Philip Morris International Inc.
For the period ended Mar 31, 2026. Filed Apr 24, 2026.
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.
Mar 31, 2026 · Filed Apr 24, 2026
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 2025-09-30; filed 2025-10-24.
0001628280-25-046179
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-04-24.
0001628280-26-027019
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 544 previous paragraphs and 425 current paragraphs.
210 unchanged; 153 reworded; 57 added; 163 removed; 18 previous and 5 current paragraphs rearranged.
Tables are not compared: 36 previous and 11 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 (57)
Current report
•International Smoke-Free;
Current report
•International Combustibles; and
Current report
•U.S. (including our wellness business unit, Aspeya).
Current report
Corporate expenses and other include certain other expenses related to foreign currency gains/losses and compensation expense related to restricted share units and performance share units awards, which were reclassified from cost of sales and marketing, administration and research costs.
Current report
During the quarter, net revenues increased by 9.1%. Net revenues, excluding currency, increased by 2.7%, mainly reflecting: a favorable pricing variance mainly driven by International Combustibles; partly offset by an unfavorable volume/mix/other, mainly driven by lower International Combustibles and U.S. volumes, notwithstanding higher International Smoke-Free volumes.
Current report
Restructuring charges –During the first quarter of 2026, we recorded pre-tax restructuring charges of $24 million(representing $19 millionnet of income tax and a diluted EPS charge of$0.01 per share), related to a series of footprint optimization initiatives in the U.S. For further details, see Note 15. Restructuring Activities.
Current report
•International Smoke-Free segment: Favorable volume/mix/other and favorable pricing;
Current report
•International Combustibles segment: Favorable pricing, partly offset by unfavorable volume/mix/other, including the favorable impact related to the restructuring of distribution terms in certain markets this quarter;
Current report
•U.S. segment: Unfavorable volume/mix/other, unfavorable pricing (mainly driven by increased consumer promotions) and higher manufacturing costs; and
Current report
Marketing, administration and research costs, including restructuring charges, as well as corporate expenses and other are not allocated to segments to determine the primary measure of segment profitability.
Current report
(1) Includes HTUs, e-vapor unit equivalents and oral SFP in pouch or pouch equivalents, excluding snuff, snuff leaf and U.S. chewing tobacco
Current report
For the full year 2026, we currently expect a broadly stable total PMI cigarette and SFP shipment volume, with high-single digit SFP shipment volume growth, and a cigarette shipment volume decline of around 3%.
Current report
During the quarter, net revenues increased by 9.1%. Net revenues, excluding currency, increased by 2.7%, mainly reflecting: a favorable pricing variance mainly driven by International Combustibles; partly offset by an unfavorable volume/mix/other, mainly driven by lower International Combustibles and U.S. volumes, notwithstanding higher International Smoke-Free volumes.
Current report
Gross profit increased by 10.1%. Gross profit, excluding currency, increased by 3.8%, mainly reflecting the same factors as for net revenues.
Current report
Equity investments and securities (income)/loss net was a loss of $403 million in 2026 compared to income of $(205) million in 2025. The variance was primarily due to the unfavorable fair value adjustments for our equity security investments in India and Sri Lanka. For further details, see Note 13. Related Parties - Equity Investments and Other.
Current report
Operating Results by Reportable Segment
Current report
International Smoke-Free Segment:
Current report
During the quarter, net revenues increased by 24.7%. Net revenues, excluding currency, increased by 15.8%, reflecting: favorable volume/mix/other driven by higher HTU and e-vapor volumes and a favorable pricing variance due to higher HTU pricing.
Current report
Gross profit increased by 28.6%. Gross profit, excluding currency, increased by 19.4%, mainly due to the same factors as for net revenues.
Current report
International Smoke-Free Segment Shipment Volume
Current report
In the first quarter, our International Smoke-Free shipment volume increased by 11.9% to 44.1 billion in equivalent units, notably due to Italy, Global Travel Retail, Taiwan and Russia.
