Philip Morris International Inc.
For the period ended Sep 30, 2025. Filed Oct 24, 2025.
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.
Sep 30, 2025 · Filed Oct 24, 2025
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 2025-06-30; filed 2025-07-25.
0001413329-25-000150
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-10-24.
0001628280-25-046179
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 521 previous paragraphs and 544 current paragraphs.
353 unchanged; 131 reworded; 58 added; 30 removed; 7 previous and 2 current paragraphs rearranged.
Tables are not compared: 36 previous and 36 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 (58)
Current report
With our smoke-free business now operating at scale across our regions, including substantial growth from our U.S. business, PMI plans to implement an evolved organizational model with two primary business units: International and U.S. The updated organizational structure is designed to enhance our agility and to support our journey to become a smoke-free company under the leadership of CEO Jacek Olczak. This change is scheduled for implementation effective January 1, 2026, and as a result we anticipate realigning our reportable segments. The current four geographic segments will be replaced with three new segments: International Smoke-Free, International Combustibles, and U.S. The company plans to report its financial results based on the new segments as of the first quarter of 2026.
Current report
Consolidated Operating Results for the Nine Months Ended September 30, 2025
Current report
For the nine months ended September 30, 2025, net revenues increased by 7.5%. Net revenues, excluding currency and acquisitions/divestitures, also increased by 7.5%, mainly reflecting: a favorable pricing variance due to higher combustible tobacco pricing; and favorable volume/mix driven by higher smoke-free products volume, notwithstanding unfavorable mix and lower cigarette volumes.
Current report
Loss on sale of Vectura Group –In September 2024, we announced the execution of a definitive agreement to sell Vectura to Molex Asia Holdings Ltd. As a result, we recorded in the third quarter of 2024 an impairment charge of $198 million (representing a diluted EPS charge of $0.13 per share) related to Vectura's classification as held for sale. The impairment charge was recorded in marketing, administration and research costs in PMI’s condensed consolidated statements of earnings for nine months ended September 30, 2024, and was included in the Europe segment results. On December 31, 2024, we completed the sale. For further details, see Note 2. Acquisitions and Divestitures.
Current report
Egypt sales tax charge –In the third quarter of 2024, following a ruling issued by the Higher Administrative Court in Egypt and subsequent evaluation of available remedies, we concluded that an adverse outcome was probable and recorded a pre-tax charge of $45 million (representing $39 million net of income tax and a diluted EPS charge of $0.03 per share) in relation to tax assessments for general sales tax deducted on imported cutfiller for the years 2014 to 2016. This pre-tax charge was recorded in marketing, administration and research costs in the condensed consolidated statement of earnings for the nine months ended September 30, 2024, and was included in the SSEA, CIS & MEA segment results.
Current report
Germany excise tax classification litigation charge –In August 2024, the German Main Custom Office (“MCO”) notified Philip Morris (Germany) GmbH (“PM Germany”) of its decision to classify TEREA consumables as a cigarette for excise tax purposes with the associated tax assessment totaling EUR 151 million (approximately $176 million) covering the period of February 15, 2023, through August 1, 2024. In April 2025, PM Germany paid the outstanding amount, which was recorded in Other assets on the consolidated balance sheets (with no impact on the income statement at that time), while it challenged the MCO’s decision in court. On September 17, 2025, PM Germany filed a request to withdraw the proceedings. As a result, the tax assessment amount of $176 million (representing $150 million net of income tax and a diluted EPS charge of $0.10 per share) was recorded as a pre-tax charge in marketing, administration and research costs in the condensed consolidated statements of earnings in the third quarter of 2025, and was included in the Europe segment results. For further details, see Note 9. Contingencies.
Current report
RBH (Canada) Plan implementation, including dividend income, net – On August 29, 2025, the plan of compromise and arrangement (the “Plan”) setting forth the terms of a resolution of Canadian tobacco claims and related litigation became effective. For the nine months ended September 30, 2025, we recorded after-tax income of $156 million ($0.10 per share increase in diluted EPS) following the Plan implementation, including $303 million of dividend income net of the corresponding decrease in the carrying value of the RBH investment, $19 million of other income and the related income tax charge of ($166) million. For further details regarding the Plan, see Note 9. Contingencies, Note 10. Income Taxes and Note 13. Related Parties - Equity Investments and Other.
Current report
Impairment of Wellness & Healthcare related equity investment –In the third quarter of 2025, PMI recorded a non-cash after-tax charge of $146 million (representing a diluted EPS charge of $0.09 per share), primarily representing an other-than-temporary impairment of one equity method investment within the Wellness & Healthcare business following a reassessment of its estimated fair value triggered by the amendment of existing investment agreements in the third quarter of 2025. The impairment charge was recorded in equity investments and securities (income)/loss, net in in the condensed consolidated statements of earnings for the nine months ended September 30, 2025. For further details, see Note 13. Related Parties - Equity Investments and Other.
