# Philip Morris International Inc. (PM)

Informational only - not investment advice.

CIK: 0001413329
SIC: 2111 Cigarettes
SIC breadcrumb: [Manufacturing](/division/D/) > [SIC Major Group 21](/major-group/21/) > [SIC 2111 Cigarettes](/industry/2111/)
Latest 10-K filed: 2026-02-06
SEC page: https://www.sec.gov/edgar/browse/?CIK=1413329
Filing source: https://www.sec.gov/Archives/edgar/data/1413329/000162828026005939/pm-20251231.htm

## At a glance

FY2025 · period end 2025-12-31 · filed 2026-02-06 · accession 0001628280-26-005939 · source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001413329.json

| Metric | Value | FY | Provenance |
| --- | ---: | ---: | --- |
| Revenue | 40,648,000,000 USD | 2025 | verified |
| Net income | 11,348,000,000 USD | 2025 | verified |
| Assets | 69,185,000,000 USD | 2025 | verified |
| Free cash flow | 10,664,000,000 USD | 2025 | computed |
| Net margin | 27.92% | 2025 | computed |
| Operating margin | 36.64% | 2025 | computed |
| Revenue YoY | +7.31% | 2025 | computed |

Stockholders' equity was not positive at FY2025 year-end (-9,994,000,000 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 | 40648000000 | USD | 2025 | 2026-02-06 |
| Net income | 11348000000 | USD | 2025 | 2026-02-06 |
| Assets | 69185000000 | USD | 2025 | 2026-02-06 |

## Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-06. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001413329.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

| Metric | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenue |  |  | 26,685,000,000 | 28,748,000,000 | 29,625,000,000 | 29,805,000,000 | 28,694,000,000 | 31,405,000,000 | 31,762,000,000 | 35,174,000,000 | 37,878,000,000 | 40,648,000,000 |
| Net income |  |  | 6,967,000,000 | 6,035,000,000 | 7,911,000,000 | 7,185,000,000 | 8,056,000,000 | 9,109,000,000 | 9,048,000,000 | 7,813,000,000 | 7,057,000,000 | 11,348,000,000 |
| Operating income |  |  | 10,903,000,000 | 11,581,000,000 | 11,377,000,000 | 10,531,000,000 | 11,668,000,000 | 12,975,000,000 | 12,246,000,000 | 11,556,000,000 | 13,402,000,000 | 14,892,000,000 |
| Gross profit |  |  | 17,294,000,000 | 18,316,000,000 | 18,867,000,000 | 19,292,000,000 | 19,125,000,000 | 21,375,000,000 | 20,360,000,000 | 22,281,000,000 | 24,549,000,000 | 27,282,000,000 |
| Diluted EPS |  |  | 4.48 | 3.88 | 5.08 | 4.61 | 5.16 | 5.83 | 5.81 | 5.02 | 4.52 | 7.26 |
| Operating cash flow |  |  | 8,077,000,000 | 8,912,000,000 | 9,478,000,000 | 10,090,000,000 | 9,812,000,000 | 11,967,000,000 | 10,803,000,000 | 9,204,000,000 | 12,217,000,000 | 12,233,000,000 |
| Capital expenditures |  |  | 1,172,000,000 | 1,548,000,000 | 1,436,000,000 | 852,000,000 | 602,000,000 | 748,000,000 | 1,077,000,000 | 1,321,000,000 | 1,444,000,000 | 1,569,000,000 |
| Dividends paid |  |  | 6,378,000,000 | 6,520,000,000 | 6,885,000,000 | 7,161,000,000 | 7,364,000,000 | 7,580,000,000 | 7,812,000,000 | 7,964,000,000 | 8,197,000,000 | 8,624,000,000 |
| Share buybacks | 3,833,000,000 | 48,000,000 | 0.00 | 0.00 |  | 0.00 | 0.00 | 775,000,000 | 209,000,000 | 0.00 | 0.00 |  |
| Assets |  |  | 36,851,000,000 | 42,968,000,000 | 39,801,000,000 | 42,875,000,000 | 44,815,000,000 | 41,290,000,000 | 61,681,000,000 | 65,304,000,000 | 61,784,000,000 | 69,185,000,000 |
| Liabilities |  |  | 47,751,000,000 | 53,198,000,000 | 50,540,000,000 | 52,474,000,000 | 55,446,000,000 | 49,498,000,000 | 67,992,000,000 | 74,750,000,000 | 71,654,000,000 | 77,213,000,000 |
| Stockholders' equity |  |  | -12,688,000,000 | -12,086,000,000 | -12,459,000,000 | -11,577,000,000 | -12,567,000,000 | -10,106,000,000 | -8,957,000,000 | -11,225,000,000 | -11,750,000,000 | -9,994,000,000 |
| Cash and cash equivalents |  |  | 4,239,000,000 | 8,447,000,000 | 6,593,000,000 | 6,861,000,000 | 7,280,000,000 | 4,496,000,000 | 3,207,000,000 | 3,060,000,000 | 4,216,000,000 | 4,872,000,000 |
| Free cash flow |  |  | 6,905,000,000 | 7,364,000,000 | 8,042,000,000 | 9,238,000,000 | 9,210,000,000 | 11,219,000,000 | 9,726,000,000 | 7,883,000,000 | 10,773,000,000 | 10,664,000,000 |

