SEC EDGAR · 10-Q

10-Q – 2026-04-30 – mo-20260331.htm

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Omsättning

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 54
Net revenues $ 5,428 $ 5,259 | Cost of sales 1,252 1,270 | Excise taxes on products 670 740
When used in these notes, 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. | ▪ Background: At March 31, 2026, our wholly owned subsidiaries included Philip Morris USA Inc. (“PM USA”), which is engaged in the manufacture and sale of cigarettes; John Middleton Co. (“Middleton”), which is engaged in the manufacture and sale of machine-made large cigars and is a wholly owned subsidiary of PM USA; UST LLC (“UST”), which, through its wholly owned subsidiary U.S. Smokeless Tobacco Company LLC (“USSTC”), is engaged in the manufacture and sale of moist smokeless tobacco (“MST”) p | At March 31, 2026, we owned a 75 % economic interest in Horizon Innovations LLC (“Horizon”), a joint venture with JTI (US) Holding, Inc. (“JTIUH”), a subsidiary of Japan Tobacco Inc., which owned the remaining 25 % economic interest. Horizon is responsible for the U.S. marketing and commercialization of heated tobacco stick products owned by either party. At March 31, 2026, Horizon had no products in the U.S. marketplace.
sale of NJOY ACE in the United States. In January 2025, the U.S. International Trade Commission (“ITC”) issued an exclusion order and cease-and-desist orders prohibiting the importation and sale of NJOY ACE in the United States, which became effective on March 31, 2025. As a result, in connection with the preparation of our condensed consolidated financial statements for the period ended March 31, 2025, we concluded a triggering event had occurred and performed an interim impairment assessment. | We used an income approach to estimate the fair value of the e-vapor reporting unit. Due to the presence of uncertainties, our cash flows were based on a range of scenarios that consider certain potential regulatory and market outcomes, including the projected impact of enforcement on illicit flavored disposable e-vapor products. In performing the discounted cash flow analyses, we made various judgments, estimates and assumptions, the most significant of which were volume, price, revenue, income
salaried employees that cannot be funded under Internal Revenue Service regulations. We made employer contributions of $ 4 million to our pension plans and did no t make any contributions to our postretirement plans during the three months ended March 31, 2026. Currently, we anticipate making additional employer contributions in 2026 to our pension and postretirement plans of up to approximately $ 56 million and $ 100 million, respectively. However, the foregoing estimates of 2026 contributions
(1) Represents charges related to State Settlement Agreements included in cost of sales. For additional information, see Health Care Cost Recovery Litigation in Note 12. Contingencies . | (2) Other segment items includes manufacturing, marketing, administration and research costs, FDA user fees and other costs.
Health Care Cost Recovery Litigation | Overview: In the health care cost recovery litigation, governmental entities seek reimbursement of health care cost expenditures allegedly caused by tobacco products and, in some cases, of future expenditures and damages. Relief sought by some but not all plaintiffs includes punitive damages, multiple damages and other statutory damages and penalties, injunctions prohibiting alleged marketing and sales to minors, disclosure of research, disgorgement of profits, funding of anti-smoking programs, | Although there have been some decisions to the contrary, most judicial decisions in the United States have dismissed all or most health care cost recovery claims against cigarette manufacturers. Nine federal circuit courts of appeals and eight state appellate courts, relying primarily on grounds that plaintiffs’ claims were too remote, have ordered or affirmed dismissals of health care cost recovery actions. The U.S. Supreme Court has refused to consider plaintiffs’ appeals from the cases decide
Since the beginning of 2008, the Canadian Provinces of British Columbia, New Brunswick, Newfoundland and Labrador, Quebec, Alberta, Manitoba, Saskatchewan, Prince Edward Island and Nova Scotia have brought health care reimbursement claims against cigarette manufacturers. PM USA is named as a defendant in the British Columbia and Quebec cases, while both Altria and PM USA are named as defendants in the New Brunswick, Newfoundland and Labrador, Alberta, Manitoba, Saskatchewan, Prince Edward Island | Settlements of Health Care Cost Recovery Litigation: In November 1998, PM USA and certain other tobacco product manufacturers entered into the Master Settlement Agreement (the “MSA”) with 46 states, the District of Columbia and certain United States territories to settle asserted and unasserted health care cost recovery and other claims. PM USA and certain other tobacco product manufacturers had previously entered into agreements to settle similar claims brought by the States of Mississippi, Flo | Non-Participating Manufacturer (“NPM”) Adjustment Disputes: The “NPM Adjustment” is a reduction in MSA payments made by the OPMs and those manufacturers that are subsequent signatories to the MSA (collectively, the “participating manufacturers” or “PMs”) that applies if the PMs collectively lose at least a specified level of market share to non-participating manufacturers since 1997, subject to certain conditions and defenses. The applicability of this reduction has been subject to certain dispu

EBITDA

Pricing for interest and fees under our Credit Agreement may be modified in the event of a change in the rating of our long-term senior unsecured debt. We expect interest rates on borrowings under our Credit Agreement to be based on the Term Secured Overnight Financing Rate plus a percentage based on the higher of the ratings of our long-term senior unsecured debt from Moody’s Investors Service, Inc. and Standard & Poor’s Financial Services LLC. The applicable percentage for borrowings under our | Our Credit Agreement includes various covenants, one of which requires us to maintain a ratio of Consolidated EBITDA (earnings before interest, taxes, depreciation and amortization) to Consolidated Interest Expense of not less than 4.0 to 1.0, calculated for the four most recent fiscal quarters. At March 31, 2026, we were in compliance with our covenants in our Credit Agreement. The terms “Consolidated EBITDA” and “Consolidated Interest Expense,” each as defined in our Credit Agreement, include | PM USA guarantees any borrowings under our Credit Agreement and any amounts outstanding under our commercial paper program.
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 | 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
presented, if applicable, are included in our adjusted financial measures. In addition, our management reviews the ratio of debt-to-Consolidated EBITDA, which we use as a factor to determine our ability to access the capital markets and make investments in pursuit of our Vision. Consolidated EBITDA is calculated in accordance with our Credit Agreement (defined below in Liquidity and Capital Resources ) and includes certain adjustments. Our management does not view any of these special items to b | Our management believes that the foregoing financial measures provide useful additional insight into underlying business trends and results, and provide a more meaningful comparison of year-over-year results. Our management uses these financial measures and regularly provides these to our chief operating decision maker (“CODM”) for planning, forecasting and evaluating business and financial performance, including allocating capital and other resources and evaluating results relative to employee
At March 31, 2026, our debt-to-Consolidated net earnings and debt-to-Consolidated EBITDA ratios were calculated as follows:
Depreciation and amortization 251 | EBITDA 11,891 | (Income) loss from investments in equity securities and noncontrolling interest, net (525)
Consolidated EBITDA $ 12,837
Debt / Consolidated net earnings 3.1 | Debt / Consolidated EBITDA 1.9

Rörelseresultat

Impairment of goodwill — 873 | Operating income 2,956 1,788 | Interest and other debt expense, net 258 262
Altria’s Chief Executive Officer is our chief operating decision maker (“CODM”). Our measure of segment profitability is segment operating companies income (loss) (“OCI”), which is defined as operating income before general corporate expenses and amortization of intangibles. Our CODM uses OCI for planning, forecasting and evaluating business and financial performance of the segments, including allocating capital and other resources to our segments and evaluating results relative to employee comp | Segment data were as follows:
General corporate expenses ( 53 ) ( 63 ) | Operating income 2,956 1,788 | Interest and other debt expense, net 258 262
Other Disputes under the State Settlement Agreements: The payment obligations of the tobacco product manufacturers that are parties to the State Settlement Agreements, as well as the allocations of any NPM Adjustments and related settlements, have been and may continue to be affected by R.J. Reynolds’s acquisition of Lorillard Tobacco Company in 2015 and its related sale of certain cigarette brands to ITG (the “ITG transferred brands”). PM USA continues to dispute how the ITG transferred brands | In December 2019, the State of Mississippi filed a motion in Mississippi state court seeking to enforce the Mississippi State Settlement Agreement against PM USA, R.J. Reynolds and ITG concerning the tax rates used in the annual calculation of the net operating profit adjustment payments starting in 2018. In September 2024, PM USA and the State of Mississippi settled their dispute over the profit adjustment payments. Pursuant to the settlement, PM USA paid $ 7 million to the State of Mississippi | In May 2023, PM USA and R.J. Reynolds filed a motion in the U.S. District Court for the Eastern District of Texas seeking to enforce the Texas State Settlement Agreement against the State of Texas concerning the same tax rate issue raised by the State of Mississippi. The State of Texas filed a cross-motion to enforce, and the court found in favor of the State of Texas. In March 2025, the court issued a final order in the matter, finding that PM USA owes $ 31 million to the State of Texas, plus p
Excise taxes on products $ 670 $ 740 | Operating Income: | OCI:
General corporate expenses (53) (63) | Operating income $ 2,956 $ 1,788
As discussed further in Note 9. Segment Reporting (“Note 9”), our CODM reviews OCI, which is defined as operating income before general corporate expenses and amortization of intangibles, to evaluate the performance of, and allocate resources to, our segments. Our management believes it is appropriate to disclose this measure to help investors analyze our business performance and trends. | 32
Marketing, administration and research costs decreased $38 million (6.5%), due primarily to lower tobacco and health and certain other litigation items, lower amortization of intangibles, lower general corporate expenses and lower costs related to our Optimize & Accelerate initiative (“Initiative”), partially offset by higher spending in our smokeable products and oral tobacco products segments. | Operating income increased $1,168 million (65.3%), due primarily to higher OCI (which includes the impact of a non-cash impairment of the e-vapor reporting unit goodwill in 2025). | (Income) losses from investments in equity securities were favorable $15 million (10.5%), due primarily to favorable results from our investment in ABI.