Current report
In the heat-not-burn category, HTU adjusted in-market sales (IMS) volume, which excludes the net impact of estimated distributor and wholesaler inventory movements, grew by 10.9%, broadly in line with shipment volume growth of 11.3%. The growth in IQOS was broad-based across geographies with all key consumables product lines (TEREA, DELIA/SENTIA and LEVIA) contributing. Excluding the impact of consumer pantry-loading in Japan ahead of the excise-driven price increase on April 1, adjusted IMS grew by an estimated 9.4%.
Current report
In the Oral Smoke-Free category, modern oral volume growth of 0.5 billion pouches was more than offset by snus declines in the Nordics, resulting in a total oral SFP shipment volume decrease of 5.1%.
Current report
In the E-vapor category, VEEV quarterly shipments exceeded one billion equivalent units for the first time. VEEVnow shares the #1 closed pod position in Europe, estimated based on Nielsen offtake data, with growth in Germany, France, Romania, Italy, Greece and Bulgaria.
Current report
International Combustibles Segment:
Current report
During the quarter, net revenues increased by 6.8%. Net revenues, excluding currency, increased by 1.0%, reflecting: a favorable pricing variance, partly offset by unfavorable volume/mix/other, including the favorable impact related to the restructuring of distribution terms in certain markets this quarter.
Current report
Gross profit increased by 9.8%. Gross profit, excluding currency, increased by 3.9%, due to the same factors as for net revenues.
Current report
International Combustibles Segment Shipment Volume
Current report
In the first quarter, our cigarette shipment volume in the International Combustibles segment decreased by 5.1% to 137.3 billion units, with notable decreases in Indonesia, Russia, Germany and Mexico. Our overall cigarette category volume share was 24.8% (down by 0.6pp) due to unfavorable market mix as well as lower share in Indonesia, Russia and Turkey, partly offset by gains in Egypt. Marlboro continued to gain category share (up by 0.4pp) to 10.7%.
Current report
U.S. Segment:
Current report
During the quarter, net revenues decreased by 30.8%. Net revenues, excluding currency, decreased by 31.6%, reflecting: lower ZYN volumes due to distributor and trade inventory movements in both the current and prior year periods and an unfavorable price comparison due to low levels of ZYN promotional activity in the prior year.
Current report
Gross profit decreased by 44.5%, reflecting the same factors as for net revenues and higher manufacturing costs.
Current report
U.S. Smoke-Free Shipment Volume
Current report
In the first quarter, our U.S. smoke-free product shipment volume decreased by 21.2%. Our U.S. oral smoke-free products shipment volume decreased by 21.3% to 2.8 billion in equivalent units, including a 23.5% decline in ZYN shipments to 2.3 billion pouches or 155 million cans. Distributor and trade inventory movements in both the current and prior year periods, and a challenging promotional comparison, led to a decline in volumes. ZYN offtake volumes, as estimated by Nielsen, grew by 10%, notwithstanding an uneven competitive landscape where we do not yet have access to all of the most dynamic strength and flavor segments.
Current report
Nicotine Content: Certain jurisdictions have implemented, or are considering to implement, a cap on the nicotine content of certain nicotine-containing products. In addition, some jurisdictions have also indicated that they are exploring reducing nicotine levels further, in some cases to levels that they describe as minimally or non-addictive.
Current report
On July 5, 2023, we submitted applications to the FDA requesting renewal of the MRTP authorizations previously granted to the IQOS 2.4 device and three related consumables as well as the IQOS 3.0 device in the United States. On April 17, 2026, the FDA renewed the exposure modification orders with a stated expiration date in April 2031.
Current report
On January 16, 2026, we submitted the first Annual Report for ZYN products to the FDA. The report included a systematic review of the literature covering publications related to ZYN products between January 16, 2025, and October 31, 2025. The report included publications in various scientific fields including observational studies on trends related to the potential health impact of the products, and behavioral studies analyzing the impact on former and never smokers, impact on cessation, product acceptance and the impact of marketing approaches. Our review of publications revealed no significant new findings. Overall, the review continues to support the FDA's conclusion that marketing of these ZYN products is "appropriate for the protection of public health."
Current report
We have made a number of ZYN submissions to the FDA that are at various stages of the regulatory process and we are preparing to bring innovations to market in the coming months. We are aware that certain of our competitors have recently marketed, or stated their intention to market, products that were not previously marketed in the United States and did not have a marketing granted order. We continue to evaluate the practices of the FDA and other regulators regarding products with respect to which regulatory submissions have been made. We may decide to commercialize products for which we have not received a marketing granted order where we believe that FDA enforcement would be inconsistent with its present practices and the Family Smoking Prevention and Tobacco Control Act.
