# ALTRIA GROUP, INC. (MO)

Informational only - not investment advice.

CIK: 0000764180
SIC: 2111 Cigarettes
SIC breadcrumb: [Manufacturing](/division/D/) > [SIC Major Group 21](/major-group/21/) > [SIC 2111 Cigarettes](/industry/2111/)
Latest 10-K filed: 2026-02-25
SEC page: https://www.sec.gov/edgar/browse/?CIK=764180
Filing source: https://www.sec.gov/Archives/edgar/data/764180/000076418026000017/mo-20251231.htm

## At a glance

FY2025 · period end 2025-12-31 · filed 2026-02-25 · accession 0000764180-26-000017 · source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000764180.json

| Metric | Value | FY | Provenance |
| --- | ---: | ---: | --- |
| Revenue | 23,279,000,000 USD | 2025 | verified |
| Net income | 6,947,000,000 USD | 2025 | verified |
| Assets | 35,017,000,000 USD | 2025 | verified |
| Free cash flow | 9,074,000,000 USD | 2025 | computed |
| Net margin | 29.84% | 2025 | computed |
| Operating margin | 42.52% | 2025 | computed |
| Revenue YoY | -3.08% | 2025 | computed |

Stockholders' equity was not positive at FY2025 year-end (-3,502,000,000 USD, as filed); ROE and liabilities / equity are omitted rather than computed.

Computed values are grepcent-computed from the verified facts above and may differ from ratios the company itself reports. Free cash flow = operating cash flow − capital expenditures. Net margin = net income ÷ revenue. Operating margin = operating income ÷ revenue. Revenue YoY = FY2025 revenue ÷ FY2024 revenue − 1 (consecutive fiscal years only).

No market price, no rating, no forecast on this site. Not investment advice.


## Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
| --- | ---: | --- | ---: | --- |
| Revenue | 23279000000 | USD | 2025 | 2026-02-25 |
| Net income | 6947000000 | USD | 2025 | 2026-02-25 |
| Assets | 35017000000 | USD | 2025 | 2026-02-25 |

## Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-25. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000764180.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenue | 25,744,000,000 | 25,576,000,000 | 25,364,000,000 | 25,110,000,000 | 26,153,000,000 | 26,013,000,000 | 25,096,000,000 | 24,483,000,000 | 24,018,000,000 | 23,279,000,000 |
| Net income | 14,239,000,000 | 10,222,000,000 | 6,963,000,000 | -1,293,000,000 | 4,467,000,000 | 2,475,000,000 | 5,764,000,000 | 8,130,000,000 | 11,264,000,000 | 6,947,000,000 |
| Operating income | 8,761,000,000 | 9,593,000,000 | 9,115,000,000 | 10,326,000,000 | 10,873,000,000 | 11,560,000,000 | 11,919,000,000 | 11,547,000,000 | 11,241,000,000 | 9,899,000,000 |
| Gross profit | 11,572,000,000 | 11,963,000,000 | 12,254,000,000 | 12,711,000,000 | 13,023,000,000 | 13,992,000,000 | 14,246,000,000 | 14,284,000,000 | 14,367,000,000 | 14,542,000,000 |
| Diluted EPS | 7.28 | 5.31 | 3.68 | -0.70 | 2.40 | 1.34 | 3.19 | 4.57 | 6.54 | 4.12 |
| Operating cash flow | 3,826,000,000 | 4,901,000,000 | 8,391,000,000 | 7,837,000,000 | 8,385,000,000 | 8,405,000,000 | 8,256,000,000 | 9,287,000,000 | 8,753,000,000 | 9,290,000,000 |
| Capital expenditures | 189,000,000 | 199,000,000 | 238,000,000 | 246,000,000 | 231,000,000 | 169,000,000 | 205,000,000 | 196,000,000 | 142,000,000 | 216,000,000 |
| Dividends paid | 4,512,000,000 | 4,807,000,000 | 5,415,000,000 | 6,069,000,000 | 6,290,000,000 | 6,446,000,000 | 6,599,000,000 | 6,779,000,000 | 6,845,000,000 | 6,960,000,000 |
| Share buybacks | 1,030,000,000 | 2,917,000,000 | 1,673,000,000 | 845,000,000 | 0.00 | 1,675,000,000 | 1,825,000,000 | 1,000,000,000 | 3,400,000,000 | 1,000,000,000 |
| Assets | 45,932,000,000 | 43,202,000,000 | 55,459,000,000 | 49,271,000,000 | 47,414,000,000 | 39,523,000,000 | 36,954,000,000 | 38,570,000,000 | 35,177,000,000 | 35,017,000,000 |
| Liabilities | 33,121,000,000 | 27,784,000,000 | 40,631,000,000 | 42,914,000,000 | 44,449,000,000 | 41,129,000,000 | 40,877,000,000 | 42,060,000,000 | 37,365,000,000 | 38,469,000,000 |
| Stockholders' equity | 12,770,000,000 | 15,377,000,000 | 14,787,000,000 | 6,222,000,000 | 2,839,000,000 | -1,606,000,000 | -3,973,000,000 | -3,540,000,000 | -2,238,000,000 | -3,502,000,000 |
| Cash and cash equivalents | 4,569,000,000 | 1,253,000,000 | 1,333,000,000 | 2,117,000,000 | 4,945,000,000 | 4,544,000,000 | 4,030,000,000 | 3,686,000,000 | 3,127,000,000 | 4,474,000,000 |
| Free cash flow | 3,637,000,000 | 4,702,000,000 | 8,153,000,000 | 7,591,000,000 | 8,154,000,000 | 8,236,000,000 | 8,051,000,000 | 9,091,000,000 | 8,611,000,000 | 9,074,000,000 |

### Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Net margin | 55.31% | 39.97% | 27.45% | -5.15% | 17.08% | 9.51% | 22.97% | 33.21% | 46.90% | 29.84% |
| Operating margin | 34.03% | 37.51% | 35.94% | 41.12% | 41.57% | 44.44% | 47.49% | 47.16% | 46.80% | 42.52% |
| Return on assets | 31.00% | 23.66% | 12.56% | -2.62% | 9.42% | 6.26% | 15.60% | 21.08% | 32.02% | 19.84% |
| Current ratio | 0.98 | 0.64 | 0.20 | 0.59 | 0.79 | 0.71 | 0.84 | 0.49 | 0.51 | 0.65 |

## As-reported value updates

No tracked differences above grepcent's stated thresholds and capped precision rule were found between the earliest XBRL-filed value and the value currently on file for the standardized annual metrics grepcent tracks.


## Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-07-30. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000764180.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

| Quarter | End date | Revenue | Net income | Diluted EPS | Method |
| --- | --- | ---: | ---: | ---: | --- |
| 2022-Q3 | 2022-09-30 |  |  | 0.12 | reported discrete quarter |
| 2023-Q1 | 2023-03-31 |  |  | 1.00 | reported discrete quarter |
| 2023-Q2 | 2023-06-30 |  |  | 1.19 | reported discrete quarter |
| 2023-Q3 | 2023-09-30 | 6,281,000,000 | 2,166,000,000 | 1.22 | reported discrete quarter |
| 2023-Q4 | 2023-12-31 | 5,975,000,000 | 2,060,000,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2024-Q1 | 2024-03-31 | 5,576,000,000 | 2,129,000,000 | 1.21 | reported discrete quarter |
| 2024-Q2 | 2024-06-30 | 6,209,000,000 | 3,803,000,000 | 2.21 | reported discrete quarter |
| 2024-Q3 | 2024-09-30 | 6,259,000,000 | 2,293,000,000 | 1.34 | reported discrete quarter |
| 2024-Q4 | 2024-12-31 | 5,974,000,000 | 3,039,000,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2025-Q1 | 2025-03-31 | 5,259,000,000 | 1,077,000,000 | 0.63 | reported discrete quarter |
| 2025-Q2 | 2025-06-30 | 6,102,000,000 | 2,378,000,000 | 1.41 | reported discrete quarter |
| 2025-Q3 | 2025-09-30 | 6,072,000,000 | 2,375,000,000 | 1.41 | reported discrete quarter |
| 2025-Q4 | 2025-12-31 | 5,846,000,000 | 1,117,000,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2026-Q1 | 2026-03-31 | 5,428,000,000 | 2,183,000,000 | 1.30 | reported discrete quarter |
| 2026-Q2 | 2026-06-30 | 6,111,000,000 | 2,298,000,000 | 1.37 | reported discrete quarter |