Periodens resultat

In September 2025, NJOY, ALCS, and AGDC filed an action against JUUL with the ITC alleging patent infringement and seeking a ban on the importation and sale of the same JUUL products in the United States. A hearing before the ALJ is scheduled for September 2026, and we expect an initial determination from the ALJ in December 2026, subject to the ALJ’s ability to grant himself an extension. The ALJ’s recommendation will be reviewed by the ITC, and we expect the ITC’s final determination in April | R.J. Reynolds Patent Litigation: ALCS filed a lawsuit against R.J. Reynolds in the U.S. District Court for the Middle District of North Carolina alleging patent infringement by R.J. Reynolds’ e-vapor products. In September 2022, a jury awarded ALCS $ 95 million in damages for past infringement, plus supplemental damages and interest. In January 2023, the court ordered R.J. Reynolds to pay ALCS a 5.25 % royalty on future sales of its infringing product resulting in positive net income through the | In July 2024, R.J. Reynolds moved the district court to vacate the judgment, including the damages awards and ongoing royalties, on the grounds that R.J. Reynolds obtained a sublicense to the asserted patents from JUUL in December 2023. In December 2024, the district court denied the motion as to the damages award and royalties due through December 2023. The district court also found that additional proceedings were warranted on the part of the motion regarding royalties after R.J. Reynolds obta

Resultat per aktie

Per share data: | Basic and diluted earnings per share $ 1.30 $ 0.63
Note 7. Earnings per Share | We calculated basic and diluted earnings per share (“EPS”) using the following:
Less: Distributed and undistributed earnings attributable to share-based awards ( 5 ) ( 5 ) | Earnings for basic and diluted EPS $ 2,178 $ 1,072
Weighted-average shares for basic and diluted EPS 1,673 1,690
Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents are participating securities and, therefore, are included in our EPS calculation pursuant to the two-class method.
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 | 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
Consolidated Results of Operations for the Three Months Ended March 31, 2026 | The changes in net earnings and diluted EPS for the three months ended March 31, 2026, from the three months ended March 31, 2025, were due primarily to the following:
(in millions, except per share data) Net Earnings Diluted EPS | For the three months ended March 31, 2025

Kassaflöde

sale of NJOY ACE in the United States. In January 2025, the U.S. International Trade Commission (“ITC”) issued an exclusion order and cease-and-desist orders prohibiting the importation and sale of NJOY ACE in the United States, which became effective on March 31, 2025. As a result, in connection with the preparation of our condensed consolidated financial statements for the period ended March 31, 2025, we concluded a triggering event had occurred and performed an interim impairment assessment. | We used an income approach to estimate the fair value of the e-vapor reporting unit. Due to the presence of uncertainties, our cash flows were based on a range of scenarios that consider certain potential regulatory and market outcomes, including the projected impact of enforcement on illicit flavored disposable e-vapor products. In performing the discounted cash flow analyses, we made various judgments, estimates and assumptions, the most significant of which were volume, price, revenue, income
ASU No. 2025-07 Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract The guidance refines the scope of Topic 815 by excluding from derivative accounting non-exchange trading contracts that have underlyings based on operations or activities specific to one of the parties to the contract with certain exceptions and clarifies the app | ASU No. 2025-09 Derivatives and Hedging (Topic 815): Hedge Accounting Improvements The guidance includes expanding eligibility for cash flow hedges of groups of forecasted transactions, introducing a model for hedging forecasted interest payments on “choose-your-rate” debt instruments, permitting designation of variable price components in forecasted purchases or sales of nonfinancial assets and clarifying guidance for net investment hedges and dual hedge strategies. The guidance is effective fo | ASU No. 2025-11 Interim Reporting (Topic 270): Narrow-Scope Improvements The guidance clarifies interim disclosure requirements, provides a comprehensive list of disclosures required by GAAP and includes a disclosure principle for events since the last annual reporting period to enhance consistency in interim reporting. The guidance is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. We are in the process of evaluating the impact of this

Likvida medel

Assets | Cash and cash equivalents $ 3,531 $ 4,474 | Receivables 284 263
March 31, 2026 December 31, 2025 | Cash and cash equivalents $ 3,531 $ 4,474 | Restricted cash included in other current assets 5 7
We are a holding company that is primarily dependent on the capital resources of our subsidiaries to satisfy our liquidity requirements. Our access to the operating cash flows of our subsidiaries consists of cash received from the payment of dividends and distributions, and the payment of interest on intercompany loans. At March 31, 2026, our significant subsidiaries were not limited by contractual obligations in their ability to pay cash dividends or make other distributions with respect to the | At March 31, 2026, we had $3.5 billion of cash and cash equivalents. In addition to having access to the operating cash flows of our subsidiaries, our capital resources include access to credit markets in the form of commercial paper, availability under our $3.0 billion senior unsecured 5-year revolving credit agreement (“Credit Agreement”), which we use for general corporate purposes, and access to credit markets through the issuance of long-term senior unsecured notes. For additional informati | In addition to funding current operations, we primarily use our net cash from operating activities for payment of dividends, share repurchases under our share repurchase programs, repayment of debt, acquisitions of or investments in businesses and assets and capital expenditures.
In addition to funding current operations, we primarily use our net cash from operating activities for payment of dividends, share repurchases under our share repurchase programs, repayment of debt, acquisitions of or investments in businesses and assets and capital expenditures. | We believe our cash and cash equivalents balance, along with our future cash flows from operations, capacity for borrowings under our Credit Agreement and access to credit and capital markets, provide sufficient liquidity to meet the needs of our business operations and to satisfy our projected cash requirements for the foreseeable future, including the next 12 months. | Capital Markets and Other Matters

Nettoskuld

Other, net 65 110 | Net cash provided by (used in) operating activities 2,324 2,720 | Cash Provided by (Used in) Investing Activities
Other, net ( 16 ) ( 5 ) | Net cash provided by (used in) investing activities ( 109 ) ( 43 ) | Cash Provided by (Used in) Financing Activities
Other, net ( 28 ) ( 26 ) | Net cash provided by (used in) financing activities ( 3,157 ) ( 1,085 ) | Cash, cash equivalents and restricted cash: (1)
At March 31, 2026, we had $3.5 billion of cash and cash equivalents. In addition to having access to the operating cash flows of our subsidiaries, our capital resources include access to credit markets in the form of commercial paper, availability under our $3.0 billion senior unsecured 5-year revolving credit agreement (“Credit Agreement”), which we use for general corporate purposes, and access to credit markets through the issuance of long-term senior unsecured notes. For additional informati | In addition to funding current operations, we primarily use our net cash from operating activities for payment of dividends, share repurchases under our share repurchase programs, repayment of debt, acquisitions of or investments in businesses and assets and capital expenditures. | We believe our cash and cash equivalents balance, along with our future cash flows from operations, capacity for borrowings under our Credit Agreement and access to credit and capital markets, provide sufficient liquidity to meet the needs of our business operations and to satisfy our projected cash requirements for the foreseeable future, including the next 12 months.
Cash Provided by/Used in Operating Activities | During the first three months of 2026, net cash provided by operating activities was $2,324 million compared with $2,720 million during the first three months of 2025. This decrease was due primarily to payments for certain transferable income tax credits in 2026 and higher payments for interest on long-term debt, partially offset by higher net revenues in our smokeable products segment. | We had a working capital deficit at March 31, 2026 and December 31, 2025, and believe we have the ability to fund working capital deficits with cash provided by operating activities, borrowings under our Credit Agreement and access to the credit and capital markets.
Cash Provided by/Used in Investing Activities | During the first three months of 2026, net cash used in investing activities was $109 million compared with $43 million during the first three months of 2025. This increase was due primarily to investments in our manufacturing capabilities and innovative products. | Cash Provided by/Used in Financing Activities
Cash Provided by/Used in Financing Activities | During the first three months of 2026, net cash used in financing activities was $3,157 million compared with $1,085 million during the first three months of 2025. This increase was due to repayments of long-term debt in 2026 and issuances of long-term debt in 2025. | New Accounting Guidance Not Yet Adopted

Eget kapital

Condensed Consolidated Statements of Stockholders’ Equity (Deficit) for the | Three Months Ended March 31, 2026 and 2025
Contingencies (Note 12) | Stockholders’ Equity (Deficit) | Common stock, par value $0.33 1/3 per share
( 43,449 ) ( 43,183 ) | Total stockholders’ equity (deficit) attributable to Altria ( 3,211 ) ( 3,502 ) | Noncontrolling interest 50 50
Noncontrolling interest 50 50 | Total stockholders’ equity (deficit) ( 3,161 ) ( 3,452 ) | Total Liabilities and Stockholders’ Equity (Deficit) $ 34,584 $ 35,017
Total stockholders’ equity (deficit) ( 3,161 ) ( 3,452 ) | Total Liabilities and Stockholders’ Equity (Deficit) $ 34,584 $ 35,017
Altria Group, Inc. and Subsidiaries | Condensed Consolidated Statements of Stockholders’ Equity (Deficit) | for the Three Months Ended March 31, 2026 and 2025
101 The following financial statements from our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, formatted in Inline XBRL: (i) Condensed Consolidated Statements of Cash Flows, (ii) Condensed Consolidated Statements of Earnings, (iii) Condensed Consolidated Statements of Comprehensive Earnings, (iv) Condensed Consolidated Balance Sheets, (v) Condensed Consolidated Statements of Stockholders’ Equity (Deficit), and (vi) Notes to Condensed Consolidated Financial Statements, tagged