Current report
PMI holds a 23% equity interest in JSC TK Megapolis ("TKM"), PMI's distributor in Russia (SSEA, CIS & MEA segment), which as of December 31, 2025 had a carrying value of $303 million. Previously, TKM was a subsidiary of Megapolis Distribution B.V. ("MDBV"), a Dutch holding company in which PMI held a 23% equity interest. In June 2024, the Russian government included TKM in the list of economically significant organizations that may be subject to forced localization under applicable Russian law, which referred to the mandatory removal of a foreign holding company from the shareholding structure. On August 8, 2024, the Arbitrazh Court of the Moscow Region granted the forced localization of MDBV as requested by the Ministry of Industry and Trade on July 18, 2024. As a result, MDBV’s shares in TKM were transferred to TKM and subsequently transferred to the Russian subsidiaries of its indirect shareholders during the fourth quarter of 2024. MDBV was dissolved in December of 2025. Previously, Mr. Igor Kesaev was a non-majority shareholder of MDBV. The EU, the U.S., the UK, Switzerland, Canada, Australia, New Zealand and Ukraine imposed sanctions on Mr. Igor Kesaev.
Current report
The current conflict in the Middle East, as discussed below, may result in increased inflationary pressures globally.
Showing the first 40 of 57 passages. Open the source sections for the rest.
Removed paragraphs (163)
Previous report
Following the sale of Vectura Group Ltd. on December 31, 2024, we updated our segment reporting in January 2025, by including the ongoing Wellness & Healthcare results in the Europe segment. In addition, we renamed our “PMI Duty Free” business to “PMI Global Travel Retail” effective in the first quarter of 2025. As a result of this change, our segment that includes our duty free business was renamed East Asia, Australia & PMI Global Travel Retail (“EA, AU & PMI GTR”).
Previous report
Our four geographical segments are as follows:
Previous report
•Europe Region, including our Wellness & Healthcare business;
Previous report
•South and Southeast Asia, Commonwealth of Independent States, Middle East and Africa Region ("SSEA, CIS & MEA");
Previous report
•East Asia, Australia, and PMI Global Travel Retail (“EA, AU & PMI GTR”); and
Previous report
•Americas Region.
Previous report
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 report
In 2022, we acquired Swedish Match AB, a market leader in oral nicotine delivery with a significant presence in the United States market. The Swedish Match acquisition was a key milestone in PMI’s transformation to becoming a smoke-free company. The Swedish Match product portfolio is complementary to our portfolio, permitting us to bring together a leading oral nicotine product with the leading heat-not-burn product.
Previous report
Consolidated Operating Results for the Nine Months Ended September 30, 2025
Previous 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.
Previous report
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 report
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 report
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 report
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 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.
Previous 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.
Previous 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.
Previous 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.
Previous 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.
Previous report
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 report
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 report
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 report
•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 report
•EA, AU & PMI GTR: Favorable volume/mix and a favorable pricing variance; and
Previous report
•Americas: Favorable volume/mix, partly offset by an unfavorable pricing variance, higher marketing, administration and research costs, and higher manufacturing costs.
Previous 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.
Previous 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.
Previous 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.
Previous 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.
Previous 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.
Previous 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.
Previous 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.
Previous report
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 report
•Europe: Favorable pricing and favorable volume/mix;
Previous report
•SSEA, CIS & MEA: Favorable pricing, partly offset by higher marketing, administration and research costs; and
Previous report
•EA, AU & PMI GTR: Favorable volume/mix;
Previous report
partly offset by
Previous report
•Americas: Unfavorable pricing variance and higher marketing, administration and research costs, partly offset by higher SFP volumes.
Previous report
Note: Sum of product categories or Regions might not foot to total PMI due to rounding
Previous report
•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.
Showing the first 40 of 163 passages. Open the source sections for the rest.
