246 million (representing $191 million net of income tax or $0.12 per share decrease in diluted EPS), respectively. The higher 2025 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., effective in May 2024. For further details, see Note 5. Goodwill and Other Intangible Assets, net.

Current wording

Amortization of intangibles –During the six months ended June 30, 2024 and 2025, we recorded amortization of intangible expense of $332 million (representing $260 million net of income tax or $0.17 per share decrease in diluted EPS) and$496 million (representing$385 million net of income tax or $0.24 per share decrease in diluted EPS), respectively. The higher 2025 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., effective in May 2024. For further details, see Note 5. Goodwill and Other Intangible Assets, net.

Previous wording

Income taxes – The Income tax impact associated with Swedish Match financing that decreased our 2024 diluted EPS by $0.07 per share and increased our 2025 diluted EPS by $0.06 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.

Current wording

Income taxes – The Income tax impact associated with Swedish Match AB financing that decreased our 2024 diluted EPS by $0.09 per share and increased our 2025 diluted EPS by $0.24 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.

Previous wording

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.

Current wording

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 2025 tax items that decreased our 2025 diluted EPS by $0.03 per share in the table above were due to the recognition of current tax expense related to the potential disallowance of deductions for certain intercompany transactions in Indonesia.

Previous wording

Currency– The unfavorable impact of $0.07 per share during the reporting period primarily results from the fluctuations of the U.S. dollar, especially against the Egyptian pound, Japanese yen, Mexican peso 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 $0.05 per share during the reporting period primarily results from the fluctuations of the U.S. dollar, especially against the Russian ruble and Swiss franc, partly offset by the Euro and Japanese yen. This unfavorable currency movement has impacted our profitability across our primary revenue markets and local currency cost bases.

Previous wording

Interest – The favorable impact of $0.03 per share from interest in the table above was primarily due to a favorable mark-to-market adjustment related to derivative financial instruments and a lower average debt level.

Current wording

Interest – The favorable impact of $0.05 per share from interest in the table above was primarily due to a lower weighted average cost of debt, including the favorable impact of derivative financial instruments.

Previous wording

Operations – The increase in diluted EPS of $0.26 from our operations in the table above was due primarily to the following segments:

Current wording

Operations – The increase in diluted EPS of $0.56 from our operations in the table above was due primarily to the following segments:

Previous wording

•SSEA, CIS & MEA: Favorable pricing and higher cigarette volume and HTU volume, partly offset by higher manufacturing costs and higher marketing, administration and research costs; and

Current wording

•SSEA, CIS & MEA: Favorable pricing and higher cigarette volume and HTU volume, partly offset by higher manufacturing costs and higher marketing, administration and research costs;

Previous wording

•Americas: Favorable volume/mix and a favorable pricing variance, partly offset by higher marketing, administration and research costs;

Current wording

•Americas: Favorable volume/mix and a favorable pricing variance, partly offset by higher marketing, administration and research costs and higher manufacturing costs; and

Previous wording

•Net Revenues - Net revenues of $9.3 billion for the three months ended March 31, 2025, increased by $0.5 billion, or 5.8%, from the comparable 2024 amount. The change in our net revenues from the comparable 2024 amount was driven by the following (variances not to scale with quarterly results):

Current wording

•Net Revenues - Net revenues of $10.1 billion for the three months ended June 30, 2025, increased by $0.7 billion, or 7.1%, from the comparable 2024 amount. The change in our net revenues from the comparable 2024 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 and 2025, we recorded fair value adjustments for our equity security investments in India and Sri Lanka of $126 million after tax gain (or $0.08 per share increase in diluted EPS) and $143 million after tax gain (or $0.09 per share increase in diluted EPS), respectively. For further details, see Note 13. Related Parties - Equity Investments and Other.

Current wording

Fair value adjustment for equity security investments –During the second quarter of 2024 and 2025, we recorded fair value adjustments for our equity security investments in India and Sri Lanka of $116 million after tax gain (or $0.08 per share increase in diluted EPS) and $267 million after tax gain (or $0.17 per share increase in diluted EPS), respectively. For further details, see Note 13. Related Parties - Equity Investments and Other.

Previous wording

Restructuring charges – During the first quarter of 2024, we recorded pre-tax restructuring charges 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 16. Restructuring Activities.