Antal aktier

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ | At April 22, 2026, there were 1,669,891,235 shares outstanding of the registrant’s common stock, par value $0.33 1/3 per share.
2025 | Total number of shares repurchased 4.5 5.7 | Aggregate cost of shares repurchased $ 280 $ 326
(35) (0.02) | Fewer shares outstanding — 0.01 | Change in tax rate 11 0.01
For a discussion of special items and other business drivers affecting the comparability of statements of earnings amounts and reconciliations of adjusted 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. | ▪ Operations: The increase of $118 million in operations (which excludes the impact of special items shown in the table above) was due primarily to higher OCI.
Reported net earnings of $2,183 million increased $1,106 million (100%+), due primarily to higher operating income. Reported basic and diluted EPS of $1.30, each increased by 100%+, due primarily to higher reported net earnings. | Adjusted net earnings of $2,218 million increased $129 million (6.2%), due primarily to higher OCI. Adjusted diluted EPS of $1.32 increased by 7.3%, due primarily to higher adjusted net earnings and fewer shares outstanding.
Equity and Dividends | During the first three months of 2026 and 2025, we paid dividends of $1,780 million and $1,730 million, respectively, an increase of 2.9%, reflecting a higher dividend rate, partially offset by fewer shares outstanding as a result of shares we repurchased under our share | 49
Period Total Number of Shares Purchased (1) | Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs
Period Total Number of Shares Purchased (1) | Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs | January 1-31, 2026 2,184,939 $ 59.54 2,184,939 $ 869,907,063

Antal anställda

salaried employees that cannot be funded under Internal Revenue Service regulations. We made employer contributions of $ 4 million to our pension plans and did no t make any contributions to our postretirement plans during the three months ended March 31, 2026. Currently, we anticipate making additional employer contributions in 2026 to our pension and postretirement plans of up to approximately $ 56 million and $ 100 million, respectively. However, the foregoing estimates of 2026 contributions
(1) The total number of shares purchased includes (a) shares purchased under the January 2025 share repurchase program and (b) shares withheld by Altria in an amount equal to the statutory withholding taxes for vested stock-based awards previously granted to eligible employees (which totaled 388,070 in February and 12,376 in March).

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026
or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                     to                    
Commission File Number 1-08940
Altria Group, Inc.
(Exact name of registrant as specified in its charter)

Virginia 13-3260245
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)

6601 West Broad Street Richmond Virginia 23230
(Address of principal executive offices) (Zip Code)

804 - 274-2200  
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:

               Title of each class               
Trading Symbols Name of each exchange on which registered
Common Stock, $0.33 1/3 par value MO New York Stock Exchange
2.200% Notes due 2027 MO27 New York Stock Exchange
3.125% Notes due 2031 MO31 New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes    þ      No   ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes    þ     No   ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer   þ Accelerated filer ☐

Non-accelerated filer   ☐ Smaller reporting company ☐
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes   ☐   No    þ
At April 22, 2026, there were 1,669,891,235 shares outstanding of the registrant’s common stock, par value $0.33 1/3 per share.

Table of Contents

ALTRIA GROUP, INC.
TABLE OF CONTENTS
 

    Page No.
PART I - FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

Condensed Consolidated Balance Sheets at
March 31, 2026 and December 31, 2025
3

Condensed Consolidated Statements of Earnings for the Three Months Ended March 31, 2026 and 2025
5

Condensed Consolidated Statements of Comprehensive Earnings for the
Three Months Ended March 31, 2026 and 2025
6

Condensed Consolidated Statements of Stockholders’ Equity (Deficit) for the
Three Months Ended March 31, 2026 and 2025
7

Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2026 and 2025
8

Notes to Condensed Consolidated Financial Statements
9

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
28

Item 3. Quantitative and Qualitative Disclosures About Market Risk
53

Item 4. Controls and Procedures
53

PART II - OTHER INFORMATION

Item 1. Legal Proceedings
54

Item 1A. Risk Factors
54

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
54

Item 5. Other Information
54

Item 6. Exhibits
55

Signature Signature
56

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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Altria Group, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in millions of dollars)
(Unaudited)
______________________________
 

March 31, 2026 December 31, 2025
Assets
Cash and cash equivalents $ 3,531   $ 4,474  
Receivables 284   263  
Inventories:
Leaf tobacco 525   531  
Other raw materials 265   245  
Work in process 24   13  
Finished product 332   281  
1,146   1,070  

Other current assets 241   125  
Total current assets 5,202   5,932  

Property, plant and equipment, at cost 4,707   4,672  
Less accumulated depreciation 2,977   2,962  
1,730   1,710  

Goodwill 5,787   5,787  
Other intangible assets, net 11,873   11,876  
Investments in equity securities 8,947   8,617  
Other assets 1,045   1,095  
Total Assets $ 34,584   $ 35,017  

 
See notes to condensed consolidated financial statements.
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Altria Group, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (Continued)
(in millions of dollars, except share and per share data)
(Unaudited)
________________________________________________
 

March 31, 2026 December 31, 2025
Liabilities
Current portion of long-term debt $ 542   $ 1,569  
Accounts payable 701   750  
Accrued liabilities:
Marketing 895   928  
Settlement charges 2,837   2,178  
Other 1,653   1,947  
Dividends payable 1,779   1,782  
Total current liabilities 8,407   9,154  

Long-term debt 24,060   24,140  
Deferred income taxes 3,464   3,370  
Accrued pension costs 120   122  
Accrued postretirement health care costs 935   939  
Other liabilities 759   744  
Total liabilities 37,745   38,469  
Contingencies (Note 12)
Stockholders’ Equity (Deficit)
Common stock, par value $0.33 1/3 per share
( 2,805,961,317 shares issued)
935   935  
Additional paid-in capital 5,894   5,921  
Earnings reinvested in the business 35,859   35,452  
Accumulated other comprehensive losses ( 2,450 ) ( 2,627 )
Cost of repurchased stock ( 1,135,384,913 shares at March 31, 2026 and 1,131,643,020 shares at December 31, 2025)
( 43,449 ) ( 43,183 )
Total stockholders’ equity (deficit) attributable to Altria ( 3,211 ) ( 3,502 )
Noncontrolling interest 50   50  
Total stockholders’ equity (deficit) ( 3,161 ) ( 3,452 )
Total Liabilities and Stockholders’ Equity (Deficit) $ 34,584   $ 35,017  

See notes to condensed consolidated financial statements.

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Altria Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Earnings
(in millions of dollars, except per share data)
(Unaudited)
_____________________________________  

For the Three Months Ended March 31, 2026 2025
Net revenues $ 5,428   $ 5,259  
Cost of sales 1,252   1,270  
Excise taxes on products 670   740  
Gross profit 3,506   3,249  
Marketing, administration and research costs 550   588  

Impairment of goodwill —   873  
Operating income 2,956   1,788  
Interest and other debt expense, net 258   262  
Net periodic benefit income, excluding service cost ( 3 ) ( 14 )
(Income) losses from investments in equity securities ( 158 ) ( 143 )

Earnings before income taxes 2,859   1,683  
Provision for income taxes 676   606  

Net earnings $ 2,183   $ 1,077  
Per share data:
Basic and diluted earnings per share $ 1.30   $ 0.63  

See notes to condensed consolidated financial statements.

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Altria Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Earnings
(in millions of dollars)
(Unaudited)
_____________________

For the Three Months Ended March 31, 2026 2025
Net earnings $ 2,183   $ 1,077  
Other comprehensive earnings (losses), net of deferred income taxes:
Benefit plans 10   1  
ABI 163   ( 269 )
Currency translation adjustments 4   ( 23 )
Other comprehensive earnings (losses), net of deferred income taxes 177   ( 291 )
Comprehensive earnings $ 2,360   $ 786  

See notes to condensed consolidated financial statements.
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Altria Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Stockholders’ Equity (Deficit)
for the Three Months Ended March 31, 2026 and 2025
(in millions of dollars, except per share data)
(Unaudited)
_______________________________________

  Attributable to Altria    
  Common
Stock Additional
Paid-in
Capital Earnings
Reinvested
in the
Business Accumulated
Other
Comprehensive
Losses Cost of
Repurchased
Stock Non-
controlling
Interest (1)
Total
Stockholders’
Equity (Deficit)
Balances, December 31, 2025
$ 935   $ 5,921   $ 35,452   $ ( 2,627 ) $ ( 43,183 ) $ 50   $ ( 3,452 )
Net earnings —   —   2,183   —   —   —   2,183  
Other comprehensive earnings (losses), net of deferred income taxes —   —   —   177   —   —   177  
Stock award activity —   ( 27 ) —   —   16   —   ( 11 )
Cash dividends declared ($ 1.06 per share)
—   —   ( 1,776 ) —   —   —   ( 1,776 )
Repurchases of common stock —   —   —   —   ( 280 ) —   ( 280 )
Other —   —   —   —   ( 2 ) —   ( 2 )
Balances, March 31, 2026
$ 935   $ 5,894   $ 35,859   $ ( 2,450 ) $ ( 43,449 ) $ 50   $ ( 3,161 )