Reworded paragraphs (153)
Previous wording
We are a leading international consumer goods 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, including heat-not-burn, nicotine pouch and e-vapor products. Since 2008, we have invested over $14 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. Following a robust science-based review, the U.S. Food and Drug Administration (the "FDA") has authorized the marketing of Swedish Match’s General snus and ZYNnicotine pouches and versions of PMI’s IQOS devices and consumables - the first-ever such authorizations in their respective categories. Versions of IQOS devices and consumables and General snus also obtained the first-ever Modified Risk Tobacco Product ("MRTP") authorizations from 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").
Current wording
We are a leading international consumer goods 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, including heat-not-burn, nicotine pouch and e-vapor products. Since 2008, we have invested over $16 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. As of April 30, 2024, we hold the full rights to commercialize IQOS in the U.S. after reaching an agreement to end our U.S. commercial relationship covering IQOS with Altria Group, Inc. in 2022. Following a robust science-based review, the U.S. Food and Drug Administration (the "FDA") has authorized the marketing of Swedish Match’s General snus and ZYNnicotine pouches and versions of PMI’s IQOS devices and consumables - the first-ever such authorizations in their respective categories. Versions of IQOS devices and consumables and General snus also obtained the first-ever Modified Risk Tobacco Product ("MRTP") authorizations from 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
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 wording
With our smoke-free business now operating at scale across our regions, including growth from our U.S. business, PMI has implemented an evolved organizational model with two primary business units: International and U.S. This change was implemented effective January 1, 2026, and as a result PMI realigned its reportable segments accordingly. The four geographic segments have been replaced with the following three new reportable segments:
Previous wording
Smoke-Free Business ("SFB”) is the term PMI uses to refer to all of its smoke-free products. SFB also includes wellness and healthcare products, as well as consumer accessories, such as lighters and matches.
Current wording
Smoke-Free Business ("SFB”) is the term PMI uses to refer to all of its smoke-free products. SFB also includes wellness products, as well as consumer accessories, such as lighters and matches.
Previous 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.
Current wording
IQOS, ZYN and VEEV are the leading brands in our SFPs portfolio. As of March 31, 2026, our smoke-free products were available for sale in 108 markets.
Previous wording
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
With a strong foundation and significant expertise in life sciences, PMI has a long-term ambition to expand into wellness areas. The business strategy of our wellness unit, Aspeya, currently focuses on developing and commercializing primarily oral consumer wellness offerings. This includes medical 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.
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 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).
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). "Other” also includes the currency-neutral net revenue variance attributable to the restructuring of distribution terms in certain markets.
Previous wording
Our marketing, administration and research costs include the costs of marketing and selling our products, other costs generally not related to the manufacture of our products (including general corporate expenses), and costs incurred to develop new products. The most significant components of our marketing, administration and research costs are marketing and sales expenses and general and administrative expenses.
Current wording
Our marketing, administration and research costs include the costs of marketing and selling our products, other costs generally not related to the manufacture of our products (excluding corporate expenses and other), and costs incurred to develop new products. The most significant components of our marketing, administration and research costs are marketing and sales expenses and general and administrative expenses.
Previous 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):
Current wording
•Net Revenues - Net revenues of $10.1 billion for the three months ended March 31, 2026, increased by $0.8 billion, or 9.1%, from the comparable 2025 amount. The change in our net revenues from the comparable 2025 amount was driven by the following (variances not to scale with quarterly results):
Previous 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:
Current wording
•Diluted Earnings Per Share - The changes in our diluted earnings per share (“diluted EPS”) for the three months ended March 31, 2026, from the comparable 2025 amounts, were as follows:
Previous 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.
Current wording
Amortization of intangibles –During the first quarter of 2025 and 2026, we recorded amortization of intangible expense of $246 million (representing $191 million net of income tax or $0.12 per share decrease in diluted EPS) and $251 million (representing $196 million net of income tax or $0.12 per share decrease in diluted EPS), respectively.
Previous 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.
Current wording
Fair value adjustment for equity security investments –During the first quarter of 2025 and 2026, we recorded fair value adjustments for our equity security investments in India and Sri Lanka of $143 million gain after tax (or $0.09 per share increase in diluted EPS) and $338 million loss after tax (or $0.22 per share decrease 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 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.