## Filed narrative (10-K & 10-Q)

## Business

Verbatim Item 1 Business section from MO's latest 10-K: [/company/MO/business/](/company/MO/business/).

## Risk Factors

Verbatim Item 1A Risk Factors from MO's latest 10-K: [/company/MO/risk-factors/](/company/MO/risk-factors/).

## Latest quarter (10-Q)

Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/764180/000076418026000094/mo-20260630.htm

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary.
Confidence: high
Filing date: 2026-07-30
Report date: 2026-06-30

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with the other sections in this Quarterly Report on Form 10-Q (“Form 10-Q”), including our condensed consolidated financial statements and related notes contained in Item 1. Financial Statements of this Form 10-Q (“Item 1”). All references to “Notes” in this MD&A are to Notes to our condensed consolidated financial statements in Item 1. When used in this Form 10-Q, the terms “Altria,” “we,” “us” and “our” refer to either (i) Altria Group, Inc. and its consolidated subsidiaries or (ii) Altria Group, Inc. only and not its consolidated subsidiaries, as appropriate in the context.

In this MD&A section, we refer to the following “adjusted” financial measures: adjusted operating companies income (loss) (“OCI”); adjusted OCI margins; adjusted net earnings; adjusted diluted earnings per share (“EPS”); and adjusted effective tax rates. We also refer to the ratio of debt-to-Consolidated EBITDA (earnings before interest, taxes, depreciation and amortization, as defined in our credit agreement, which includes certain adjustments). These financial measures are not required by, or calculated in accordance with, United States generally accepted accounting principles (“GAAP”) and may not be calculated the same as similarly titled measures used by other companies. These financial measures should thus be considered as supplemental in nature and not considered in isolation or as a

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substitute for the related financial information prepared in accordance with GAAP. For a further description of these non-GAAP financial measures, see the Non-GAAP Financial Measures section below.

Executive Summary

Our Business

We have a leading portfolio of nicotine products for U.S. nicotine consumers age 21+. We are Moving Beyond Smoking® by responsibly transitioning adult smokers to a smoke-free future, competing vigorously for existing smoke-free adult nicotine consumers and exploring new growth opportunities - beyond the United States and beyond nicotine (“Vision”). We previously established our 2028 Enterprise Goals (“2028 Goals”) to provide our investors with specific metrics to measure our progress as we execute on our Vision. For further discussion of our 2028 Goals, see our Annual Report on Form 10-K for the year ended December 31, 2025 (“2025 Form 10-K”).

Our wholly owned subsidiaries include leading manufacturers of both combustible and smoke-free products. In combustibles, we own Philip Morris USA Inc. (“PM USA”), the most profitable U.S. cigarette manufacturer, and John Middleton Co. (“Middleton”), a leading U.S. cigar manufacturer.

In smoke-free products, we own U.S. Smokeless Tobacco Company LLC (“USSTC”), the leading global moist smokeless tobacco (“MST”) manufacturer, Helix Innovations LLC (“Helix”), a leading manufacturer of oral nicotine pouches, and NJOY, LLC (“NJOY”), an e-vapor manufacturer with products covered by marketing granted orders (“MGO”) from the U.S. Food and Drug Administration (“FDA”). Additionally, we have a majority-owned joint venture, Horizon Innovations LLC (“Horizon”), for the U.S. marketing and commercialization of heated tobacco stick products. As of the date of this Form 10-Q, Horizon had no products in the U.S. marketplace.