Balances, December 31, 2024
$ 935   $ 5,905   $ 35,516   $ ( 2,400 ) $ ( 42,194 ) $ 50   $ ( 2,188 )
Net earnings —  —  1,077   —  —  —  1,077  
Other comprehensive earnings (losses), net of deferred income taxes
—  —  —  ( 291 ) —  —  ( 291 )
Stock award activity
—  ( 22 ) —  —  18   —  ( 4 )
Cash dividends declared ($ 1.02 per share)
—  —  ( 1,725 ) —  —  —  ( 1,725 )
Repurchases of common stock —  —  —  —  ( 326 ) —  ( 326 )
Other —  —  —  —  ( 3 ) —  ( 3 )
Balances, March 31, 2025
$ 935   $ 5,883   $ 34,868   $ ( 2,691 ) $ ( 42,505 ) $ 50   $ ( 3,460 )

(1) Represents the non-cash contribution made by JTIUH to Horizon. See Note 1. Background and Basis of Presentation .

See notes to condensed consolidated financial statements.
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Altria Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in millions of dollars)
(Unaudited)
_____________________

For the Three Months Ended March 31, 2026 2025
Cash Provided by (Used in) Operating Activities
Net earnings $ 2,183   $ 1,077  
Adjustments to reconcile net earnings to operating cash flows:
Depreciation and amortization 56   71  
Deferred income tax provision 46   26  

Fair value adjustment for NJOY Transaction contingent payments —   25  
(Income) losses from investments in equity securities ( 158 ) ( 143 )

Exit costs, net of cash paid ( 5 ) ( 1 )
Impairment of goodwill —   873  
Cash effects of changes:
Receivables ( 20 ) ( 80 )
Inventories ( 76 ) ( 18 )
Accounts payable ( 24 ) ( 136 )
Income taxes 610   565  
Accrued liabilities and other current assets ( 998 ) ( 302 )
Accrued settlement charges 659   678  
Pension plan contributions ( 4 ) ( 5 )
Pension and postretirement, net ( 10 ) ( 20 )
Other, net 65   110  
Net cash provided by (used in) operating activities 2,324   2,720  
Cash Provided by (Used in) Investing Activities
Capital expenditures ( 93 ) ( 38 )

Other, net ( 16 ) ( 5 )
Net cash provided by (used in) investing activities ( 109 ) ( 43 )
Cash Provided by (Used in) Financing Activities
Long-term debt issued —   997  

Long-term debt repaid ( 1,069 ) —  
Repurchases of common stock ( 280 ) ( 326 )
Dividends paid on common stock ( 1,780 ) ( 1,730 )

Other, net ( 28 ) ( 26 )
Net cash provided by (used in) financing activities ( 3,157 ) ( 1,085 )
Cash, cash equivalents and restricted cash: (1)

Increase (decrease) ( 942 ) 1,592  
Balance at beginning of period 4,492   3,158  
Balance at end of period $ 3,550   $ 4,750  

(1) For a reconciliation to our condensed consolidated balance sheets, see Note 13. Additional Financial Statement Information - Cash, Cash Equivalents and Restricted Cash .

See notes to condensed consolidated financial statements.
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Altria Group, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)

Note 1. Background and Basis of Presentation
When used in these notes, 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.
▪ Background: At March 31, 2026, our wholly owned subsidiaries included Philip Morris USA Inc. (“PM USA”), which is engaged in the manufacture and sale of cigarettes; John Middleton Co. (“Middleton”), which is engaged in the manufacture and sale of machine-made large cigars and is a wholly owned subsidiary of PM USA; UST LLC (“UST”), which, through its wholly owned subsidiary U.S. Smokeless Tobacco Company LLC (“USSTC”), is engaged in the manufacture and sale of moist smokeless tobacco (“MST”) products; Helix Innovations LLC (“Helix”) and its foreign affiliates (“Helix International”), which are engaged in the manufacture and sale of oral nicotine pouches; and NJOY, LLC (“NJOY”), which is engaged in the manufacture and sale of e-vapor products. We operate primarily within the United States and generate substantially all of our revenue from domestic customers. Other wholly owned subsidiaries included Altria Group Distribution Company (“AGDC”), which provides domestic sales and distribution services to our operating companies, and Altria Client Services LLC (“ALCS”), which provides various support services to our companies in areas such as legal, regulatory, research and product development, consumer engagement, finance, human resources and external affairs. Our access to the operating cash flows of our subsidiaries consists of cash received from the payment of dividends and distributions, and the payment of interest on intercompany loans. At March 31, 2026, our significant subsidiaries were not limited by contractual obligations in their ability to pay cash dividends or make other distributions with respect to their equity interests.
At March 31, 2026, we owned a 75 % economic interest in Horizon Innovations LLC (“Horizon”), a joint venture with JTI (US) Holding, Inc. (“JTIUH”), a subsidiary of Japan Tobacco Inc., which owned the remaining 25 % economic interest. Horizon is responsible for the U.S. marketing and commercialization of heated tobacco stick products owned by either party. At March 31, 2026, Horizon had no products in the U.S. marketplace.
At March 31, 2026, we had investments in Anheuser-Busch InBev SA/NV (“ABI”) and Cronos Group Inc. (“Cronos”). For further discussion of our investments, see Note 4. Investments in Equity Securities .
▪ Basis of Presentation: Our interim condensed consolidated financial statements are unaudited. We have prepared these interim condensed consolidated financial statements in conformity with United States generally accepted accounting principles (“GAAP”) and have applied such principles on a consistent basis. We have omitted certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP. Our management believes that all adjustments necessary for a fair statement of the interim results presented have been reflected in our interim condensed consolidated financial statements. All such adjustments were of a normal recurring nature. Net revenues and net earnings for any interim period are not necessarily indicative of results that may be expected for the entire year.
These condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and related notes, which appear in our Annual Report on Form 10-K for the year ended December 31, 2025 (“2025 Form 10-K”).
Certain immaterial prior year amounts have been reclassified to conform with the current year’s presentation.
On January 1, 2026, we adopted Accounting Standards Update (“ASU”) 2025-05, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU No. 2025-05”). This guidance provides a practical expedient for the calculation of current expected credit losses on current accounts receivable and current contract assets that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. We elected to apply this practical expedient upon adoption of ASU No. 2025-05, which had no impact on our condensed consolidated financial statements for the period ended March 31, 2026.
For a description of issued accounting guidance applicable to, but not yet adopted by, us, see Note 14. New Accounting Guidance Not Yet Adopted .
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Note 2. Goodwill and Other Intangible Assets, net
Goodwill and other intangible assets, net, were as follows:

March 31, 2026 December 31, 2025
(in millions) Goodwill Other Intangible Assets, net Goodwill Other Intangible Assets, net
Smokeable products segment $ 99   $ 2,902   $ 99   $ 2,909  
Oral tobacco products segment 5,078   8,637   5,078   8,646  

Other (1)
610   334   610   321  
Total $ 5,787   $ 11,873   $ 5,787   $ 11,876  

(1) Comprised primarily of e-vapor reporting unit goodwill and definite-lived intangible assets related to our 2023 acquisition of NJOY.
Other intangible assets consisted of the following:

March 31, 2026 December 31, 2025
(in millions) Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization
Indefinite-lived intangible assets
$ 11,089   $ —   $ 11,089   $ — 
Definite-lived intangible assets
1,676   892   1,656   869  
Total other intangible assets $ 12,765   $ 892   $ 12,745   $ 869  

At March 31, 2026, substantially all of our indefinite-lived intangible assets consisted of (i) MST trademarks of $ 8.5  billion, which consists of Copenhagen , Skoal and other MST trademarks of $ 4.0 billion, $ 3.6 billion and $ 0.9 billion, respectively, from our 2009 acquisition of UST, and (ii) cigar trademarks of $ 2.6 billion from our 2007 acquisition of Middleton. Definite-lived intangible assets, consisting primarily of intellectual property, certain cigarette trademarks and customer relationships, are amortized over a weighted-average period of approximately 19 years. Pre-tax amortization expense for definite-lived intangible assets was $ 23 million and $ 37  million for the three months ended March 31, 2026 and 2025, respectively.
The changes in goodwill and net carrying amount of intangible assets were as follows:

For the Three Months Ended March 31, 2026 For the Year Ended
December 31, 2025
(in millions) Goodwill Other Intangible Assets, net Goodwill Other Intangible Assets, net
Balance at January 1
$ 5,787   $ 11,876   $ 6,945   $ 12,973  
Changes due to:

   Acquisitions —   20   —   5  
   Impairments
—   —   ( 1,158 ) (1)
( 970 )
   Amortization
—   ( 23 ) —  ( 132 )
Balance at end of period $ 5,787   $ 11,873   $ 5,787   $ 11,876  