Current wording
Income taxes – The income tax impact associated with the Swedish Match acquisition financing that increased our 2025 diluted EPS by $0.06 and decreased our 2026 diluted EPS by $0.05 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 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.
Current wording
The change in the tax rate that increased our diluted EPS by $0.06 per share in the table above was primarily driven by a reduction in tax costs associated with global intangible low-taxed income and discrete tax benefits recognized during the period.
Previous 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.
Current wording
Currency– The favorable impact of $0.18 per share from currency over the comparable 2025 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 Swiss franc. This favorable currency movement has impacted our profitability across our primary revenue markets and local currency cost bases.
Previous wording
Operations – The increase in diluted EPS of $0.77 from our operations in the table above was due primarily to the following segments:
Current wording
Operations – The increase in diluted EPS of $0.03 from our operations in the table above was due primarily to the following:
Previous wording
•Europe: Favorable pricing and favorable volume/mix, partly offset by higher marketing, administration and research costs;
Current wording
•Higher marketing, administration and research costs.
Previous 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:
Current wording
See pages 70 -82 for a discussion of our "Cautionary Factors That May Affect Future Results." Net revenues, cost of sales and gross profit by segment, as well as total significant expenses and operating income were as follows:
Previous 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.
Current wording
•Restructuring charges – See Note 15. Restructuring Activities for details of the $24 million pre-tax charges included in marketing, administration and research costs for the three months ended March 31, 2026.
Previous wording
Net revenues related to smoke-free, excluding wellness and healthcare, refer to the operating revenues generated from the sale of these products, including shipping and handling charges billed to customers, net of sales and promotion incentives, and excise taxes, if applicable. These net revenue amounts consist of the sale of our products that are not combustible tobacco products, such as heat-not-burn, e-vapor, and oral products, as well as consumer accessories. Net revenues related to wellness and healthcare refer to the operating revenues generated from the sale of products, primarily associated with inhaled therapeutics, and oral and intra-oral delivery systems.
Current wording
Net revenues related to smoke-free, excluding wellness, refer to the operating revenues generated from the sale of these products, including shipping and handling charges billed to customers, net of sales and promotion incentives, and excise taxes, if applicable. These net revenue amounts consist of the sale of our products that are not combustible tobacco products, such as heat-not-burn, e-vapor, and oral products, as well as consumer accessories. Net revenues related to wellness refer to the operating revenues generated from the sale of product, primarily associated with oral and intra-oral delivery systems.
Previous wording
References to "Cost/Other" in the Consolidated Financial Summary table of total PMI and the four segments throughout this"Discussion and Analysis" reflects the currency and acquisition/divestiture-neutral variances of: cost of sales (excluding the volume/mix cost component); marketing, administration and research costs (including restructuring charges); and amortization and impairment of intangibles. “Cost/Other” also includes the currency and acquisition/divestiture-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.
Current wording
References to "Cost" in the Consolidated Financial Summary table of total PMI and the three reportable segments throughout this"Discussion and Analysis" reflects the currency-neutral variances of: cost of sales (excluding the volume/mix cost component); and where applicable, marketing, administration and research costs (including restructuring charges); corporate expenses and other, and amortization and impairment of intangibles.
Previous wording
Heated tobacco units ("HTUs") is the term we use to refer to heated tobacco consumables, which include our BLENDS, DELIA, HEETS, HEETS Creations(defined collectively as HEETS), SENTIA, TEREA, TEREA CRAFTEDand TEREA Dimensions, as well as the KT&G-licensed brands, Fiit and Miix (outside of South Korea). HTUs also include zero tobacco heat-not-burn consumables (LEVIA).
Current wording
Heated tobacco units ("HTUs") is the term we use to refer to heated tobacco consumables, which include our BLENDS, DELIA, HEETSand HEETS Creations(defined collectively as HEETS), SENTIA, TEREA, TEREA CRAFTEDand TEREA Dimensions, as well as the KT&G-licensed brands, Fiit and Miix (outside of South Korea). HTUs also include zero tobacco heat-not-burn consumables (LEVIA).
Previous wording
Unless otherwise stated, market share for HTUs is defined as the in-market sales volume for HTUs as a percentage of the total estimated industry sales volume for cigarettes and HTUs.