### 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 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Net margin |  |  | 26.11% | 20.99% | 26.70% | 24.11% | 28.08% | 29.00% | 28.49% | 22.21% | 18.63% | 27.92% |
| Operating margin |  |  | 40.86% | 40.28% | 38.40% | 35.33% | 40.66% | 41.32% | 38.56% | 32.85% | 35.38% | 36.64% |
| Return on assets |  |  | 18.91% | 14.05% | 19.88% | 16.76% | 17.98% | 22.06% | 14.67% | 11.96% | 11.42% | 16.40% |
| Current ratio |  |  | 1.07 | 1.35 | 1.13 | 1.09 | 1.10 | 0.92 | 0.72 | 0.75 | 0.88 | 0.96 |

## 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 2026-07-24. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001413329.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 |  |  | 1.34 | reported discrete quarter |
| 2023-Q1 | 2023-03-31 |  |  | 1.28 | reported discrete quarter |
| 2023-Q2 | 2023-06-30 |  |  | 1.01 | reported discrete quarter |
| 2023-Q3 | 2023-09-30 | 9,141,000,000 | 2,054,000,000 | 1.32 | reported discrete quarter |
| 2023-Q4 | 2023-12-31 | 9,047,000,000 | 2,196,000,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2024-Q1 | 2024-03-31 | 8,793,000,000 | 2,148,000,000 | 1.38 | reported discrete quarter |
| 2024-Q2 | 2024-06-30 | 9,468,000,000 | 2,406,000,000 | 1.54 | reported discrete quarter |
| 2024-Q3 | 2024-09-30 | 9,911,000,000 | 3,082,000,000 | 1.97 | reported discrete quarter |
| 2024-Q4 | 2024-12-31 | 9,706,000,000 | -579,000,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2025-Q1 | 2025-03-31 | 9,301,000,000 | 2,690,000,000 | 1.72 | reported discrete quarter |
| 2025-Q2 | 2025-06-30 | 10,140,000,000 | 3,039,000,000 | 1.95 | reported discrete quarter |
| 2025-Q3 | 2025-09-30 | 10,845,000,000 | 3,478,000,000 | 2.23 | reported discrete quarter |
| 2025-Q4 | 2025-12-31 | 10,362,000,000 | 2,141,000,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2026-Q1 | 2026-03-31 | 10,146,000,000 | 2,438,000,000 | 1.56 | reported discrete quarter |
| 2026-Q2 | 2026-06-30 | 11,192,000,000 | 2,817,000,000 | 1.80 | reported discrete quarter |

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

## Business

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

## Risk Factors

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

## Latest quarter (10-Q)

Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1413329/000162828026049493/pm-20260630.htm

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary.
Confidence: high
Filing date: 2026-07-24
Report date: 2026-06-30

Item 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Description of Our Company

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 or use other nicotine-containing consumer products, 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 ZYN nicotine 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, General snus and 20 ZYN nicotine pouch variants 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").

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:

•International Smoke-Free;

•International Combustibles; and

•U.S. (including our wellness business unit, Aspeya).

Our cigarettes are sold in approximately 170 markets, and in many of these markets they hold the number one or number two market share position. We have a wide range of premium, mid-price and low-price brands. Our portfolio is comprised of both international and local brands.

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.