(1) Comprised of non-cash goodwill impairments of $ 873 million and $ 285 million recorded in the first and fourth quarters of 2025, respectively.
We conduct a required annual review of goodwill and indefinite-lived intangible assets for potential impairment as of October 1 of each year, in accordance with our accounting policy, and more frequently if an event occurs or circumstances change that would require us to perform an interim quantitative impairment assessment. There have been no events or changes in circumstances that indicate an interim quantitative impairment assessment was required as of March 31, 2026.
Our annual impairment test of goodwill and indefinite-lived intangible assets as of October 1, 2025 resulted in a non-cash, pre-tax impairment of $ 970  million to our e-vapor reporting unit’s definite-lived intangible assets and a non-cash impairment of $ 285  million to our e-vapor reporting unit goodwill which we recorded in our consolidated statement of earnings for the year ended December 31, 2025.
At March 31, 2026 and December 31, 2025, accumulated impairment losses related to goodwill were $ 1,158  million, which related to the e-vapor reporting unit.
First Quarter of 2025 E-vapor Reporting Unit Goodwill Impairment
At December 31, 2024, the carrying value of the e-vapor reporting unit goodwill was $ 1,768  million. The estimated fair value of the e-vapor reporting unit goodwill exceeded its carrying value by approximately 28 % ($ 0.3  billion). As further discussed in Note 12. Contingencies , Altria and certain of our affiliates, including NJOY, are defendants in lawsuits alleging patent infringement based on the
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sale of NJOY ACE in the United States. In January 2025, the U.S. International Trade Commission (“ITC”) issued an exclusion order and cease-and-desist orders prohibiting the importation and sale of NJOY ACE in the United States, which became effective on March 31, 2025. As a result, in connection with the preparation of our condensed consolidated financial statements for the period ended March 31, 2025, we concluded a triggering event had occurred and performed an interim impairment assessment. Based on the results of that assessment, we recorded a non-cash goodwill impairment of $ 873 million during the three months ended March 31, 2025. This impairment was due primarily to (i) lower projected volume and revenue due to NJOY ACE ’s removal from the U.S. market and (ii) higher projected costs associated with the commercialization of NJOY’s future e-vapor product portfolio, resulting in lower projected operating margins. As of March 31, 2025, after recording the impairment, the carrying value of goodwill within the e-vapor reporting unit was $ 895 million. In addition, the carrying value of the e-vapor reporting unit’s net assets (including the effect of intercompany debt), which was negative, approximated its estimated fair value.
We used an income approach to estimate the fair value of the e-vapor reporting unit. Due to the presence of uncertainties, our cash flows were based on a range of scenarios that consider certain potential regulatory and market outcomes, including the projected impact of enforcement on illicit flavored disposable e-vapor products. In performing the discounted cash flow analyses, we made various judgments, estimates and assumptions, the most significant of which were volume, price, revenue, income, operating margins, scenario weightings, perpetual growth rate and discount rates. We developed these significant assumptions based on our evaluation of the future state of the e-vapor category, including macroeconomic conditions, governmental actions, and other factors, and based these assumptions on factors specific to NJOY’s business. The discount rates used in performing the valuation ranged from 12.0 % to 15.0 % at March 31, 2025. All significant inputs are classified in Level 3 of the fair value hierarchy.

Note 3. Exit and Implementation Costs
Pre-tax implementation costs consisted of the following:

For the Three Months Ended March 31,
(in millions) 2026 2025

Smokeable products segment $ 5   $ 13  
Oral tobacco products segment 1   2  

Total (1)
$ 6   $ 15  

(1) Recorded in marketing, administration and research costs in our condensed consolidated statements of earnings.
There were no exit costs for the three months ended March 31, 2026 and 2025.
In October 2024, we announced a multi-phase Optimize & Accelerate initiative (“Initiative”) designed to modernize our ways of working and enable us to increase our organization’s speed, efficiency and effectiveness by centralizing work, outsourcing certain transactional tasks and streamlining, automating and standardizing processes.
We estimate total pre-tax charges for the Initiative to be approximately $ 175 million. As of March 31, 2026, total pre-tax charges since the inception of the Initiative were $ 130 million, consisting of employee separation costs of $ 43 million and implementation costs of $ 87  million. We expect to record the majority of the remaining charges by the end of 2027. All of these charges result in cash expenditures and consist of severance payments associated with employee separations, implementation costs for new technology and business advisory services and other costs. We record employee separation costs when probable and reasonably estimable. As of March 31, 2026, total cash payments since the inception of the Initiative were $ 103 million, consisting of $ 23  million for exit costs and $ 80  million for implementation costs.
A summary of the charges and cash paid for exit and implementation costs related to the Initiative is as follows:

(in millions) Exit Costs Implementation Costs Total
Balances at December 31, 2024 $ 35   $ 22   $ 57  
Charges 8   48   56  
Cash paid ( 18 ) ( 61 ) ( 79 )
Balances at December 31, 2025 25   9   34  
Charges —   6   6  
Cash paid ( 5 ) ( 8 ) ( 13 )
Balances at March 31, 2026 $ 20   (1) $ 7   $ 27  

(1) Restructuring liabilities, all of which were severance liabilities.
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Note 4. Investments in Equity Securities
The carrying amount of our investments consisted of the following:

(in millions) March 31, 2026 December 31, 2025
ABI $ 8,627   $ 8,303  
Cronos 320   314  

Total $ 8,947   $ 8,617  

(Income) losses from our investments in equity securities consisted of the following:

For the Three Months Ended March 31,
(in millions) 2026 2025
ABI (1)
$ ( 159 ) $ ( 125 )
Cronos (1)
1   ( 18 )
(Income) losses from investments in equity securities $ ( 158 ) $ ( 143 )

(1) Includes our share of amounts recorded by our investees and additional adjustments, if required, related to (i) the conversion from international financial reporting standards to GAAP and (ii) adjustments to our investments required under the equity method of accounting.

Investment in ABI
At March 31, 2026, we had an approximate 8.2 % ownership interest in ABI, consisting of approximately 125 million restricted shares of ABI (“Restricted Shares”) and approximately 34 million ordinary shares of ABI. Our Restricted Shares:
▪ are unlisted and not admitted to trading on any stock exchange;
▪ are convertible by us into ordinary shares of ABI on a one -for-one basis;
▪ rank equally with ordinary shares of ABI with regards to dividends and voting rights; and
▪ have director nomination rights with respect to ABI.
We account for our investment in ABI under the equity method of accounting because we have active representation on ABI’s board of directors and certain ABI board committees. Through this representation, we believe we have the ability to exercise significant influence over the operating and financial policies of ABI and participate in ABI’s policy making processes.
We report our share of ABI’s results using a one-quarter lag because ABI’s results are not available in time for us to record them in the concurrent period.
The fair value of our investment in ABI is based on (i) unadjusted quoted prices in active markets for ABI’s ordinary shares and is classified in Level 1 of the fair value hierarchy and (ii) observable inputs other than Level 1 prices, such as quoted prices for similar assets for the Restricted Shares and is classified in Level 2 of the fair value hierarchy. Because we can convert our Restricted Shares into ordinary shares at our discretion, the fair value of each Restricted Share is based on the value of an ordinary share.
At March 31, 2026, the fair value of our investment in ABI was $ 11.0 billion, which exceeded its carrying value of $ 8.6  billion by approximately 27 %. At December 31, 2025, the fair value of our investment in ABI was $ 10.3 billion, which exceeded its carrying value of $ 8.3 billion by approximately 24 %.

Investment in Cronos
At March 31, 2026, we had an approximate 41.6 % ownership interest in Cronos, consisting of approximately 157 million shares, which we account for under the equity method of accounting. We report our share of Cronos’s results using a one-quarter lag because Cronos’s results are not available in time for us to record them in the concurrent period.
The fair value of our investment in Cronos is based on unadjusted quoted prices in active markets for Cronos’s common shares and is classified in Level 1 of the fair value hierarchy. At March 31, 2026, the fair value of our investment in Cronos was $ 396 million, which exceeded its carrying value of $ 320 million by approximately 24 %. At December 31, 2025, the fair value of our investment in Cronos was $ 411 million, which exceeded its carrying value of $ 314 million by approximately 31 %.