The brand portfolios of our operating companies include Marlboro®, Black & Mild®, Copenhagen®, Skoal®, on!® and NJOY®. Trademarks related to Altria referenced in this Form 10-Q are the property of Altria or our subsidiaries or are used with permission.

Our investments in equity securities include Anheuser-Busch InBev SA/NV (“ABI”), the world’s largest brewer, and Cronos Group Inc. (“Cronos”), a leading Canadian cannabinoid company.

Trends and Developments

In this section of the MD&A, we discuss certain factors that have impacted our businesses as of the date of this Form 10-Q. In addition, we are aware of and address certain trends and developments that could, individually or in the aggregate, have a material impact on our businesses, including the value of our investments in equity securities, in the future. In this section, we focus on the discretionary income pressures on adult nicotine consumers, evolving consumer preferences, illicit flavored disposable e-vapor products and supply chain disruptions. Other trends and developments are discussed elsewhere in this MD&A.

Through the second quarter of 2026, U.S. adult nicotine consumers continued to face inflationary pressure on discretionary income, with impacts more pronounced among lower-income consumers. Heightened geopolitical risk and uncertainty following the recent developments in the Middle East contributed to increased energy price volatility, with gas prices averaging $4.05 per gallon during June. Gas prices contributed to elevated inflation in June of 3.5%, above the Federal Reserve’s 2% target.

Overall discretionary income pressures on adult nicotine consumers have resulted in increased discount brand share and contributed to evolving adult nicotine consumer preferences, each of which has negatively impacted the sales volumes of certain of our operating companies’ premium brands. For the second quarter of 2026, the discount retail share of the cigarette category reached 33.8%, an increase of 2.6 share points versus the second quarter of 2025 and 0.5 share points sequentially. When adjusted for trade inventory movements, our smokeable products segment domestic cigarette shipment volume declined by an estimated 4.5% in the second quarter of 2026 versus the second quarter of 2025. When adjusted for trade inventory movements, total estimated domestic cigarette industry volume declined by 5% in the second quarter of 2026 versus the second quarter of 2025. We believe moderating estimated domestic cigarette industry volume decline, which began in the third quarter of 2025, continues to primarily be driven by reduced cross-category movement between cigarettes and illicit flavored disposable e-vapor products. Additionally, we believe that a significant number of adult nicotine consumers switch among nicotine categories, use multiple forms of nicotine products and try innovative nicotine products, such as e-vapor products and oral nicotine pouches. The U.S. nicotine pouch category continued to grow throughout the second quarter of 2026 to 59.9% of the U.S. oral tobacco category, an increase of 8.1 share points versus the second quarter of 2025 and 1.8 share points sequentially. As innovative smoke-free products evolve to better address the preferences of adult nicotine consumers, these consumers continue to transition from cigarettes and MST products to innovative smoke-free products, which has reduced the sales volumes of our operating companies’ cigarette and MST products.

Various states and the federal government have taken regulatory and enforcement actions against manufacturers, distributors and retailers of illicit flavored disposable e-vapor products. For example, the FDA and U.S. Customs and Border Protection have made it more difficult to import properly declared illicit e-vapor products, seized unauthorized e-vapor products and issued warning letters to importers. Despite these enforcement measures, insufficient actions against manufacturers, distributors and retailers of nicotine products requiring FDA review for which no premarket tobacco product applications (“PMTA”) have been submitted have allowed such products

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to continue to proliferate in the market. We expect that effective enforcement against illicit products will occur more gradually than initially expected and continue to monitor the overall dynamics and competitive threats to our brands across multiple nicotine categories.