Current wording
Unless otherwise stated, market share for HTUs is defined as the IMS volume for HTUs as a percentage of the total estimated industry sales volume for cigarettes and HTUs.
Previous wording
References to total industry (or total market), our shipment volume and our market share performance reflect cigarettes and heated tobacco units, unless otherwise stated.
Current wording
References to total industry and our market share performance reflect cigarettes and heated tobacco units, unless otherwise stated.
Previous wording
Total industry volume, PMI in-market sales volume and PMI market share for the following geographies include the cigarillo category in Japan: the total international market, EA, AU & PMI GTR Region, and Japanese domestic market.
Current wording
Total industry volume, PMI in-market sales volume and PMI market share for the the total international market, and Japanese domestic market include the cigarillo category in Japan.
Previous wording
References to total international market, defined as worldwide cigarette and heated tobacco unit volume excluding the United States, total industry (or total market) and market shares throughout this"Discussion and Analysis" are our estimates for tax-paid products based on data from a number of internal and external sources and may, in defined instances, exclude China. Past reported periods may be updated to ensure comparability and to incorporate the most current information for industry and market share reporting.
Current wording
References to total international market, defined as worldwide cigarette and heated tobacco unit volume excluding the United States, total industry (or total market) and market shares throughout this"Discussion and Analysis" are our estimates for tax-paid and Global Travel Retail products based on data from a number of internal and external sources and may, in defined instances, exclude China. Past reported periods may be updated to ensure comparability and to incorporate the most current information for industry and market share reporting.
Previous wording
During the quarter, estimated industry volume (excluding China and the U.S.) for cigarettes and HTUs decreased by 0.8%.
Current wording
During the quarter, estimated industry volume (excluding China and the U.S.) for cigarettes and HTUs declined by 1.0%.
Previous wording
For the full year 2025, we currently expect an estimated total international industry volume decline of around 1% for cigarettes and HTUs, excluding China and the U.S.
Current wording
For the full year 2026, we currently expect an estimated industry volume decline of around 2% for cigarettes and HTUs, excluding China and the U.S.
Previous wording
Our shipment volume for cigarettes, HTUs and Oral SFP is shown in the table below:
Current wording
Our shipment volume for cigarettes and smoke-free products is shown in the table below:
Previous 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%.
Current wording
Our shipment volume, including cigarettes and smoke-free products (in equivalent units), decreased by 1.9% with cigarette volumes down by 5.1%, partly offset by smoke-free volumes, up by 9.1%, driven by HTU and E-vapor categories.
Previous 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.
Current wording
(1) Cost variance includes charges in 2026 of $24 million related to restructuring charges. For more details, see Note 15. Restructuring Activities.
Previous wording
The favorable currency impact in net revenues was due primarily to the Euro, Russian ruble, Polish zloty and Swiss franc.
Current wording
The favorable currency impact in net revenues was due primarily to the Euro and Russian ruble.
Previous wording
Operating income decreased by 76.6%. Operating income, excluding currency and acquisitions/divestitures, decreased by 92.0%, primarily reflecting: the same factors as for net revenues; and higher marketing, administration and research costs.
Current wording
Operating income increased by 9.8%. Operating income, excluding currency, increased by 0.2%, mainly reflecting: the same factors as for net revenues, and higher marketing, administration and research costs.
Previous wording
Our effective tax rate decreased by 3.9 percentage points to 19.2%. We estimate that our 2025 effective tax rate will be approximately 22%, excluding discrete tax events. For further details, see Note 10. Income Taxes.
Current wording
Our effective tax rate decreased by 1.5 percentage points to 18.5%. We estimate that our 2026 effective tax rate will be around 21.5%, excluding discrete tax events. For further details, see Note 10. Income Taxes.
Previous wording
Net earnings attributable to PMI of $3.5 billion increased by $0.4 billion or 12.8%. This increase was due primarily to higher operating income, partly offset by lower income from equity investments and securities, net. Basic and diluted EPS of $2.23 increased by 12.6% and 13.2%, respectively. Excluding a favorable currency impact of $0.08, diluted EPS increased by 9.1%.