Current report
During the quarter, net revenues increased by 9.4%. Net revenues, excluding currency and acquisitions/divestitures, increased by 5.9%, mainly reflecting: a favorable pricing variance due to higher combustible tobacco pricing; and favorable volume/mix driven by higher smoke-free products volume, notwithstanding lower volumes and unfavorable mix for cigarettes.
Current report
Loss on sale of Vectura Group –In September 2024, we announced the execution of a definitive agreement to sell Vectura to Molex Asia Holdings Ltd. As a result, we recorded in the third quarter of 2024 an impairment charge of $198 million (representing a diluted EPS charge of $0.13 per share) related to Vectura's classification as held for sale. The impairment charge was recorded in marketing, administration and research costs in PMI’s condensed consolidated statements of earnings, and was included in the Europe segment results. On December 31, 2024, we completed the sale. For further details, see Note 2. Acquisitions and Divestitures.
Current report
Egypt sales tax charge –In the third quarter of 2024, following a ruling issued by the Higher Administrative Court in Egypt and subsequent evaluation of available remedies, we concluded that an adverse outcome was probable and recorded a pre-tax charge of $45 million (representing $39 million net of income tax and a diluted EPS charge of $0.03 per share) in relation to tax assessments for general sales tax deducted on imported cutfiller for the years 2014 to 2016. This pre-tax charge was recorded in marketing, administration and research costs in the condensed consolidated statement of earnings for the three months ended September 30, 2024, and was included in the SSEA, CIS & MEA segment results.
Current report
Germany excise tax classification litigation charge –In August 2024, the German Main Custom Office (“MCO”) notified Philip Morris (Germany) GmbH (“PM Germany”) of its decision to classify TEREA consumables as a cigarette for excise tax purposes with the associated tax assessment totaling EUR 151 million (approximately $176 million) covering the period of February 15, 2023, through August 1, 2024. In April 2025, PM Germany paid the outstanding amount, which was recorded in Other assets on the consolidated balance sheets (with no impact on the income statement at that time), while it challenged the MCO’s decision in court. On September 17, 2025, PM Germany filed a request to withdraw the proceedings. As a result, the tax assessment amount of $176 million (representing $150 million net of income tax and a diluted EPS charge of $0.10 per share) was recorded as a pre-tax charge in marketing, administration and research costs in the condensed consolidated statements of earnings in the third quarter of 2025, and was included in the Europe segment results. For further details, see Note 9. Contingencies.
Current report
RBH (Canada) Plan implementation, including dividend income, net – On August 29, 2025, the plan of compromise and arrangement (the “Plan”) setting forth the terms of a resolution of Canadian tobacco claims and related litigation became effective. For the three months ended September 30, 2025, we recorded after-tax income of $156 million ($0.10 per share increase in diluted EPS) following the Plan implementation, including $303 million of dividend income net of the corresponding decrease in the carrying value of the RBH investment, $19 million of other income and the related income tax charge of ($166) million. For further details regarding the Plan, see Note 9. Contingencies, Note 10. Income Taxes and Note 13. Related Parties - Equity Investments and Other.
Current report
Impairment of Wellness & Healthcare related equity investment –In the third quarter of 2025, PMI recorded a non-cash after-tax charge of $146 million (representing a diluted EPS charge of $0.09 per share), primarily representing an other-than-temporary impairment of one equity method investment within the Wellness & Healthcare business following a reassessment of its estimated fair value triggered by the amendment of existing investment agreements in the third quarter of 2025. The impairment charge was recorded in equity investments and securities (income)/loss, net in in the condensed consolidated statements of earnings. For further details, see Note 13. Related Parties - Equity Investments and Other.
Current report
The 2025 tax items that increased our 2025 diluted EPS by $0.14 per share in the table above were due to benefits related to an interest expense election primarily driven by a reduction in prior year tax costs associated with global intangible low-taxed income and refunds expected on amended tax returns filed in Germany; partially offset by valuation allowances recorded on deferred tax assets related to U.S. foreign tax credits. For further details, see Note 10. Income Taxes.
Current report
partly offset by
Current report
•Americas: Unfavorable pricing variance and higher marketing, administration and research costs, partly offset by higher SFP volumes.
Current report
•Germany excise tax classification litigation charge –See Note 9. Contingencies for details of the $176 million pre-tax charge recorded in the Europe segment for the nine months and three months ended September 30, 2025.