We are monitoring volatility in domestic and global economies and disruptions in the supply and distribution chains. This volatility and disruption are the result of several factors, including macroeconomic conditions, raw materials availability and geopolitical events. We continue to assess the impact of volatility on price, availability or quality of tobacco, other raw materials or component parts, and work to mitigate the potential negative impacts of macroeconomic and geopolitical dynamics on our businesses through, among other actions, proactive engagement with current and potential suppliers and distributors and the development of alternative sourcing strategies.

See Operating Results by Business Segment - Business Environment for additional information on the trends and developments discussed above.

The trends and developments above have not had a material adverse impact on our results of operations, cash flows or financial position or our ability to achieve our Vision. As the trends and developments evolve and new ones emerge, we will continue to evaluate the potential impacts on our businesses, investments and Vision.

Consolidated Results of Operations for the Six Months Ended June 30, 2026

The changes in net earnings and diluted EPS for the six months ended June 30, 2026, from the six months ended June 30, 2025, were due primarily to the following:

[[GREPCENT_TABLE]]
[["(in millions, except per share data)","Net Earnings","","Diluted EPS"],["For the six months ended June 30, 2025","$","3,455","","","$","2.04"],["2025 Acquisition-related items","77","","","0.05"],["2025 Asset impairment, exit and implementation costs","896","","","0.53"],["2025 Tobacco and health and certain other litigation items","34","","","0.02"],["2025 Amortization of intangibles","62","","","0.04"],["2025 ABI-related special items","1","","","\u2014"],["2025 Cronos-related special items","(16)","","","(0.01)"],["2025 Income tax items","13","","","\u2014"],["Subtotal 2025 special items","1,067","","","0.63"],["2026 NPM Adjustment Items","9","","","\u2014"],["2026 Acquisition-related items","(10)","","","\u2014"],["2026 Asset impairment, exit and implementation costs","(72)","","","(0.04)"],["2026 Tobacco and health and certain other litigation items","(74)","","","(0.04)"],["2026 Amortization of intangibles","(42)","","","(0.03)"],["2026 ABI-related special items","(60)","","","(0.04)"],["2026 Cronos-related special items","2","","","\u2014"],["2026 Income tax items","30","","","0.02"],["Subtotal 2026 special items","(217)","","","(0.13)"],["Fewer shares outstanding","\u2014","","","0.03"],["Change in tax rate","23","","","0.01"],["Operations","153","","","0.09"],["For the six months ended June 30, 2026","$","4,481","","","$","2.67"],["2026 Reported Net Earnings and Reported Diluted EPS","$","4,481","","","$","2.67"],["2025 Reported Net Earnings and Reported Diluted EPS","$","3,455","","","$","2.04"],["% Change","29.7","%","","30.9","%"],["2026 Adjusted Net Earnings and Adjusted Diluted EPS","$","4,698","","","$","2.80"],["2025 Adjusted Net Earnings and Adjusted Diluted EPS","$","4,522","","","$","2.67"],["% Change","3.9","%","","4.9","%"]]
[[/GREPCENT_TABLE]]

For a discussion of special items and other business drivers affecting the comparability of statements of earnings amounts and reconciliations of adjusted net earnings and adjusted diluted EPS, see Consolidated Operating Results below.

▪Fewer Shares Outstanding: Fewer shares outstanding were due to shares we repurchased under our share repurchase programs.

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▪Operations: The increase of $153 million in operations (which excludes the impact of special items shown in the table above) was due primarily to higher OCI and higher income from our equity investment in ABI, partially offset by lower net periodic benefit income, excluding service cost.

For further details, see Consolidated Operating Results and Operating Results by Business Segment below.

Consolidated Results of Operations for the Three Months Ended June 30, 2026

The changes in net earnin

[Excerpt truncated for page length; source filing is linked above.]