Current wording

Restructuring charges – During the second quarter of 2025, we recorded pre-tax restructuring charges of $243 million, representing $200 million net of income tax and a diluted EPS charge of $0.13 per share, related to the end of combustible tobacco production in two of our factories in Germany. For further details, see Note 16. Restructuring Activities.

Previous wording

See pages 79 -91 for a discussion of our "Cautionary Factors That May Affect Future Results." Net revenues, significant expenses, and operating income by segment were as follows:

Current wording

See pages 96 -108 for a discussion of our "Cautionary Factors That May Affect Future Results." Net revenues, significant expenses, and operating income by segment were as follows:

Previous wording

•Restructuring charges - See Note 16. Restructuring Activities for a breakdown of these costs by segment for the three months ended March 31, 2024.

Current wording

•Restructuring charges – See Note 16. Restructuring Activities for a breakdown of these costs by segment for the six months and three months ended June 30, 2025 and 2024.

Previous wording

Our total shipment volume, including cigarettes and smoke-free products (in equivalent units), increased by 3.9% with smoke-free volumes up by 14.4%, with all SFP categories growing strongly, and cigarette volumes up by 1.1% driven by SSEA, CIS & MEA region.

Current wording

Our shipment volume, including cigarettes and smoke-free products (in equivalent units), increased by 2.5% with smoke-free volumes up by 13.1%, with all SFP categories growing strongly, and cigarette volumes down by 0.3%.

Previous wording

For the full year 2025, we currently expect total cigarette and smoke-free product shipment volume growth for PMI of up to 2% driven by smoke-free products volume growth of 12% to 14%.

Current wording

For the full year 2025, we currently expect total cigarette and smoke-free product shipment volume growth for PMI of around 1%. We continue to expect smoke-free product volume growth of 12% to 14%, partly offset by cigarette volume declines which we now forecast to be around 2%. Given the cigarette dynamics, it is possible that in the second-half of 2025, we may see modest declines for total PMI volumes.

Previous wording

For the full year 2025, we also expect nicotine pouch shipment volume in the U.S. of 800 to 840 million cans.

Current wording

In the U.S., ZYN reaccelerated its consumer offtake growth, as measured by Nielsen, in the second quarter as in-store availability improved and legal-age consumers regain access to the full portfolio of ZYN offerings. Restocking was effectively completed in the first-half, with the estimated impact slightly lower than initially expected. In the third quarter, we expect a broadly similar level of ZYN shipments as in the second quarter. We continue to expect for the full year 2025 nicotine pouch shipment volume in the U.S. of 800 to 840 million cans, including a sequential step-up in the fourth quarter.

Previous wording

(1) Cost/Other variance includes higher amortization of intangibles in 2025, partly offset by charges in 2024 of $168 million related to restructuring charges and the 2024 impairment of other intangibles of $27 million. For more details, see Note 5. Goodwill and Other Intangible Assets, net and Note 16. Restructuring Activities.

Current wording

(1) Cost/Other variance includes charges in 2025 of $243 million related to restructuring charges and higher amortization of intangibles in 2025, partly offset by charges in 2024 of $168 million related to restructuring charges and the 2024 impairment of other intangibles of $27 million. For more details, see Note 5. Goodwill and Other Intangible Assets, net and Note 16. Restructuring Activities.

Previous wording

The unfavorable currency impact in net revenues was due primarily to the Euro, Indonesian rupiah, Japanese yen, Mexican peso and Russian ruble.

Current wording

The unfavorable currency impact in net revenues was due primarily to the Euro, Indonesian rupiah, Japanese yen and Mexican peso, partly offset by the Russian ruble.

Previous wording

Net revenues include $3.9 billion in 2025 and $3.4 billion in 2024 related to smoke-free.

Current wording

Net revenues include $8.1 billion in 2025 and $7.0 billion in 2024 related to smoke-free.

Previous wording

Interest expense, net, of $241 million decreased by $58 million or 19.4%, primarily due to a favorable mark-to-market adjustment related to derivative financial instruments and a lower average debt level.

Current wording

Interest expense, net, of $518 million decreased by $110 million or 17.5%, primarily due to a lower weighted average cost of debt, including the favorable impact of derivative financial instruments.

Previous wording

Our effective tax rate decreased by 4.8 percentage points to 20.0%. We estimate that our 2025 effective tax rate will be approximately 22.5% to 23.5%, excluding discrete tax events. For further details, see Note 10. Income Taxes.