Note 5. Financial Instruments
Our investment in ABI, whose functional currency is the Euro, exposes us to foreign currency exchange risk on the carrying value of our investment. To manage this risk, we may designate Euro denominated unsecured long-term notes (“foreign currency denominated debt”) and certain foreign exchange contracts, including cross-currency swap contracts and forward contracts (collectively, “foreign currency contracts”), as net investment hedges of our investment in ABI. At March 31, 2026 and December 31, 2025, we had no outstanding foreign currency contracts.
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The aggregate carrying value and fair value of our total long-term debt were as follows:

(in millions) March 31, 2026 December 31, 2025
Carrying value $ 24,602   $ 25,709  
Fair value 22,727   24,303  
Foreign currency denominated debt included in long-term debt:
Carrying value 2,595   2,638  
Fair value 2,545   2,619  

The fair value of our total long-term debt is based on observable market information derived from a third-party pricing source and is classified in Level 2 of the fair value hierarchy.
Net Investment Hedging
We recognize changes in the carrying value of the foreign currency denominated debt due to changes in the Euro to U.S. dollar exchange rate in accumulated other comprehensive losses related to ABI. We recognized pre-tax (gains) losses of our net investment hedges of $( 43 ) million and $ 139 million for the three months ended March 31, 2026 and 2025, respectively.
Contingent Payments
In 2023, we acquired NJOY Holdings, Inc. (“NJOY Transaction”). The total consideration for the NJOY Transaction included the fair value of up to $ 500  million in additional cash payments contingent on receipt of U.S. Food and Drug Administration (“FDA”) authorizations with respect to NJOY ACE menthol ($ 250 million, paid in 2024 following FDA authorization), blueberry ($ 125 million) and watermelon ($ 125  million) pod products.
The changes in the liability associated with contingent payments were as follows:

For the Three Months Ended March 31, 2026 For the Year Ended December 31, 2025
(in millions)
Balance at January 1 $ 45   $ 20  
Change in the fair value of contingent payments (1)
—   25  

Balance at end of period $ 45   $ 45  

(1) These pre-tax charges were recorded in the first quarter of 2025 in marketing, administration and research costs in our condensed consolidated statements of earnings and related to NJOY ACE blueberry and watermelon pod products.
We recognized the liability for contingent payments related to the NJOY Transaction at its estimated fair value as of the acquisition date. We recognize subsequent changes to the fair value in earnings until the contingency is resolved. In determining the estimated fair value, we made certain judgments, estimates and assumptions, the most significant of which was the likelihood of certain potential regulatory outcomes. We classified the liability for contingent payments in Level 3 of the fair value hierarchy.

Note 6. Benefit Plans
Components of Net Periodic Benefit Cost (Income)
Net periodic benefit cost (income) consisted of the following:

Pension Postretirement
For the Three Months Ended March 31,
 (in millions) 2026 2025 2026 2025
Service cost $ 8   $ 9   $ 2   $ 3  
Interest cost 72   79   13   14  
Expected return on plan assets
( 99 ) ( 107 ) ( 1 ) ( 1 )
Amortization:
Net loss (gain) 24   13   ( 3 ) ( 3 )
Prior service cost (credit)
1   1   ( 10 ) ( 10 )

Net periodic benefit cost (income) $ 6   $ ( 5 ) $ 1   $ 3  

Employer Contributions
We make contributions to our pension plans to the extent that the contributions are tax deductible and pay benefits that relate to plans for
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salaried employees that cannot be funded under Internal Revenue Service regulations. We made employer contributions of $ 4  million to our pension plans and did no t make any contributions to our postretirement plans during the three months ended March 31, 2026. Currently, we anticipate making additional employer contributions in 2026 to our pension and postretirement plans of up to approximately $ 56  million and $ 100 million, respectively. However, the foregoing estimates of 2026 contributions to our pension and postretirement plans are subject to change as a result of changes in tax and other benefit laws, changes in interest rates and asset performance significantly above or below the assumed long-term rate of return for each respective plan.

Note 7. Earnings per Share
We calculated basic and diluted earnings per share (“EPS”) using the following:

For the Three Months Ended March 31,
(in millions) 2026 2025
Net earnings $ 2,183   $ 1,077  
Less: Distributed and undistributed earnings attributable to share-based awards ( 5 ) ( 5 )
Earnings for basic and diluted EPS $ 2,178   $ 1,072  

Weighted-average shares for basic and diluted EPS 1,673   1,690  

Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents are participating securities and, therefore, are included in our EPS calculation pursuant to the two-class method.

Note 8. Other Comprehensive Earnings/Losses
Changes in each component of accumulated other comprehensive losses, net of deferred income taxes, attributable to Altria were as follows:

  For the Three Months Ended March 31, 2026
(in millions) Benefit Plans ABI Currency Translation Adjustments Accumulated
Other
Comprehensive
Losses
Balances, December 31, 2025 $ ( 1,415 ) $ ( 1,217 ) $ 5   $ ( 2,627 )

Other comprehensive earnings (losses) before reclassifications
—   205   4   209  
Deferred income taxes —   ( 44 ) —   ( 44 )
Other comprehensive earnings (losses) before reclassifications, net of deferred income taxes
—   161   4   165  

Amounts reclassified to net earnings 14   3   —   17  
Deferred income taxes ( 4 ) ( 1 ) —   ( 5 )
Amounts reclassified to net earnings, net of deferred income taxes 10   2   —   12  

Other comprehensive earnings (losses), net of deferred income taxes 10   163   (1)
4   177  

Balances, March 31, 2026 $ ( 1,405 ) $ ( 1,054 ) $ 9   $ ( 2,450 )

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For the Three Months Ended March 31, 2025
(in millions) Benefit Plans ABI Currency Translation Adjustments Accumulated
Other
Comprehensive
Losses
Balances, December 31, 2024 $ ( 1,392 ) $ ( 1,018 ) $ 10   $ ( 2,400 )

Other comprehensive earnings (losses) before reclassifications
—   ( 331 ) ( 23 ) ( 354 )
Deferred income taxes —   73   —   73  
Other comprehensive earnings (losses) before reclassifications, net of deferred income taxes
—   ( 258 ) ( 23 ) ( 281 )

Amounts reclassified to net earnings 2   ( 14 ) —   ( 12 )
Deferred income taxes ( 1 ) 3   —   2  
Amounts reclassified to net earnings, net of deferred income taxes 1   ( 11 ) —   ( 10 )

Other comprehensive earnings (losses), net of deferred income taxes 1   ( 269 ) (1)
( 23 ) ( 291 )

Balances, March 31, 2025 $ ( 1,391 ) $ ( 1,287 ) $ ( 13 ) $ ( 2,691 )

(1) Primarily reflects our share of ABI’s currency translation adjustments and the impact of our designated net investment hedges related to our investment in ABI. For further discussion of designated net investment hedges, see Note 5. Financial Instruments.

Pre-tax amounts by component, reclassified from accumulated other comprehensive losses to net earnings were as follows:

For the Three Months Ended March 31,
(in millions) 2026 2025
Benefit Plans: (1)

Net loss $ 23   $ 11  
Prior service credit ( 9 ) ( 9 )
14   2  
ABI (2)
3   ( 14 )

Pre-tax amounts reclassified from accumulated other comprehensive losses to net earnings $ 17   $ ( 12 )

(1) Amounts are included in net periodic benefit income, excluding service cost. For further details, see Note 6. Benefit Plans.
(2) Amounts are included in (income) losses from investments in equity securities.

Note 9. Segment Reporting
At March 31, 2026, our reportable segments were (i) smokeable products, consisting of combustible cigarettes and machine-made large cigars; and (ii) oral tobacco products, consisting of MST products and oral nicotine pouches.
For the year ended December 31, 2025, we concluded that our e-vapor products operating segment met the quantitative threshold for presentation as a reportable segment in accordance with Accounting Standards Codification 280, Segment Reporting (“ASC 280”), as a result of the non-cash impairments of e-vapor reporting unit goodwill and related definite-lived intangible assets recorded in 2025. See Note 2. Goodwill and Other Intangible Assets, net . As a result, in our 2025 Form 10-K, we presented e-vapor products as a reportable segment (previously in our all other category) and recast segment information for comparative periods. As of March 31, 2026, we concluded that the e-vapor products operating segment was not expected to be of continuing significance and did not meet the quantitative thresholds as prescribed under ASC 280 for separate reportable segments. As such, the e-vapor products operating segment is no longer considered a reportable segment, and we included the e-vapor products operating segment results in our all other category for all periods presented.
At March 31, 2026, our all other category included (i) e-vapor products, consisting of our NJOY business; (ii) Horizon; (iii) Helix International; and (iv) other business activities, which primarily consists of research and development (“R&D”) expense related to certain new product platforms and technologies.
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Altria’s Chief Executive Officer is our chief operating decision maker (“CODM”). Our measure of segment profitability is segment operating companies income (loss) (“OCI”), which is defined as operating income before general corporate expenses and amortization of intangibles. Our CODM uses OCI for planning, forecasting and evaluating business and financial performance of the segments, including allocating capital and other resources to our segments and evaluating results relative to employee compensation targets. Interest and other debt expense, net, along with net periodic benefit income, excluding service cost, and provision for income taxes are centrally managed at the corporate level and, accordingly, such items are not presented by segment since they are excluded from the measure of segment profitability reviewed by our CODM. We do not disclose information about total assets by segment because such information is not reported to or used by our CODM. Segment goodwill and other intangible assets, net, are disclosed in Note 2. Goodwill and Other Intangible Assets, net.
Segment data were as follows:

For the Three Months Ended March 31,
(in millions) 2026 2025
Net revenues:
Smokeable products $ 4,758   $ 4,622  
Oral tobacco products 669   654  
All other 1   ( 17 )
Net revenues $ 5,428   $ 5,259  
Earnings before income taxes:
OCI:
Smokeable products $ 2,673   $ 2,469  
Oral tobacco products 435   433  
All other ( 76 ) ( 1,014 )
Amortization of intangibles ( 23 ) ( 37 )
General corporate expenses ( 53 ) ( 63 )
Operating income 2,956   1,788  
Interest and other debt expense, net 258   262  
Net periodic benefit income, excluding service cost ( 3 ) ( 14 )
(Income) losses from investments in equity securities ( 158 ) ( 143 )

Earnings before income taxes $ 2,859   $ 1,683  

Smokeable products segment OCI consisted of the following, including expenses under the significant expense principle in accordance with GAAP:

For the Three Months Ended March 31,
(in millions) 2026 2025
Net revenues $ 4,758   $ 4,622  
Settlement charges (1)
( 668 ) ( 687 )
Excise taxes on products sold ( 648 ) ( 715 )
Other segment items (2)
( 769 ) ( 751 )
Operating companies income $ 2,673   $ 2,469  

(1) Represents charges related to State Settlement Agreements included in cost of sales. For additional information, see Health Care Cost Recovery Litigation in Note 12. Contingencies .
(2) Other segment items includes manufacturing, marketing, administration and research costs, FDA user fees and other costs.
For the oral tobacco products segment, we did not identify any expenses under the significant expense principle in accordance with GAAP. Other segment items for our oral tobacco products segment include manufacturing, marketing, administration and research costs and excise taxes on products sold. Total oral tobacco products other segment items were $ 234 million and $ 221 million for the three months ended March 31, 2026 and 2025, respectively. The CODM reviews total oral tobacco products segment expenses in the aggregate in conjunction with the review of budget-to-actual OCI variances to manage segment operations.