Current report
•Loss on sale of Vectura Group – In September 2024, PMI announced the execution of a definitive agreement to sell Vectura to Molex Asia Holdings Ltd. As a result, PMI recorded in the third quarter of 2024 an impairment charge of $198 million related to Vectura's classification as held for sale. This pre-tax charge was recorded in marketing, administration and research costs in the condensed consolidated statement of earnings for the nine months and three months ended September 30, 2024, and was included in the Europe segment results. On December 31, 2024, PMI completed the sale. For further details, see Note 2. Acquisitions and Divestitures.
Current report
•Egypt sales tax charge –In the third quarter of 2024, following a ruling issued by the Higher Administrative Court in Egypt and subsequent evaluation of available remedies, PMI concluded that an adverse outcome was probable and recorded a pre-tax charge of $45 million in relation to tax assessments for general sales tax deducted on imported cutfiller for the years 2014 to 2016. This pre-tax charge was recorded in marketing, administration and research costs in the condensed consolidated statement of earnings for the nine months and three months ended September 30, 2024, and was included in the SSEA, CIS & MEA segment results.
Current report
Consumer offtake or offtake is the term PMI uses to refer to an approximation of purchases by consumers based on various market specific sources.
Current report
Consolidated Operating Results for the Nine Months Ended September 30, 2025
Current report
In the U.S., the increase in ZYN nicotine pouch shipments in the third quarter was a result of underlying consumer offtake growth amplified by a wide range of commercial activities to further enhance the strength and presence of the brand, and ensure competitive price positioning following several quarters of reduced activity due to supply constraints. In addition, we implemented select short-term promotions, which separately accounted for a single digit percentage of our third quarter shipments. On a more short-term basis, we continue to expect second half shipment volume growth broadly in line with consumer offtake growth before channel inventory movements. We anticipate a 20 to 30 million can inventory reduction in the coming months, this impact being effectively delayed from the third quarter given strong September promotional activity.
Current report
For the nine months ended September 30, 2025, net revenues increased by 7.5%. Net revenues, excluding currency and acquisitions/divestitures, also increased by 7.5%, mainly reflecting: a favorable pricing variance due to higher combustible tobacco pricing; and favorable volume/mix driven by higher smoke-free products volume, notwithstanding unfavorable mix and lower cigarette volumes.
Current report
(1) Cost/Other variance includes charges in 2025 of $176 million related to Germany excise tax classification litigation, partly offset by charges in 2024 of $198 million related to the loss on sale of Vectura Group and $45 million related to the Egypt sales tax charge. For more details, see Note 2. Acquisitions and Divestitures, Note 8, Segment Reportingand Note 9. Contingencies.
Current report
During the quarter, net revenues increased by 9.4%. Net revenues, excluding currency and acquisitions/divestitures, increased by 5.9%, mainly reflecting: a favorable pricing variance due to higher combustible tobacco pricing; and favorable volume/mix driven by higher smoke-free products volume, notwithstanding lower volumes and unfavorable mix for cigarettes.
Current report
Operating income increased by 16.7%. Operating income, excluding currency and acquisitions/divestitures, increased by 10.8%, mainly reflecting: the same factors as for net revenues, as well as a favorable comparison to 2024 reflecting a charge of $198 million related to the loss on sale of Vectura Group in 2024 and $45 million related to the Egypt sales tax charge in 2024; partly offset by higher marketing, administration and research costs and the 2025 Germany excise tax classification litigation charge of $176 million.
Current report
Interest expense, net, of $230 million increased by $41 million or 21.7%, primarily due to the impact of derivative financial instruments.
Current report
Operating income increased by 21.5%. Operating income, excluding currency and acquisitions/divestitures, increased by 11.4%, mainly due to the same factors as for net revenues and a favorable comparison to 2024 reflecting a charge of $198 million related to the loss on sale of Vectura Group in 2024, partly offset by the 2025 Germany excise tax classification litigation charge of $176 million.
Current report
For the nine months ended September 30, 2025, net revenues increased by 8.4%. Net revenues, excluding currency and acquisitions/divestitures, increased by 7.4%, reflecting a favorable price variance, predominantly due to higher combustible tobacco pricing; and favorable volume/mix, driven by higher smoke-free products volume, notwithstanding lower volumes and unfavorable mix for cigarettes.
Current report
Operating income increased by 9.5%. Operating income, excluding currency and acquisitions/divestitures, increased by 4.5%, primarily reflecting: the same factors as for net revenues and a favorable comparison to 2024 reflecting a charge of $198 million related to the loss on sale of Vectura Group in 2024; partly offset by higher marketing, administration and research costs, as well as the 2025 Germany excise tax classification litigation charge of $176 million and the 2025 restructuring charges of $243 million.