Current wording

Our effective tax rate decreased by 4.7 percentage points to 19.5%. We estimate that our 2025 effective tax rate will be approximately 22% to 23%, excluding discrete tax events. For further details, see Note 10. Income Taxes.

Previous wording

Net earnings attributable to PMI of $2.7 billion increased by $0.5 billion or 25.2%. This increase was due primarily to higher operating income, a lower effective tax rate and lower interest expense, net, as discussed above. Basic and diluted EPS of $1.72 increased by 24.6%. Excluding an unfavorable currency impact of $0.07, diluted EPS increased by 29.7%.

Current wording

Net earnings attributable to PMI of $5.7 billion increased by $1.2 billion or 25.8%. This increase was due primarily to higher operating income, a lower effective tax rate and higher income from equity investments and securities, net. Basic and diluted EPS of $3.67 increased by 25.7%. Excluding an unfavorable currency impact of $0.05, diluted EPS increased by 27.4%.

Previous wording

During the quarter, estimated international industry volume (excluding China and the U.S.) for cigarettes and HTUs decreased by 0.6%.

Current wording

During the quarter, estimated industry volume (excluding China and the U.S.) for cigarettes and HTUs was broadly stable.

Previous wording

Segment Operating Results – Three Months Ended March 31, 2025

Current wording

Segment Operating Results – Three Months and Six Months Ended June 30, 2025

Previous wording

The following discussion compares operating results within each of our segments for the three months ended March 31, 2025, with the three months ended March 31, 2024.

Current wording

The following discussion compares operating results within each of our segments for the three months and six months ended June 30, 2025, with the three months and six months ended June 30, 2024.

Previous wording

Operating income increased by 1.8%. Operating income, excluding currency and acquisitions/divestitures, increased by 5.2%, primarily reflecting the same factors as for net revenues; largely offset by higher marketing, administration and research costs.

Current wording

Operating income increased by 2.5%. Operating income, excluding currency and acquisitions/divestitures, increased by 0.6%, primarily reflecting the same factors as for net revenues; largely offset by a restructuring charge in 2025 of $243 million and higher marketing, administration and research costs, as well as an impairment of goodwill charge in 2025 of $41 million.

Previous wording

In the first quarter, the estimated total market for cigarettes and HTUs decreased by 4.8% to 118.3 billion units, with a 6.6% decrease for cigarettes and continued HTU growth. Notable decreases in the estimated total market in Poland (down by 16.0%) and France (down by 12.8%) were partly offset by Bulgaria (up by 7.2%) and Luxembourg (up by 20.3%).

Current wording

In the second quarter, the estimated market for cigarettes and HTUs decreased by 1.2% to 136.7 billion units, with a 2.8% decrease for cigarettes and continued HTU growth. Notable decreases in Poland (down by 7.8%), Ukraine (down by 7.6%), and the Netherlands (down by 23.5%) were partly offset by Germany (up by 6.5%) and Italy (up by 4.0%).

Previous wording

In the first quarter, our HTU share of the total cigarette and HTU market increased by 1.2 points on an adjusted basis.

Current wording

In the second quarter, our HTU share of the total cigarette and HTU market increased by 1.2 points on an adjusted basis.

Previous wording

In the first quarter, oral SFP shipment volume decreased by 2.5% to 72.2 million cans mainly due to snus, partly offset by nicotine pouches.

Current wording

For the six months year-to-date, oral SFP shipments decreased by 1.3% to 142.9 million cans mainly due to snus, partly offset by nicotine pouches.

Previous wording

During the quarter, net revenues increased by 3.2%. Net revenues, excluding currency and acquisitions/divestitures, increased by 6.5%, primarily reflecting: a favorable pricing variance, predominantly driven by higher combustible tobacco pricing; while higher cigarette and HTU volume was offset by unfavorable cigarette mix due to the below mentioned commercial model change in Indonesia.

Current wording

During the quarter, net revenues increased by 5.6%. Net revenues, excluding currency and acquisitions/divestitures, increased by 4.9%, primarily reflecting: a favorable pricing variance, predominantly driven by higher combustible tobacco pricing; while higher cigarette and HTU volume was offset by unfavorable cigarette mix due to the below mentioned commercial model change in Indonesia.