Smoke-free products (also referred to herein as "SFPs") is the term PMI uses to refer to all of its products that provide nicotine without combusting tobacco, such as heat-not-burn, e-vapor, and oral smokeless, and that therefore generate far lower levels of harmful chemicals. As such, these products have the potential to present less risk of harm versus continued smoking.

IQOS, ZYN and VEEV are the leading brands in our SFPs portfolio. As of June 30, 2026, our smoke-free products were available for sale in 109 markets.

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.

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-

41

Table of Contents

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.

Our cost of sales consists primarily of: tobacco leaf, non-tobacco raw materials, labor and manufacturing costs; shipping and handling costs; and the cost of devices produced by third-party electronics manufacturing service providers. Estimated costs associated with device warranty programs are generally provided for in cost of sales in the period the related revenues are recognized.

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.

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.

Executive Summary

The following executive summary provides the business update and significant highlights from the "Discussion and Analysis" that follows.

Consolidated Operating Results for the Six Months Ended June 30, 2026

•Net Revenues - Net revenues of $21.3 billion for the six months ended June 30, 2026, increased by $1.9 billion, or 9.8%, 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 year-to-date results):

For the six months ended June 30, 2026, net revenues increased by 9.8%. Net revenues, excluding currency and acquisitions/divestitures, increased by 5.3%, mainly reflecting: a favorable pricing variance mainly driven by international combustibles; partly offset by unfavorable volume/mix, mainly driven by lower international combustibles and U.S. volumes, notwithstanding higher international smoke-free volumes.

42

Table of Contents

Net revenues by product category for the six months ended June 30, 2026 and 2025 are shown below:

Note: Sum of product categories might not foot to total PMI due to rounding

•Diluted Earnings Per Share - The changes in our reported diluted earnings per share (“diluted EPS”) for the six months ended June 30, 2026, from the comparable 2025 amounts, were as follows:

[[GREPCENT_TABLE]]
[["","","Diluted EPS","","% Change"],["For the six months ended June 30, 2025","","$","3.67"],["2025 Restructuring charges","","0.13"],["2025 Impairment of goodwill","","0.03"],["2025 Amortization of intangibles","","0.24"],["2025 Fair value adjustment for equity security investments","","(0.26)"],["2025 Income tax impact associated with Swedish Match AB financing","","(0.24)"],["2025 Tax items","","0.03"],["Subtotal of 2025 items","","(0.07)"],["2026 Restructuring charges","","(0.01)"],["2026 Impairment related to RBH equity investment","","(0.33)"],["2026 Egypt sales tax settlement adjustment","","0.01"],["2026 Amortization of intangibles","","(0.25)"],["2026 Fair value adjustment for equity security investments","","(0.16)"],["2026 Income tax impact associated with Swedish Match AB financing","","(0.06)"],["Subtotal of 2026 items","","(0.80)"],["Currency","","0.22"],["Interest","","0.02"],["Change in tax rate","","0.11"],["Operations","","0.21"],["For the six months ended June 30, 2026","","$","3.36","","","(8.4)","%"]]
[[/GREPCENT_TABLE]]

Restructuring charges – During the six months ended June 30, 2025, we recorded pre-tax restructuring charges of $243 million (representing $200 million net of income tax and a diluted EPS charge of $0.13 per share), related to the end of combustible tobacco production in two of our factories in Germany. During the six months ended June 30, 2026, we recorded pre-tax restructuring charges of $30 million (representing $24 million net 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.

43

Table of Contents

Impairment of goodwill – During the second quarter of 2025, after the completion of our annual review of goodwill, it was determined that the estimated fair value of a business, which was a separate reporting unit in 2025, related to the consumer accessories products acquired as part of the Swedish Match acquisition in 2022 was lower than its carrying value. Consequently, PMI recorded a goodwill impairment charge of $41 million (representing a $0.03 per share decrease in diluted EPS). For further details, see Note 5. Goodwill and Other Intangible Assets, net.

Amortization of intangibles – During the six months ended June 30, 2025 and 2026, we recorded amortization of intangibles expense of $496 million (representing $385 million net of income tax or $0.24 per share decrease in diluted EPS) and $503 million (representing $392 million net of income tax or $0.25 per share decrease in diluted EPS), respectively.