## Latest 10-K MD&A (excerpt)

Latest 10-K Item 7 source: https://www.sec.gov/Archives/edgar/data/764180/000076418026000017/mo-20251231.htm
Complete FY 2025 MD&A: /company/MO/mda/fy2025/

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary.
Confidence: high
Filing date: 2026-02-25
Report date: 2025-12-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with the other sections of this Form 10-K, including our consolidated financial statements and related notes contained in Item 8, and the discussion of risk factors that may affect future results in Item 1A. All references to “Notes” in this MD&A are to Notes to our consolidated financial statements in Item 8. Additionally, refer to Item 7. MD&A in our 2024 Annual Report on Form 10-K for management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023, which we filed with the SEC on February 26, 2025 and is incorporated by reference into this Form 10-K.

In this MD&A section, we refer to the following “adjusted” financial measures: adjusted operating companies income (loss) (“OCI”); adjusted OCI margins; adjusted net earnings; adjusted diluted earnings per share (“EPS”); and adjusted effective tax rates. We also refer to the ratio of debt-to-Consolidated EBITDA (earnings before interest, taxes, depreciation and amortization, as defined in our credit agreement, which includes certain adjustments). These financial measures are not required by, or calculated in accordance with, GAAP and may not be calculated the same as similarly titled measures used by other companies. These financial measures should thus be considered as supplemental in nature and not considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP. For a further description of these non-GAAP financial measures, see the Non-GAAP Financial Measures section below.

Executive Summary

Our Business

We have a leading portfolio of tobacco products for U.S. tobacco consumers age 21+. We are Moving Beyond SmokingTM, by responsibly transitioning adult smokers to a smoke-free future, competing vigorously for existing smoke-free adult nicotine consumers and exploring new growth opportunities - beyond the United States and beyond nicotine.

Our wholly owned subsidiaries include leading manufacturers of both combustible and smoke-free products. In combustibles, we own PM USA, the most profitable U.S. cigarette manufacturer, and Middleton, a leading U.S. cigar manufacturer.

In smoke-free products, we own USSTC, the leading global MST manufacturer, Helix, a leading manufacturer of oral nicotine pouches, and NJOY, an e-vapor manufacturer with products covered by MGOs from the FDA. Additionally, we have a majority-owned joint venture, Horizon, for the U.S. marketing and commercialization of HTS products.

The brand portfolios of our operating companies include Marlboro, Black & Mild, Copenhagen, Skoal, on! and NJOY. Trademarks related to Altria referenced in this Form 10-K are the property of Altria or our subsidiaries or are used with permission.

Our investments in equity securities include ABI, the world’s largest brewer, and Cronos, a leading Canadian cannabinoid company.

For a description of Altria, see Item 1. Business of this Form 10-K (“Item 1”).

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Vision and 2028 Goals

As we execute on our Vision, we established our 2028 Enterprise Goals (“2028 Goals”) to provide our investors with specific metrics to measure our progress. Our 2028 Goals are:

▪Corporate

▪Deliver a mid-single digits adjusted diluted EPS compounded annual growth rate (“CAGR”) in 2028 from a $4.87 base in 2022, which has been recast as described in Non-GAAP Financial Measures below (for our progress through 2025, see Consolidated Results of Operations);

▪A progressive dividend goal targeting mid-single digits dividend per share growth annually through 2028;

▪Target a debt-to-Consolidated EBITDA ratio of approximately 2.0x (see Liquidity and Capital Resources);

▪Maintain our leadership position in the U.S. tobacco space; and

▪Maintain a total adjusted OCI margin of at least 60% in each year through 2028 (see Operating Results by Business Segment).

▪U.S. Smoke-Free Portfolio

▪Due to ongoing market disruption caused by illicit e-vapor products that have evaded the regulatory process, we continue to reassess our smoke-free goals and expect to provide updated goals when we have more clarity on how the legitimate e-vapor market may evolve. We remain steadfast in our commitment to our Vision and to building a portfolio of FDA-authorized smoke-free products for adult smokers and adult nicotine consumers currently using smoke-free products. For additional information on the e-vapor category, see Operating Results by Business Segment - Business Environment.

▪Long-Term Growth

▪Compete internationally in the top innovative oral tobacco markets and develop a pathway to participate in heated tobacco and e-vapor markets; and

▪Enter non-nicotine categories with broad commercial distribution of at least five products by 2028.