Current report
In the third quarter, the estimated market for cigarettes and HTUs decreased by 4.8% to 141.9 billion units, with a 6.3% decrease for cigarettes and continued HTU growth. Markets with notable decreases include Ukraine (down by 15.0%), Poland (down by 9.7%), and United Kingdom (down by 17.0%).
Current report
In the third quarter, our shipment volume (in equivalent units) decreased by 2.2% with cigarettes down by 6.8% and SFP up by 10.5%.
Current report
For the nine months year-to-date, our shipment volume (in equivalent units) decreased by 1.2% with cigarettes down by 6.0% and SFP up by 12.2%.
Current report
In the third quarter, oral SFP shipments decreased by 10.0% to 65.2 million cans.
Current report
Operating income increased by 28.6%. Operating income, excluding currency and acquisitions/divestitures, increased by 23.5%, mainly reflecting a favorable price variance (predominantly driven by higher combustible tobacco pricing) and a favorable comparison to 2024 reflecting a charge of $45 million related to the Egypt sales tax charge in 2024, partly offset by higher marketing, administration and research costs.
Current report
For the nine months year-to-date, the estimated market for cigarettes and HTUs was broadly stable at 1,156.8 billion units.
Current report
In the third quarter, our shipment volume (in equivalent units) increased by 0.7% with SFP up by 23.3%, and cigarettes down by 1.1%.
Current report
For the nine months year-to-date, our shipment volume (in equivalent units) increased by 2.1% with SFP up by 15.8% and cigarettes up by 1.0%.
Current report
For the nine months year-to-date, our HTU adjusted in-market sales volume increased by an estimated 14.6%.
Showing the first 40 of 58 passages. Open the source sections for the rest.
Removed paragraphs (30)
Previous report
Consolidated Operating Results for the Six Months Ended June 30, 2025
Previous report
For the six months ended June 30, 2025, net revenues increased by 6.5%. Net revenues, excluding currency and acquisitions/divestitures, increased by 8.4%, mainly reflecting: a favorable pricing variance, predominantly due to higher combustible tobacco pricing; and favorable volume/mix, driven by higher smoke-free volume, notwithstanding unfavorable mix and lower volumes for cigarettes.
Previous report
During the quarter, net revenues increased by 7.1%. Net revenues, excluding currency and acquisitions/divestitures, increased by 6.8%, mainly reflecting: a favorable pricing variance due to higher combustible tobacco pricing; and favorable volume/mix driven by higher smoke-free products volume, notwithstanding lower volumes and unfavorable mix for cigarettes.
Previous report
Consolidated Operating Results for the Six Months Ended June 30, 2025
Previous report
We continue to expect 10 to 12% HTU adjusted IMS growth for the year, with growth skewed to the fourth quarter given a strong comparison in the third quarter. For the third quarter specifically, we forecast HTU shipments of 38.5 to 39.5 billion units.
Previous report
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 report
For the six months ended June 30, 2025, net revenues increased by 6.5%. Net revenues, excluding currency and acquisitions/divestitures, increased by 8.4%, mainly reflecting: a favorable pricing variance, predominantly due to higher combustible tobacco pricing; and favorable volume/mix, driven by higher smoke-free volume, notwithstanding unfavorable mix and lower volumes for cigarettes.
Previous report
During the quarter, net revenues increased by 7.1%. Net revenues, excluding currency and acquisitions/divestitures, increased by 6.8%, mainly reflecting: a favorable pricing variance due to higher combustible tobacco pricing; and favorable volume/mix driven by higher smoke-free products volume, notwithstanding lower volumes and unfavorable mix for cigarettes.
Previous report
Operating income increased by 7.8%. Operating income, excluding currency and acquisitions/divestitures, increased by 6.2%, mainly reflecting: the same factors as for net revenues; partly offset by higher marketing, administration and research costs, restructuring charge in 2025 of $243 million, impairment of goodwill in 2025 of $41 million and higher amortization of intangibles in 2025.
Previous report
Interest expense, net, of $277 million decreased by $52 million or 15.8%, primarily due to a lower weighted average cost of debt, including the favorable impact of derivative financial instruments.
Previous report
Income from equity investments and securities, net, increased by $215 million or over 100%, primarily driven by a favorable fair value adjustment for our equity security investments in India and Sri Lanka. For further details, Note 13. Related Parties - Equity Investments and Other.
Previous report
Operating income increased by 3.2%. Operating income, excluding currency and acquisitions/divestitures, decreased by 3.5%, primarily reflecting a restructuring charge in 2025 of $243 million and an impairment of goodwill charge in 2025 of $41 million, partly offset by a favorable pricing variance and favorable volume/mix.