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Details of our depreciation expense and capital expenditures were as follows:

  For the Three Months Ended March 31,
(in millions) 2026 2025
Depreciation expense:
Smokeable products $ 13   $ 15  
Oral tobacco products 11   10  
General corporate and other 9   9  
Total depreciation expense $ 33   $ 34  
Capital expenditures:
Smokeable products $ 52   $ 18  
Oral tobacco products 34   13  
General corporate and other 7   7  
Total capital expenditures $ 93   $ 38  

The comparability of OCI for our reportable segments was affected by the following:
▪ Tobacco and Health and Certain Other Litigation Items: We recorded pre-tax charges related to tobacco and health and certain other litigation items as follows:

For the Three Months Ended March 31,
(in millions) 2026 2025
Smokeable products segment $ 2   $ 36  

Interest and other debt expense, net
—   4  
Total $ 2   $ 40  

We recorded the amounts shown in the table above in our smokeable products segment in marketing, administration and research costs in our condensed consolidated statements of earnings. For further discussion, see Note 12. Contingencies .

Note 10. Debt
Short-term Borrowings and Borrowing Arrangements
At March 31, 2026 and December 31, 2025, we had no short-term borrowings.
We have a $ 3.0 billion senior unsecured 5-year revolving credit agreement (“Credit Agreement”) that expires on October 24, 2029 and includes an option, subject to certain conditions, for us to extend the term for an additional one-year period. We intend to use any borrowings under our Credit Agreement for general corporate purposes.
At March 31, 2026, we had availability under the Credit Agreement for borrowings of up to an aggregate principal amount of $ 3.0  billion.
Pricing for interest and fees under our Credit Agreement may be modified in the event of a change in the rating of our long-term senior unsecured debt. We expect interest rates on borrowings under our Credit Agreement to be based on the Term Secured Overnight Financing Rate plus a percentage based on the higher of the ratings of our long-term senior unsecured debt from Moody’s Investors Service, Inc. and Standard & Poor’s Financial Services LLC. The applicable percentage for borrowings under our Credit Agreement at March 31, 2026 was 1.0 % based on our long-term senior unsecured debt ratings on that date. Our Credit Agreement does not include any other rating triggers or any provisions that could require the posting of collateral.
Our Credit Agreement includes various covenants, one of which requires us to maintain a ratio of Consolidated EBITDA (earnings before interest, taxes, depreciation and amortization) to Consolidated Interest Expense of not less than 4.0 to 1.0, calculated for the four most recent fiscal quarters. At March 31, 2026, we were in compliance with our covenants in our Credit Agreement. The terms “Consolidated EBITDA” and “Consolidated Interest Expense,” each as defined in our Credit Agreement, include certain adjustments.
PM USA guarantees any borrowings under our Credit Agreement and any amounts outstanding under our commercial paper program.
Long-term Debt
The aggregate carrying value of our total long-term debt at March 31, 2026 and December 31, 2025 was $ 24.6 billion and $ 25.7  billion, respectively.
In February 2026, we repaid in full at maturity our 4.400 % senior unsecured notes in the aggregate principal amount of approximately $ 1.1 billion.
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At March 31, 2026 and December 31, 2025, accrued interest on long-term debt of $ 243 million and $ 425 million, respectively, was included in other accrued liabilities on our condensed consolidated balance sheets.
For a discussion of the fair value of our long-term debt and the designation of our Euro denominated senior unsecured notes as a net investment hedge of our investment in ABI, see Note 5. Financial Instruments .

Note 11. Income Taxes
The income tax rates for the three months ended March 31, 2026 and 2025 were 23.6 % and 36.0 %, respectively. The change in the income tax rate was due primarily to the non-deductible impairment of the e-vapor reporting unit goodwill in 2025. For further discussion of the non-deductible impairment, see Note 2. Goodwill and Other Intangible Assets, net .

Note 12. Contingencies
Legal proceedings covering a wide range of matters are pending or threatened in various United States and foreign jurisdictions against Altria and certain of our subsidiaries, including PM USA and NJOY, as well as our indemnitees. Various types of claims may be raised in these proceedings, including product liability, unfair trade practices, antitrust, tax liability, contraband shipments, patent infringement, employment matters, environmental matters, claims alleging violation of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), claims for contribution and claims of competitors, shareholders or distributors. Legislative action, such as changes to tort law, also may expand the types of claims and remedies available to plaintiffs.
Litigation is subject to uncertainty, and it is possible that there could be adverse developments in pending or future cases. An unfavorable outcome or settlement of pending tobacco-related or other litigation could encourage the commencement of additional litigation. Damages claimed in some tobacco-related and other litigation are or can be significant and, in certain cases, have ranged in the billions of dollars. The variability in pleadings in multiple jurisdictions, together with the actual experience of management in litigating claims, demonstrates that the monetary relief that may be specified in a lawsuit bears little relevance to the ultimate outcome. In certain cases, plaintiffs claim that defendants’ liability is joint and several. In such cases, we may face the risk that one or more co-defendants decline or otherwise fail to participate in the bonding required for an appeal or to pay their proportionate or jury-allocated share of a judgment. As a result, under certain circumstances, we may have to pay more than our proportionate share of any bonding- or judgment-related amounts. Furthermore, in those cases where plaintiffs are successful, we also may be required to pay interest and attorneys’ fees.
Although PM USA historically has been able to obtain required bonds or relief from bonding requirements in order to prevent plaintiffs from seeking to collect judgments while adverse verdicts have been appealed, there remains a risk that such relief may not be obtainable in all cases. This risk has been substantially reduced given that 47 states and Puerto Rico limit the dollar amount of bonds or require no bond at all. However, tobacco litigation plaintiffs have challenged the constitutionality of Florida’s bond cap statute in several cases, and plaintiffs may challenge state bond cap statutes in other jurisdictions as well. Such challenges may include the applicability of state bond caps in federal court. States, including Florida, also may seek to repeal or alter bond cap statutes through legislation. Although we cannot predict the outcome of such challenges, it is possible that our condensed consolidated results of operations, cash flows or financial position could be materially affected in a particular fiscal quarter or fiscal year by an unfavorable outcome of one or more such challenges.
We record provisions in our condensed consolidated financial statements for pending litigation when we determine that an unfavorable outcome is probable and the amount of the loss can be reasonably estimated. At the present time, while it is reasonably possible that an unfavorable outcome in a case may occur, except to the extent discussed elsewhere in this Note 12. Contingencies : (i) management has concluded that it is not probable that a loss has been incurred in any of the pending cases; (ii) management is unable to estimate the possible loss or range of loss that could result from an unfavorable outcome in any of the pending cases; and (iii) accordingly, management has not provided any amounts in our condensed consolidated financial statements for unfavorable outcomes, if any. Litigation defense costs are expensed as incurred.
We have achieved substantial success in managing litigation. Nevertheless, litigation is subject to uncertainty and significant challenges remain. It is possible that our condensed consolidated results of operations, cash flows or financial position could be materially affected in a particular fiscal quarter or fiscal year by an unfavorable outcome or settlement of certain pending litigation. We believe, and have been so advised by counsel handling the respective cases, that we have valid defenses to the litigation pending against us, as well as valid bases for appeal of adverse verdicts. We have defended, and will continue to defend, vigorously against litigation challenges. However, we may enter into settlement discussions in particular cases if we believe it is in our best interests to do so.
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Judgments Paid and Provisions for Tobacco and Health (Including Engle Progeny Litigation) and Certain Other Litigation Items: The changes in our accrued liability for tobacco and health and certain other litigation items, including related interest costs, for the periods specified below are as follows:

For the Three Months Ended March 31,
(in millions) 2026 2025
Accrued liability for tobacco and health and certain other litigation items at beginning of period $ 71   $ 96  
Pre-tax charges for:
Tobacco and health and certain other litigation (1)
2  

36  

JUUL-related settlements (2)
—   —  
Related interest costs —   4  

Payments ( 10 ) ( 18 )
Accrued liability for tobacco and health and certain other litigation items at end of period $ 63   $ 118  