Optimize & Accelerate Initiative

In October 2024, we announced a multi-phase Initiative designed to modernize our ways of working as we work towards achieving our Vision and 2028 Goals. In 2025, we began modernizing our ways of working, which enabled increased speed, efficiency and effectiveness across the organization. We are now adding the final phases of the Initiative and continue to expect to deliver cumulative savings of at least $600 million by the end of 2029. We continue to plan to reinvest these savings in our businesses in support of our Vision and 2028 Goals. These cumulative cost savings exclude our estimated pre-tax charges for the Initiative of approximately $175 million, updated from our prior estimate of approximately $125 million, as a result of finalizing the plans for all phases of the Initiative, which we treat as special items and exclude from our adjusted diluted EPS. For further discussion of the Initiative, see Note 5. Exit and Implementation Costs (“Note 5”).

Trends and Developments

In this section of the MD&A, we discuss certain factors that have impacted our businesses as of the date of this Form 10-K. In addition, we are aware of and address certain trends and developments that could, individually or in the aggregate, have a material impact on our businesses, including the value of our investments in equity securities, in the future. In this section, we focus on the discretionary income pressures on adult nicotine consumers, tariffs, evolving consumer preferences and illicit flavored disposable e-vapor products. Other trends and developments are discussed elsewhere in this MD&A.

Throughout 2025, U.S. adult nicotine consumers faced persistent inflationary pressures on discretionary income, with lower-income consumers particularly affected. Inflation remained above the Federal Reserve’s 2% target, and elevated prices for essentials such as groceries and housing continued to constrain spending, prompting many low-income earners to cut back and rely more heavily on credit. Gas prices trended downward as expected, with the most notable improvement seen in December when the average price fell to $2.89 per gallon, bringing the average in the fourth quarter of 2025 to approximately $3.00 per gallon. Meanwhile, tariffs introduced earlier in the year steadily increased over recent months, weighing on consumer confidence and adding headwinds to discretionary spending. While we have not observed a material impact on adult nicotine consumer purchasing behavior as a result of tariffs, we continue to closely monitor the additional pressure that tariff-related price increases may exert. In addition, we are monitoring other effects of tariffs on our businesses, including the price, availability and quality of tobacco, raw materials, ingredients and component parts used to manufacture our operating companies’ products. We do not expect tariffs to have a material impact on our costs in 2026 based on presently available information.

Overall discretionary income pressures on adult nicotine consumers have resulted in increased discount brand share performance and continued to contribute to evolving adult nicotine consumer preferences, each of which has negatively impacted the sales volumes of our operating companies’ premium brands. For the fourth quarter of 2025, the discount retail share of the cigarette category reached 32.9%, an increase of 2.6 share points versus the fourth quarter of 2024 and 0.7 share points sequentially. Additionally, we believe that a significant number of adult nicotine consumers switch among tobacco categories, use multiple forms of tobacco products and try

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innovative nicotine products, such as e-vapor products and oral nicotine pouches. The U.S. nicotine pouch category continued to grow throughout the fourth quarter of 2025 to 56.9% of the U.S. oral tobacco category, an increase of 10.4 share points versus the fourth quarter of 2024. When adjusted for trade inventory movements, smokeable products segment’s domestic cigarette shipment volume declined by an estimated 7% in the fourth quarter of 2025 versus the fourth quarter of 2024. We estimate that, when adjusted for trade inventory movements and other factors, total estimated domestic cigarette industry volume declined by 6.5% in the fourth quarter of 2025 versus the fourth quarter of 2024. In the third quarter of 2025, we estimated the industry decline rate to be 8% versus the third quarter of 2024. We believe that the 1.5 percentage points reduction in the domestic cigarette industry volume decline rate in the current quarter was primarily due to illicit flavored disposable e-vapor product growth moderating slightly in 2025 as compared to the prior year. We have closely monitored this trend and its impact on cigarette industry decline rates. Based on our latest data, we are updating our cigarette category volume decomposition. We now estimate that cross-category movement, primarily driven by illicit flavored disposable e-vapor products, contributed approximately 2% to 3% to the cigarette industry volume decline during 2025 versus our prior estimate of approximately 3% to 4%. As innovative smoke-free products evolve to better address the preferences of adult nicotine consumers, these consumers continue to transition from cigarettes and MST products to innovative smoke-free products, which has negatively impacted the sales volumes of our operating companies’ cigarette and MST products.