Previous report
For the six months ended June 30, 2025, net revenues increased by 6.0%. Net revenues, excluding currency and acquisitions/divestitures, increased by 7.9%, reflecting a favorable pricing variance predominantly due to higher combustible tobacco pricing; and favorable volume/mix driven by higher smoke-free volume, notwithstanding unfavorable mix and lower volumes for cigarettes.
Previous report
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 report
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 report
In the second quarter, oral SFP shipment volume was stable at 70.8 million cans.
Previous report
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 report
For the six months year-to-date, the estimated market for cigarettes and HTUs increased by 0.6% to 761.0 billion units.
Previous report
For the six months year-to-date, our HTU adjusted in-market sales volume increased by an estimated 15.5%.
Previous report
For the six months ended June 30, 2025, net revenues increased by 2.4%. Net revenues, excluding currency and acquisitions/divestitures, increased by 4.0%, primarily due to favorable volume/mix, driven by higher SFP volume.
Previous report
Operating income increased by 16.5%. Operating income, excluding currency and acquisitions/divestitures, increased by 16.2%, driven by the same factors as for net revenues.
Previous report
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 report
In the second quarter, our HTU adjusted in-market sales volume increased by an estimated 9.6%.
Previous report
For the six months year-to-date, our HTU adjusted in-market sales volume in the Region increased by 10.2%.
Previous report
During the quarter, net revenues increased by 12.7%. Net revenues, excluding currency and acquisitions/divestitures, increased by 17.0%, primarily reflecting: favorable volume/mix, predominantly driven by nicotine pouches in the U.S.
Previous report
Operating income increased by 4.4%. Operating income, excluding currency and acquisitions/divestitures, increased by 24.0%, primarily reflecting: the same factors as for net revenues; partly offset by higher marketing, administration and research costs, including incremental U.S. investments, as well as higher amortization of intangibles.
Previous report
For the six months year-to-date, the estimated market for cigarettes and HTUs, excluding the U.S., was broadly stable.
Previous report
In the second quarter, our cigarette and HTU shipment volume increased by 1.6% to 15.3 billion units, with increases in Argentina (up by 12.3%) and Mexico (up by 2.3%), partly offset by decreases in Brazil (down by 2.7%) and Colombia (down by 7.9%).
Previous report
For the six months year-to-date, our cigarette and HTU shipment volume increased by 0.7% to 29.8 billion units, mainly due to Argentina (up by 6.5%), partly offset by Mexico (down by 3.6%).
Previous report
Risks Related to Cybersecurity and Data Governance
Reworded paragraphs (131)
Previous wording
Our cigarettes are sold in approximately 170 markets, and in many of these markets they hold the number one or number two market share position. We have a wide range of premium, mid-price and low-price brands. Our portfolio comprises both international and local brands.
Current wording
Our cigarettes are sold in approximately 170 markets, and in many of these markets they hold the number one or number two market share position. We have a wide range of premium, mid-price and low-price brands. Our portfolio is comprised of both international and local brands.
Previous 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.
Current wording
IQOS, ZYN and VEEV are the leading brands in our SFPs portfolio. As of October 2025, our smoke-free products were available for sale in 100 markets.
Previous wording
Our Wellness and Healthcare business strategy focuses on developing and commercializing oral and inhaled consumer health and wellness offerings and inhaled prescription products for therapy areas that include pain management and cardiovascular emergencies. This includes medical and pharmaceutical cannabinoids, and non-recreational cannabinoid products (including CBD), in line with applicable regulatory requirements, though any revenue related to cannabinoids is expected to be negligible in the near to medium term.
Current wording
Our Wellness and Healthcare business strategy focuses on developing and commercializing oral and inhaled consumer health and wellness offerings and inhaled prescription products for therapy areas that include pain management and cardiovascular emergencies. This includes medical and pharmaceutical cannabinoids, and non-recreational cannabinoid products (including
Previous wording
We use the term net revenues to refer to our operating revenues from the sale of our products, including shipping and handling charges billed to customers, net of sales and promotion incentives, and excise taxes. Our net revenues and operating income are affected by various factors, including the volume of products we sell, the price of our products, changes in currency exchange rates and the mix of products we sell. Mix is a term used to refer to the proportionate value of premium-price brands to mid-price or low-price brands in any given market (product mix). Mix can also refer to the proportion of shipment volume in more profitable markets versus shipment volume in less profitable markets (geographic mix).