Impairment related to RBH equity investment – In May 2026, pursuant to its obligation under its court-approved plan of compromise and arrangement (the "Plan"), RBH provided an annual business plan to its Plan Administrator containing updated five-year financial projections reflecting current industry dynamics. As a result, PMI determined that the estimated fair value of its investment in RBH was lower than its carrying value and recorded a non-cash impairment charge of $511 million (representing $0.33 per share decrease in diluted EPS) in the second quarter of 2026. For further details, see Note 13. Related Parties - Equity Investments and Other.

Egypt sales tax settlement adjustment – In the third quarter of 2024, following a ruling issued by the Higher Administrative Court in Egypt and subsequent evaluation of available remedies at that time, we concluded that an adverse outcome was probable and recorded a pre-tax charge in 2024 of $45 million (representing 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. Pursuant to tax amnesty legislation enacted in Egypt in December 2024, PMI submitted review requests with the Dispute Resolution Committee, which issued settlement recommendations subject to court approval. In May 2026, court approval was obtained for the settlement covering the 2016 year, which then became effective. As a result, PMI recorded a favorable sales tax settlement adjustment during the second quarter of 2026 of $18 million net of income tax (representing an increase of $0.01 to diluted EPS).

Fair value adjustment for equity security investments – During the six months ended June 30, 2025 and 2026, we recorded fair value adjustments for our equity security investments in India and Sri Lanka of $410 million gain after tax (or $0.26 per share increase in diluted EPS) and $240 million loss after tax (or $0.16 per

[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/1413329/000162828026005939/pm-20251231.htm
Complete FY 2025 MD&A: /company/PM/mda/fy2025/

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary.
Confidence: high
Filing date: 2026-02-06
Report date: 2025-12-31

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

The following discussion should be read in conjunction with the other sections of this Annual Report on Form 10-K, including the consolidated financial statements and related notes contained in Item 8, and the discussion of risks and cautionary factors that may affect future results in Item 1A. Risk Factors.

Description of Our Company

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 ZYN nicotine 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 7.

Following the sale of Vectura Group Ltd. on December 31, 2024, we updated our segment reporting in January 2025 by including the ongoing Wellness results (previously referred to as Wellness & Healthcare) 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”).

As of December 31, 2025, our four geographical segments were as follows:

•Europe Region, including our Wellness business;

•South and Southeast Asia, Commonwealth of Independent States, Middle East and Africa Region ("SSEA, CIS & MEA");

•East Asia, Australia, and PMI Global Travel Retail (“EA, AU & PMI GTR”); and

•Americas Region.

As communicated in the fourth quarter of 2025, with our smoke-free business now operating at scale across our regions, including substantial growth from our U.S. business, we have implemented 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 Jacek Olczak, Group CEO of PMI. This change was implemented effective January 1, 2026, and as a result we realigned our reportable segments accordingly. The four geographic segments have been replaced with three new reportable segments: International Smoke-Free, International Combustibles, and U.S. As of the first quarter of 2026, our reporting will reflect these changes.

Our cigarettes are sold in approximately 170 markets, and in many of these markets they hold the number one or number two market share position. We have a wide range of premium, mid-price and low-price brands. Our portfolio is comprised of both international and local brands.

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.

24

Smoke-free products (also referred to herein as "SFPs") is the term PMI uses to refer to all of its products that provide nicotine without combusting tobacco, such as heat-not-burn, e-vapor, and oral smokeless, and that therefore generate far lower levels of harmful chemicals. As such, these products have the potential to present less risk of harm versus continued smoking.

IQOS, ZYN and VEEV are the leading brands in our SFPs portfolio. As of December 31, 2025, our smoke-free products were available for sale in 106 markets.

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.

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).

Our cost of sales consists primarily of: tobacco leaf, non-tobacco raw materials, labor and manufacturing costs; shipping and handling costs; and the cost of devices produced by third-party electronics manufacturing service providers. Estimated costs associated with device warranty programs are generally provided for in cost of sales in the period the related revenues are recognized.

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.

25

Executive Summary

The following executive summary provides the business update and significant highlights from the Discussion and Analysis that follows.

Consolidated Operating Results

•Net Revenues – Net revenues of $40.6 billion for the year ended December 31, 2025, increased by $2.8 billion, or 7.3%, 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):

Net revenues increased by 7.3%. Net revenues, excluding currency and acquisitions/divestitures, increased by 6.5%, 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 volumes for cigarettes.