Current wording
Net earnings attributable to PMI of $2.4 billion decreased by $0.3 billion or 9.4%. This decrease was due primarily to unfavorable fair value adjustments for our equity security investments mentioned above, partly offset by a higher operating income. Basic and diluted EPS of $1.56 both decreased by 9.3%. Excluding a favorable currency impact of $0.18, diluted EPS decreased by 19.8%.
Previous wording
Segment Operating Results – Three Months and Nine Months Ended September 30, 2025
Current wording
Segment Operating Results – Three Months Ended March 31, 2026
Previous wording
The following discussion compares operating results within each of our segments for the three months and nine months ended September 30, 2025, with the three months and nine months ended September 30, 2024.
Current wording
The following discussion compares operating results within each of our segments for the three months ended March 31, 2026, with the three months ended March 31, 2025.
Previous wording
The pricing variance for 2024 and 2025 was negatively impacted by the supplemental tax surcharge on heated tobacco products ("HTPs") in Germany, which went into effect in 2022. On March 14, 2024, the Court of Justice of the European Union (the "CJEU") ruled that the German fiscal regulation imposing an additional excise tax on HTPs does not contravene EU law. On May 15, 2024, following the decision issued by CJEU, the Fiscal Court in Dusseldorf (the "FCD") also ruled that the German fiscal regulation imposing an additional excise tax on HTPs does not contravene EU law. The FCD admitted an appeal to the Federal Tax Court. On June 19, 2024, PMI submitted an appeal. The negative impact will continue, at least until the appeal ruling on the legality of the surcharge is concluded. PMI currently accounts for the surcharge as a reduction in net revenues, with amounts withdrawn before May 15, 2024, currently under a payment suspension. Despite this payment suspension and, in order to avoid the future addition of interest, PMI elected, on January 14, 2025, to pay the amount outstanding of EUR 721 million (approximately $751 million), excluding accrued interest. An unfavorable outcome to the appeal would negatively impact PMI’s future cash provided by operating activities for the amounts of unpaid interest. A favorable outcome to the appeal would positively impact future PMI’s operating results and future cash provided by operating activities for the amounts paid in January 2025.
Current wording
The net revenues for 2024, 2025 and 2026 were negatively impacted by the supplemental tax surcharge on heated tobacco products ("HTPs") in Germany, which went into effect in 2022. On March 14, 2024, the Court of Justice of the European Union (the "CJEU") ruled that the German fiscal regulation imposing an additional excise tax on HTPs does not contravene EU law. On May 15, 2024, following the decision issued by CJEU, the Fiscal Court in Dusseldorf (the "FCD") also ruled that the German fiscal regulation imposing an additional excise tax on HTPs does not contravene EU law. The FCD admitted an appeal to the Federal Tax Court. On June 19, 2024, PMI submitted an appeal. The negative impact will continue, at least until the appeal ruling on the legality of the surcharge is concluded. PMI currently accounts for the surcharge as a reduction in net revenues. The amounts withdrawn before May 15, 2024, were under a payment suspension. Despite this payment suspension and, in order to avoid the future addition of interest, PMI elected, on January 14, 2025, to pay the amount outstanding of EUR 721 million (approximately $751 million), excluding accrued interest. An unfavorable outcome to the appeal would negatively impact PMI’s future cash provided by operating activities for the amounts of unpaid interest. A favorable outcome to the appeal would positively impact future PMI’s operating results and future cash provided by operating activities for the amounts paid in January 2025.
Previous wording
The tobacco industry and our company face a number of challenges that may adversely affect our business, product sales volume, results of operations, cash flows and financial position. These challenges, which are discussed below and in "Cautionary Factors That May Affect Future Results" include:
Current wording
The industries we operate in and our company face a number of challenges that may adversely affect our business, product sales volume, results of operations, cash flows, and financial position. These challenges, which are discussed below and in "Cautionary Factors That May Affect Future Results" include:
Previous wording
•regulatory restrictions on our products, including restrictions on the packaging, marketing, registration and sale of tobacco or other nicotine-containing products or related devices that could reduce our competitiveness, eliminate our ability to communicate with adult consumers, or ban certain of our products;
Current wording
•regulatory restrictions on our products, including restrictions on the product formulation, packaging, marketing, registration and sale of tobacco or other nicotine-containing products or related devices that could reduce our competitiveness, eliminate our ability to communicate with adult consumers, or ban certain of our products;
Previous wording
•illicit trade in cigarettes and other tobacco and nicotine-containing products, including counterfeit, contraband and other non-compliant or otherwise illicit products;
Current wording
•illicit trade in tobacco and nicotine-containing products, including counterfeit, contraband and other non-compliant or otherwise illicit products;
Showing the first 40 of 153 pairs. Open the source sections for the rest.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
This publication indicates that significant reductions in the levels of selected toxicants are likely to reduce toxicant exposure, which BfR stated might be regarded as a discrete benefit compared to combustible cigarettes.