Current wording
We use the term net revenues to refer to our operating revenues from the sale of our products, including shipping and handling charges billed to customers, net of sales and promotion incentives, and excise taxes. Our net revenues and operating income are affected by various factors, including the volume and mix of products we sell, the price of our products and changes in currency exchange rates. "Mix" is a term used to refer to the proportionate value of premium-price brands to mid-price or low-price brands in any given market (product mix). Mix can also refer to the proportion of shipment volume in more profitable markets versus shipment volume in less profitable markets (geographic mix).
Previous wording
Our cost of sales consists principally of: tobacco leaf, non-tobacco raw materials, labor and manufacturing costs; shipping and handling costs; and the cost of devices produced by third-party electronics manufacturing service providers. Estimated costs associated with device warranty programs are generally provided for in cost of sales in the period the related revenues are recognized.
Current wording
Our cost of sales consists primarily of: tobacco leaf, non-tobacco raw materials, labor and manufacturing costs; shipping and handling costs; and the cost of devices produced by third-party electronics manufacturing service providers. Estimated costs associated with device warranty programs are generally provided for in cost of sales in the period the related revenues are recognized.
Previous wording
•Net Revenues - Net revenues of $19.4 billion for the six months ended June 30, 2025, increased by $1.2 billion, or 6.5%, 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 year-to-date results):
Current wording
•Net Revenues - Net revenues of $30.3 billion for the nine months ended September 30, 2025, increased by $2.1 billion, or 7.5%, 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 year-to-date results):
Previous wording
Net revenues by product category for the six months ended June 30, 2025 and 2024 are shown below:
Current wording
Net revenues by product category for the nine months ended September 30, 2025 and 2024 are shown below:
Previous 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:
Current wording
•Diluted Earnings Per Share - The changes in our reported diluted earnings per share (“diluted EPS”) for the nine months ended September 30, 2025, from the comparable 2024 amounts, were as follows:
Previous wording
Restructuring charges – During the six months ended June 30, 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. During the six months ended June 30, 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.
Current wording
Restructuring charges – During the nine months ended September 30, 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. During the nine months ended September 30, 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
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.
Current wording
Amortization of intangibles –During the nine months ended September 30, 2024 and 2025, we recorded amortization of intangible expense of $588 million (representing $459 million net of income tax or $0.29 per share decrease in diluted EPS) and$746 million (representing$580 million net of income tax or $0.37 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
Fair value adjustment for equity security investments –During the six months ended June 30, 2024 and 2025, we recorded fair value adjustments for our equity security investments in India and Sri Lanka of $242 million after tax gain (or $0.15 per share increase in diluted EPS) and$410 million after tax gain (or $0.26 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 nine months ended September 30, 2024 and 2025, we recorded fair value adjustments for our equity security investments in India and Sri Lanka of $614 million after tax gain (or $0.39 per share increase in diluted EPS) and $513 million after tax gain (or $0.33 per share increase in diluted EPS), respectively. For further details, see Note 13. Related Parties - Equity Investments and Other.
Previous 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.
Current wording
Income taxes – The Income tax impact associated with the Swedish Match acquisition financing that increased our 2024 diluted EPS by $0.01 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. 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.
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.
Previous wording
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.
Current wording
The 2025 tax items that increased our 2025 diluted EPS by $0.11 per share in the table above were due to benefits related to an interest expense election primarily driven by a reduction in prior year tax costs associated with global intangible low-taxed income and refunds expected on amended tax returns filed in Germany; partially offset by valuation allowances recorded on deferred tax assets related to U.S. foreign tax credits and the recognition of current tax expense related to the potential disallowance of deductions for certain intercompany transactions in Indonesia. For further details, see Note 10. Income Taxes.
Previous 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.
Current wording
Currency– The favorable impact of $0.02 per share from currency over the comparable 2024 period primarily results from the fluctuations of the U.S. dollar, especially against the Euro and Egyptian pound, partly offset by the Swiss franc. This favorable currency movement has impacted our profitability across our primary revenue markets and local currency cost bases.
Previous 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.
Current wording
Interest – The favorable impact of $0.03 per share from interest in the table above was primarily due to a lower weighted average cost of debt.
Previous wording
Operations – The increase in diluted EPS of $0.56 from our operations in the table above was due primarily to the following segments:
Current wording
Operations – The increase in diluted EPS of $0.77 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;
Current wording
•SSEA, CIS & MEA: Favorable pricing and higher cigarette and SFP volume, partly offset by higher marketing, administration and research costs, and higher manufacturing costs;
Previous wording
•EA, AU & PMI GTR: Favorable volume/mix.
Current wording
•EA, AU & PMI GTR: Favorable volume/mix and a favorable pricing variance; and
Previous wording
•Americas: Favorable volume/mix and a favorable pricing variance, partly offset by higher marketing, administration and research costs and higher manufacturing costs; and
Current wording
•Americas: Favorable volume/mix, partly offset by an unfavorable pricing variance, higher marketing, administration and research costs, and higher manufacturing costs.