Previous wording

Operating income increased by 19.2%. Operating income, excluding currency and acquisitions/divestitures, increased by 14.1%, primarily reflecting: a favorable pricing variance, predominantly driven by higher combustible tobacco pricing, as well as higher cigarette and HTU volume, partly offset by higher manufacturing costs (notably tobacco leaf) as well as marketing, administration and research costs.

Current wording

Operating income increased by 12.2%. Operating income, excluding currency and acquisitions/divestitures, increased by 17.4%, primarily reflecting: a favorable pricing variance, predominantly driven by higher combustible tobacco pricing, as well as higher cigarette and HTU volume, partly offset by higher marketing, administration and research costs as well as manufacturing costs (notably tobacco leaf).

Previous wording

Operating income increased by 19.7%. Operating income, excluding currency and acquisitions/divestitures, increased by 22.8%, driven by the same main factor as for net revenues and a comparison benefit from higher device shipments in the prior year, when ILUMA i was launched in Japan.

Current wording

Operating income increased by 13.3%. Operating income, excluding currency and acquisitions/divestitures, increased by 9.4%, driven by the same factor as for net revenues.

Previous wording

In the first quarter, the estimated total market for cigarettes and HTUs, excluding China, decreased by 2.0% to 74.4 billion units, with a decrease in cigarettes partly offset by HTU growth. The decrease in the estimated total market was mainly driven by South Korea (down by 6.4%) and Japan (down by 1.0%), partly offset by Global Travel Retail (up by 5.4%).

Current wording

In the second quarter, the estimated market for cigarettes and HTUs, excluding China, decreased by 0.7% to 79.8 billion units, with a decrease in cigarettes largely offset by HTU growth. The decrease in the estimated market was mainly driven by Australia (down by 50.2%) and South Korea (down by 2.4%), partly offset by Global Travel Retail (up by 7.8%).

Previous wording

In the first quarter, our total cigarette and HTU shipment volume increased by 5.9% to 28.8 billion units with growth in Japan (up by 5.3%) and Global Travel Retail (up by 25.7%), partly offset by Taiwan (down by 18.3%).

Current wording

In the second quarter, our cigarette and HTU shipment volume increased by 3.6% to 28.3 billion units with growth in Global Travel Retail (up by 23.0%) and Japan (up by 2.9%), partly offset by Australia (down by 83.4% predominantly due to shipment phasing).

Previous wording

During the quarter, net revenues increased by 27.2%. Net revenues, excluding currency and acquisitions/divestitures, increased by 32.0%, primarily reflecting: favorable volume/mix, predominantly driven by U.S. nicotine pouches, as well as a favorable pricing variance, driven by U.S. smoke-free products and cigarettes outside of the U.S.

Current wording

For the six months ended June 30, 2025, net revenues increased by 19.5%. Net revenues, excluding currency and acquisitions/divestitures, increased by 24.0%, primarily reflecting: favorable volume/mix, predominantly driven by SFP volume, as well as a favorable pricing variance, due to U.S. smoke-free products and cigarettes outside of the U.S.

Previous wording

Operating income increased by +100%. Operating income, excluding currency and acquisitions/divestitures, increased by +100%, mainly reflecting: the same factors as for net revenues, and a favorable comparison to 2024 reflecting the restructuring charges of $168 million in 2024; partly offset by higher marketing, administration and research costs, including incremental U.S. investments, as well as higher amortization of intangibles.

Current wording

Operating income increased by 64.9%. Operating income, excluding currency and acquisitions/divestitures, increased by 91.1%, mainly reflecting: the same factors as for net revenues, and a favorable comparison to 2024 reflecting the restructuring charges of $168 million in 2024; partly offset by higher manufacturing costs, higher marketing, administration and research costs, as well as higher amortization of intangibles.

Previous wording

In the first quarter, the estimated total market for cigarettes and HTUs, excluding the U.S., increased by 1.3% to 45.2 billion units, predominantly reflecting an increase in the cigarette market. The increase in the estimated total market was mainly due to Brazil (up by 12.7%), partly offset by Mexico (down by 9.9%) and Canada (down by 19.3%).

Current wording

In the second quarter, the estimated market for cigarettes and HTUs, excluding the U.S., decreased by 0.7% to 45.3 billion units, predominantly reflecting a decrease in the cigarette market. The decrease was mainly due to Canada (down by 11.3%) and Brazil (down by 1.6%), partly offset by Argentina (up by 8.3%) and Mexico (up by 3.6%).