Product assortment, regulation and enforcement continue to evolve in the e-vapor category. Flavored disposable e-vapor products have continued driving growth in the e-vapor category. We estimate that flavored disposable e-vapor products, the majority of which we believe have evaded the regulatory process, represent approximately 70% of the e-vapor category. In response to the proliferation of illicit flavored disposable e-vapor products, states and the federal government have taken various regulatory and enforcement actions. For example, the FDA and U.S. Customs and Border Protection have made it more difficult to import properly declared illicit e-vapor products, seized unauthorized e-vapor products and issued warning letters to importers. However, although the FDA, in conjunction with other federal entities, has increased enforcement activity, insufficient actions against manufacturers, distributors and retailers of nicotine products requiring FDA review for which no PMTAs have been submitted have allowed such products to continue to proliferate in the market. We expect that effective enforcement against illicit flavored disposable e-vapor products will occur more gradually than initially anticipated. As a result, in connection with the preparation of our financial statements for the year ended December 31, 2025, we recorded non-cash impairments of our e-vapor reporting unit goodwill and definite-lived intangible assets. For fu

[Excerpt truncated for page length; the complete text is on the linked full-MD&A page.]

Read the full FY 2025 MD&A: /company/MO/mda/fy2025/
All MD&A years: /company/MO/mda/


## MD&A history

Prior-year 10-K MD&A spans are extracted from SEC filings with the same bounded parser used for the latest filing. Each year's full verbatim text is on its own sub-page.

- [FY 2024 MD&A](/company/MO/mda/fy2024/): filed 2025-02-26; accession 0000764180-25-000019 (https://www.sec.gov/Archives/edgar/data/764180/000076418025000019/mo-20241231.htm)
- [FY 2023 MD&A](/company/MO/mda/fy2023/): filed 2024-02-27; accession 0000764180-24-000018 (https://www.sec.gov/Archives/edgar/data/764180/000076418024000018/mo-20231231.htm)
- [FY 2022 MD&A](/company/MO/mda/fy2022/): filed 2023-02-27; accession 0000764180-23-000020 (https://www.sec.gov/Archives/edgar/data/764180/000076418023000020/mo-20221231.htm)
- [FY 2021 MD&A](/company/MO/mda/fy2021/): filed 2022-02-25; accession 0000764180-22-000019 (https://www.sec.gov/Archives/edgar/data/764180/000076418022000019/mo-20211231.htm)




## Macro cross-references

Indicators mapped to this company's SIC classification (industry 2111 Cigarettes) by grepcent's deterministic macro-sector crosswalk. A navigational mapping, not a statistical or causal claim.

- [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index
- [TCU](/indicator/TCU/): Capacity Utilization: Total Index
- [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities
- [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product
- [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate
- [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private
- [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm

Macro-to-micro threads including this sector: [Inflation (CPI / PCE / PPI)](/thread/inflation-cpi-pce-ppi/), [US labor market](/thread/us-labor-market/), [Growth & output](/thread/growth-output/), [Money & trade](/thread/money-trade/), [Government finances](/thread/government-finances/), [Sector employment](/thread/sector-employment/), [Industrial orders & inventories](/thread/industrial-orders/), [Trade & external](/thread/trade-external/).

All macro indicators: /indicators/


## For LLMs & downloads

Markdown twin: /company/MO.md · JSON record: /company/MO.json · verified financials: /company/MO/financials.json / /company/MO/financials.csv · machine TOC for the whole site: /llms.txt