Previous 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):
Current wording
•Net Revenues - Net revenues of $10.8 billion for the three months ended September 30, 2025, increased by $0.9 billion, or 9.4%, 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
Amortization of intangibles –During the second quarter of 2024 and 2025, we recorded amortization of intangible expense of $212 million (representing $165 million net of income tax or $0.11 per share decrease in diluted EPS) and $250 million (representing $194 million net of income tax or $0.12 per share decrease in diluted EPS), respectively.
Current wording
Amortization of intangibles –During the third quarter of 2024 and 2025, we recorded amortization of intangible expense of $256 million (representing $199 million net of income tax or $0.12 per share decrease in diluted EPS) and $250 million (representing $195 million net of income tax or $0.13 per share decrease in diluted EPS), respectively.
Previous 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.
Current wording
Fair value adjustment for equity security investments –During the third quarter of 2024 and 2025, we recorded fair value adjustments for our equity security investments in India and Sri Lanka of $372 million after tax gain (or $0.24 per share increase in diluted EPS) and $103 million after tax gain (or $0.07 per share increase in diluted EPS), respectively. For further details, see Note 13. Related Parties - Equity Investments and Other.
Previous wording
Income taxes – The Income tax impact associated with Swedish Match AB financing that decreased our 2024 diluted EPS by $0.02 per share and increased our 2025 diluted EPS by $0.18 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 the Swedish Match acquisition financing that increased our 2024 diluted EPS by $0.10 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 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 foreign statutory tax rates and repatriation cost differences, partially offset by a decrease in U.S. state income tax expense.
Current wording
The change in the tax rate that increased our diluted EPS by $0.06 per share in the table above was primarily due to benefits related to an interest expense election primarily driven by a reduction in current year tax costs associated with global intangible low-taxed income and decreases in U.S. state income tax expense; partially offset by increases in foreign statutory tax rates and repatriation cost differences.
Previous wording
Currency– The favorable impact of $0.02 per share during the reporting period primarily results from the fluctuations of the U.S. dollar, especially against the Euro, Russian ruble and Japanese yen, partly offset by the Swiss franc. This favorable currency movement has impacted our profitability across our primary revenue markets and local currency cost bases.
Current wording
Currency– The favorable impact of $0.08 per share from currency over the comparable 2024 period primarily results from the fluctuations of the U.S. dollar, especially against the Euro and Russian ruble, partly offset by the Japanese yen and the Swiss franc. This favorable currency movement has impacted our profitability across our primary revenue markets and local currency cost bases.
Previous wording
Interest – The favorable impact of $0.02 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.
Current wording
Interest – The unfavorable impact of $0.02 per share from interest in the table above was primarily due to the impact of derivative financial instruments.
Previous wording
Operations – The increase in diluted EPS of $0.31 from our operations in the table above was due primarily to the following segments:
Current wording
Operations – The increase in diluted EPS of $0.21 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;
Current wording
•SSEA, CIS & MEA: Favorable pricing, partly offset by higher marketing, administration and research costs; and
Previous 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:
Current wording
See pages 102 -115 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 six months and three months ended June 30, 2025 and 2024.
Current wording
•Restructuring charges – See Note 16. Restructuring Activities for a breakdown of these costs by segment for the nine months ended September 30, 2025 and 2024.
Previous wording
•Impairment of goodwill –See Note 5. Goodwill and Other Intangible Assets, net for details of the $41 million of goodwill impairment charge recorded in the Europe segment for the six months and three months ended June 30, 2025.
Current wording
•Impairment of goodwill –See Note 5. Goodwill and Other Intangible Assets, net for details of the $41 million of goodwill impairment charge recorded in the Europe segment for the nine months ended September 30, 2025.
Previous wording
The following discussion compares our consolidated operating results for the six months ended June 30, 2025, with the six months ended June 30, 2024.
Current wording
The following discussion compares our consolidated operating results for the nine months ended September 30, 2025, with the nine months ended September 30, 2024.
Previous wording
Estimated industry volume (excluding China and the U.S.) for cigarettes and HTUs was broadly stable.
Current wording
Estimated industry volume (excluding China and the U.S.) for cigarettes and HTUs decreased by 0.7%.
Previous 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%.
Current wording
Our shipment volume, including cigarettes and smoke-free products (in equivalent units), increased by 1.8% with smoke-free volumes up by 14.3%, with all SFP categories growing strongly, and cigarette volumes down by 1.3%.
Previous 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.