Net revenues by product category for the years ended December 31, 2025 and 2024, are shown below:

26

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

[[GREPCENT_TABLE]]
[["","Diluted EPS","% Change"],["For the year ended December 31, 2024","$","4.52"],["2024 Restructuring charges","0.10"],["2024 Impairment of other intangibles","0.01"],["2024 Fair value adjustment for equity security investments","(0.27)"],["2024 Impairment related to RBH equity investment","1.49"],["2024 Amortization of intangibles","0.40"],["2024 Loss on sale of Vectura Group","0.13"],["2024 Egypt sales tax charge","0.03"],["2024 Megapolis localization tax impact","0.05"],["2024 Income tax impact associated with Swedish Match AB financing","0.14"],["2024 Tax items","(0.03)"],["Subtotal of 2024 items","2.05"],["2025 Restructuring charges","(0.14)"],["2025 Impairment of goodwill","(0.03)"],["2025 Fair value adjustment for equity security investments","0.18"],["2025 Amortization of intangibles","(0.50)"],["2025 Germany excise tax classification litigation charge","(0.10)"],["2025 RBH (Canada) Plan implementation, including dividend income, net","0.10"],["2025 Impairment of Wellness business related equity investment","(0.09)"],["2025 Loss on expected sale of consumer accessories and other businesses","(0.06)"],["2025 Income tax impact associated with Swedish Match AB financing","0.25"],["2025 Tax items","0.11"],["Subtotal of 2025 items","(0.28)"],["Currency","0.04"],["Interest","0.09"],["Change in tax rate","(0.01)"],["Operations","0.85"],["For the year ended December 31, 2025","$","7.26","","60.6","%"]]
[[/GREPCENT_TABLE]]

Restructuring charges – During 2024, we recorded pre-tax restructuring charges of $180 million (representing $150 million net of income tax and a diluted EPS charge of $0.10 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 2025, we recorded pre-tax restructuring charges of $241 million (representing $222 million net of income tax and a diluted EPS charge of $0.14 per share), related to the end of combustible tobacco production in two of our factories in Germany. For further details, see Item 8, Note 18. Restructuring Activities.

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 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, see Item 8, Note 4. Goodwill and Other Intangible Assets, net.

27

Fair value adjustment for equity security investments – During 2024 and 2025, we recorded fair value adjustments for our equity security investments in India and Sri Lanka of $418 million after tax gain (or $0.27 per share increase in diluted EPS) and $289 million after tax gain (or $0.18 per share increase in diluted EPS), respectively. For further details, see Item 8, Note 5. Related Parties - Equity Investments and Other.

Impairment related to the RBH equity investment – On October 17, 2024, the court-appointed mediator and monitor in the Companies' Creditors Arrangement Act ("CCAA") proceedings filed a proposed plan of compromise and arrangement (“Proposed Plan”) setting forth, among other things, certain terms of a proposed comprehensive resolution of Canadian tobacco claims and related litigation. Under the resolution contemplated by the Proposed Plan, RBH, Imperial Tobacco Canada Limited ("ITL") and JTI Macdonald Corp ("JTIM") would pay an aggregate global settlement amount of CAD 32.5 billion (approximately $23.7 billion as of December 31, 2025). A significant determinativ

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

Read the full FY 2025 MD&A: /company/PM/mda/fy2025/
All MD&A years: /company/PM/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/PM/mda/fy2024/): filed 2025-02-06; accession 0001413329-25-000013 (https://www.sec.gov/Archives/edgar/data/1413329/000141332925000013/pm-20241231.htm)
- [FY 2023 MD&A](/company/PM/mda/fy2023/): filed 2024-02-08; accession 0001413329-24-000013 (https://www.sec.gov/Archives/edgar/data/1413329/000141332924000013/pm-20231231.htm)
- [FY 2022 MD&A](/company/PM/mda/fy2022/): filed 2023-02-10; accession 0001413329-23-000025 (https://www.sec.gov/Archives/edgar/data/1413329/000141332923000025/pm-20221231.htm)
- [FY 2021 MD&A](/company/PM/mda/fy2021/): filed 2022-02-11; accession 0001413329-22-000011 (https://www.sec.gov/Archives/edgar/data/1413329/000141332922000011/pm-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/PM.md · JSON record: /company/PM.json · verified financials: /company/PM/financials.json / /company/PM/financials.csv · machine TOC for the whole site: /llms.txt