Current report — wording carried from elsewhere
We anticipate that significant regulatory restrictions will continue to be considered and adopted in many markets. Regulatory initiatives that have been contemplated, proposed, introduced, or enacted by governmental authorities in various jurisdictions include:
Current report — wording carried from elsewhere
While we do not now expect that the recent and currently anticipated trade tariffs imposed by the U.S. and other countries will materially impact our business, the global tariff environment is volatile and further tariff or trade related developments could result in risks to PMI’s business, including increased production costs; limited market access; supplier financial condition degradation resulting in reduced or interrupted supplies; and price increases or other economic impacts that could reduce consumer demand. Additionally, while the impact of the Middle East conflict on our business in the first quarter was immaterial, the duration and potential impact of the situation remain uncertain and it could lead to increased inflationary pressures, which could impact consumer behavior as well as our transportation, energy, and other input costs; broader geopolitical instability; security or cybersecurity incidents; or other consequences that, individually or in the aggregate, may materially adversely affect our business, results of operations, cash flows, or financial condition.
Current report — wording carried from elsewhere
Any of the foregoing developments could cause significant volume declines in our Global Travel Retail business and certain other key markets; disrupt or delay our distribution, manufacturing or supply chain; increase currency volatility; increase costs of our materials and operations and lead to loss of property or equipment that are critical to our business in certain markets and difficulty in staffing and managing our operations, all of which could have a material adverse effect on our business, operations, volumes, revenues, cash flows, financial position, net earnings and profitability. We discuss additional risks associated with Russia's invasion of Ukraine above.
Current report — wording carried from elsewhere
for a description of certain intellectual property proceedings.
Rearranged previous paragraphs (18)
Previous report — wording carried elsewhere
In 2022, we reached 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.
Previous report — wording carried elsewhere
•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 report — wording carried elsewhere
Net revenues by product category for the nine months ended September 30, 2025 and 2024 are shown below:
Previous report — wording carried elsewhere
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 report — wording carried elsewhere
•Diluted Earnings Per Share - The changes in our reported diluted EPS for the three months ended September 30, 2025, from the comparable 2024 amounts, were as follows:
Previous report — wording carried elsewhere
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 report — wording carried elsewhere
Operations – The increase in diluted EPS of $0.21 from our operations in the table above was due primarily to the following segments:
Previous report — wording carried elsewhere
Estimated industry volume (excluding China and the U.S.) for cigarettes and HTUs decreased by 0.7%.
Previous report — wording carried elsewhere
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 report — wording carried elsewhere
Oral smoke-free products conversion: (i) nicotine pouches: 15 pouches per can in the U.S. and approximately 20 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.
Previous report — wording carried elsewhere
E-vapor products conversion: one milliliter of e-vapor liquid equivalent to 10 units.
Previous report — wording carried 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.
Previous report — wording carried elsewhere
At September 30, 2025, our credit ratings and outlook by major credit rating agencies were as follows:
Previous report — wording carried elsewhere
At September 30, 2025, our committed revolving credit facilities were as follows:
Previous report — wording carried elsewhere
Term Loan Facility related to the Financing of the Swedish Match Acquisition
Previous report — wording carried elsewhere
Our key strategic priorities are to: (i) continue developing and commercializing products that present less risk of harm to adult smokers who switch to smoke-free products versus continued cigarette smoking; and (ii) encourage and educate current adult smokers who would otherwise continue to smoke cigarettes to switch to those products. For our efforts to be successful, we must:
Previous report — wording carried elsewhere
Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 for additional information concerning impairment determination and calculation.
Previous report — wording carried elsewhere
Risks Related to our International Operations