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 expect smoke-free product volume growth of 12% to 14% with growth of smoke-free shipments more likely to be in the lower half of this range, partly offset by cigarette volume declines of around 2%. Smoke-free products volume growth continues to assume 10% to 12% growth in HTU adjusted IMS volumes, and U.S. nicotine pouch second-half shipment growth broadly in-line with offtake growth before trade inventory movements.
Previous 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.
Current wording
(1) Cost/Other variance includes charges in 2025 of $243 million related to restructuring charges, $176 million related to Germany excise tax classification litigation and higher amortization of intangibles in 2025, partly offset by charges in 2024 of $168 million related to restructuring charges, $27 million related to impairment of other intangibles, $198 million related to the loss on sale of Vectura Group and $45 million related to the Egypt sales tax charge. For more details, see Note 2. Acquisitions and Divestitures, Note 5. Goodwill and Other Intangible Assets, net, Note 8, Segment Reporting, Note 9. Contingencies and Note 16. Restructuring Activities.
Previous wording
The favorable currency impact in net revenues was due primarily to the Euro, Japanese yen and Russian ruble, partly offset by Indonesian rupiah and Mexican peso.
Current wording
The favorable currency impact in net revenues was due primarily to the Euro and Russian ruble, partly offset by the Mexican pesos and Indonesian rupiah.
Previous wording
Net revenues include $8.1 billion in 2025 and $7.0 billion in 2024 related to smoke-free.
Current wording
Net revenues include $12.5 billion in 2025 and $10.8 billion in 2024 related to smoke-free.
Previous wording
Operating income increased by 11.8%. Operating income, excluding currency and acquisitions/divestitures, increased by 12.1%, mainly reflecting: the same factors as for net revenues, partly offset by higher marketing, administration and research costs, higher manufacturing costs, higher restructuring charges in 2025, the impairment of goodwill charge in 2025 and higher amortization of intangibles in 2025.
Current wording
Operating income increased by 13.6%. Operating income, excluding currency and acquisitions/divestitures, increased by 11.6%, mainly reflecting: the same factors as for net revenues, as well as a favorable comparison to 2024 reflecting a charge of $198 million related to the loss on sale of Vectura Group in 2024 and $45 million related to the Egypt sales tax charge in 2024, partly offset by higher marketing, administration and research costs, higher manufacturing costs, higher restructuring charges in 2025, the impairment of goodwill charge in 2025 and higher amortization of intangibles in 2025, as well as the 2025 Germany excise tax classification litigation charge of $176 million.
Showing the first 40 of 131 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
CBD), in line with applicable regulatory requirements, though any revenue related to cannabinoids is expected to be negligible in the near to medium term.
Current report — wording carried from elsewhere
The U.S., the EU, Switzerland and Japan introduced additional trade restrictions banning, among many other goods, the export of certain non-tobacco materials used to produce cigarettes and heated tobacco consumables in Russia. The EU, Switzerland and the U.K. also prohibited technical assistance and other services related to restricted goods. The EU, Switzerland and the U.K. prohibited import into their territories of certain goods, including cigarettes, among others, which might generate significant revenues for Russia if they originate in Russia or are exported from Russia. The EU and Switzerland prohibited transfer and licensing of intellectual property rights in relation to restricted goods. Additionally, the EU, the U.S., the U.K., Switzerland, Canada, Australia, New Zealand and Ukraine imposed sanctions on Mr. Igor Kesaev, a non-majority shareholder of Megapolis Distribution B.V.
Rearranged previous paragraphs (7)
Previous report — wording carried elsewhere
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 report — wording carried elsewhere
Impairment of goodwill– 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, see Note 5. Goodwill and Other Intangible Assets, net.
Previous report — wording carried elsewhere
The change in the tax rate that decreased our diluted EPS by $0.03 per share in the table above was primarily due to increases in foreign statutory tax rates and repatriation cost differences, partially offset by a decrease in U.S. state income tax expense.
Previous report — wording carried elsewhere
•Americas: Favorable volume/mix, partly offset by higher marketing, administration and research costs; and
Previous report — wording carried elsewhere
(1) Cost/Other variance includes charges in 2025 of $243 million related to restructuring charges and higher amortization of intangibles in 2025. For more details, see Note 5. Goodwill and Other Intangible Assets, net and Note 16. Restructuring Activities.
Previous report — wording carried elsewhere
The tracking and tracing regulations for cigarettes and roll-your-own products manufactured or destined for the EU were extended to include tobacco products other than cigarettes, including some of our SFPs, as of May 20, 2024.
Previous report — wording carried elsewhere
Directive, the EU Taxonomy Regulation, the EU Deforestation Regulation, the EU Corporate Sustainability Due Diligence Directive, CDP, the GHG Protocol, and carbon tax programs in Europe and Canada.