(1) Includes judgments, settlements and fee disputes associated with tobacco and health and certain other litigation.
(2) Includes the settlement of certain e-vapor product litigation relating to JUUL e-vapor products. See E-vapor Product Litigation below for a discussion of these settlements.
The accrued liability for tobacco and health and certain other litigation items, including related interest costs, was included in accrued liabilities and other liabilities on our condensed consolidated balance sheets. Pre-tax charges except for related interest costs were included in marketing, administration and research costs in our condensed consolidated statements of earnings. Pre-tax charges for related interest costs were included in interest and other debt expense, net in our condensed consolidated statements of earnings.
Since October 2004, PM USA has paid judgments and settlements (including related costs and fees) totaling approximately $ 1.2 billion and interest totaling approximately $ 245 million as of March 31, 2026. These amounts include payments for Engle progeny judgments (and related costs and fees) totaling approximately $ 454 million and related interest totaling approximately $ 62  million.
Security for Judgments: To obtain stays of judgments pending appeal, PM USA has posted various forms of security. As of March 31, 2026, PM USA has posted appeal bonds totaling approximately $ 15 million, which have been collateralized with restricted cash and are included in assets on our condensed consolidated balance sheets.
Overview of Tobacco-Related Litigation
Types and Number of U.S. Cases: Claims related to tobacco products generally fall within the following categories: (i) smoking and health cases alleging personal injury brought on behalf of individual plaintiffs; (ii) health care cost recovery cases brought by governmental (both domestic and foreign) plaintiffs seeking reimbursement for health care expenditures allegedly caused by cigarette smoking and/or disgorgement of profits; (iii) e-vapor cases alleging violation of RICO, fraud, failure to warn, design defect, negligence, antitrust, patent infringement and unfair trade practices; and (iv) other tobacco-related litigation described below. Plaintiffs’ theories of recovery and the defenses raised in tobacco-related litigation are discussed below.
The table below lists the number of certain tobacco-related cases pending in the United States against us as of:

April 27, 2026 April 24, 2025 April 22, 2024
Individual Smoking and Health Cases (1)
218 198 174
Health Care Cost Recovery Actions 1 1 1
E-vapor Cases (2)
16
24 5,177
Other Tobacco-Related Cases (3)
3 3 3

(1) Includes as of April 27, 2026, 34 cases filed in Illinois, nine cases filed in New Mexico, 94 cases filed in Massachusetts, 15 cases filed in Oregon, seven cases filed in Hawaii, 11 cases filed in the U.S. Virgin Islands, 38 cases filed in Pennsylvania and nine non- Engle cases filed in Florida. Does not include individual smoking and health cases brought by or on behalf of plaintiffs in Florida state and federal courts following the decertification of the Engle class (these Engle progeny cases are discussed below in Smoking and Health Litigation - Engle Progeny Cases ).
(2) In May 2023, we reached agreement on terms to resolve the majority of the Multidistrict Litigation lawsuits, and, in March 2024, the court granted final approval of the settlement. Pending final dismissal of these cases, as of April 27, 2026, the remaining cases include 11 individual cases that opted out of the settlement, four class action lawsuits pending in Canada and one individual state court case relating to the Multidistrict Litigation. For further discussion of the Multidistrict Litigation settlement, see E-vapor Product Litigation below.
(3) See Certain Other Tobacco-Related Litigation - “Lights/Ultra Lights” Cases and Other Smoking and Health Class Actions below.
International Tobacco-Related Cases: As of April 27, 2026, (i) Altria is named as a defendant in four e-vapor class action lawsuits in Canada; (ii) PM USA is a named defendant in nine health care cost recovery actions in Canada, seven of which also name Altria as a defendant; and (iii) PM USA and Altria are named as defendants in six smoking and health class actions filed in various Canadian
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provinces. See Smoking and Health Litigation - Other Smoking and Health Class Actions below for a discussion of the smoking and health class actions filed in various Canadian Provinces. Also, see Guarantees and Other Similar Matters below for a discussion of the Distribution Agreement (defined below) between Altria and PMI that provides for indemnities for certain liabilities concerning tobacco products.
Tobacco-Related Cases Set for Trial: As of April 27, 2026, one Engle progeny case, no individual smoking and health cases and no e-vapor cases are set for trial through June 30, 2026. Trial dates are subject to change.
Trial Results: Since January 1999, excluding the Engle progeny cases (separately discussed below), verdicts have been returned in 88 tobacco-related cases in which PM USA was a defendant. Verdicts in favor of PM USA and other defendants were returned in 54 of the 88 cases. Of the 34 non- Engle progeny cases in which verdicts were returned in favor of plaintiffs, 29 have reached final resolution.
See Smoking and Health Liti gation - Engle Progeny Trial Results below for a discussion of verdicts in state and federal Engle progeny cases involving PM USA as of April 27, 2026.
Smoking and Health Litigation
Overview: Plaintiffs’ allegations of liability in smoking and health cases are based on various theories of recovery, including negligence, gross negligence, strict liability, fraud, misrepresentation, design defect, failure to warn, nuisance, breach of express and implied warranties, breach of special duty, conspiracy, concert of action, violations of unfair trade practice laws and consumer protection statutes and claims under the federal and state anti-racketeering statutes. Plaintiffs in the smoking and health cases seek various forms of relief, including compensatory and punitive damages, treble/multiple damages and other statutory damages and penalties, creation of medical monitoring and smoking cessation funds, disgorgement of profits, and injunctive and equitable relief. Defenses raised in these cases include lack of proximate cause, assumption of the risk, comparative fault and/or contributory negligence, statutes of limitations and preemption by the Federal Cigarette Labeling and Advertising Act.
Non- Engle Progeny Litigation: The charts below summarize the verdicts in and post-trial status of certain non- Engle progeny smoking and health cases in which verdicts were returned in favor of plaintiffs. The first chart lists cases that are pending as of April 27, 2026 where PM USA has determined an unfavorable outcome is not probable and the amount of loss cannot be reasonably estimated, and the second chart lists cases that have concluded in the past 12 months where PM USA paid a final judgment. In this Note 12. Contingencies , references to “R.J. Reynolds” are to R.J. Reynolds Tobacco Company. Unless otherwise noted for a particular case, the jury’s award for compensatory damages will not be reduced by any finding of plaintiff’s comparative fault. Further, the damages noted reflect adjustments based on post-trial or appellate rulings. A chart listing certain verdicts for plaintiffs in pending Engle progeny cases can be found in Smoking and Health Litigation - Engle Progeny Trial Results below.
Currently Pending Non-Engle Cases with Verdicts against PM USA
(rounded to nearest $ million)

Plaintiff Verdict Date Defendant(s) State Compensatory Damages (1)
Punitive Damages
(PM USA) Post-Trial Status
Petruzziello November 2025 PM USA R.J. Reynolds MA <$ 1 million
$ 0
Plaintiff has filed a notice of appeal.
Perez-Trinidad October 2025 PM USA R.J. Reynolds MA $ 1 million
$ 5.5 million
PM USA and R.J. Reynolds have filed notices of appeal.
Amaral March 2025 PM USA R.J. Reynolds MA $ 4 million
$ 25  million
PM USA and R.J. Reynolds have filed notices of appeal.
Ricapor-Hall August 2023 PM USA HI $ 6 million ($ 3  million)
$ 8 million
PM USA’s appeal and plaintiff’s cross-appeal remain pending. In April 2025, the Hawaii Supreme Court granted plaintiff’s application to transfer the appeal to that Court from the Intermediate Court of Appeals.
Fontaine September 2022 PM USA MA $ 8  million
$ 56 million
The Massachusetts Supreme Judicial Court affirmed judgment.

(1) PM USA’s portion of the compensatory damages award is noted parenthetically where the court has ruled that comparative fault applies.

Non-Engle Cases Concluded in Past 12 Months
(rounded to nearest $ million)

Plaintiff Verdict Date Defendant(s) State Payment Amount for Damages (if any)
Woodley August 2023 PM USA MA $ 5 million

Taylor August 2024 PM USA OR <$ 1 million

Engle Progeny Cases: Engle progeny cases are individual smoking and health lawsuits filed by Florida resident plaintiffs against one or more cigarette manufacturer defendants. The lawsuits arose following the Florida Supreme Court’s decertification of the class in Engle, et. al. v. R.J. Reynolds Tobacco Co., et. al. , a smoking and health class action lawsuit filed in Florida state court against multiple
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defendants, including PM USA, in which the jury returned a verdict in favor of the plaintiff class and the trial court assessed punitive damages against the defendants. In July 2006, the Florida Supreme Court mandated that the trial court’s punitive damages award be vacated, that the class approved by the trial court be decertified and that members of the decertified class could file individual actions against defendants within one year of issuance of the mandate. Plaintiffs in Engle progeny lawsuits are entitled to rely on certain liability findings from the class action lawsuit, substantially reducing each plaintiff’s burden of proof. These liability findings stipulate: (i) that smoking causes various diseases; (ii) that nicotine in cigarettes is addictive; (iii) that defendants’ cigarettes were defective and unreasonably dangerous; (iv) that defendants concealed or omitted material information not otherwise known or available knowing that the material was false or misleading or failed to disclose a material fact concerning the health effects or addictive nature of smoking; (v) that defendants agreed to conceal or omit information regarding the health effects of cigarettes or their addictive nature with the intention that smokers would rely on the information to their detriment; (vi) that defendants sold or supplied cigarettes that were defective; and (vii) that defendants were negligent.
Pending Engl e Progeny Cases: The deadline for filing Engle progeny cases expired in January 2008, at which point a total of approximately 9,300 federal and state claims were pending. As of April 27, 2026, approximately 44 state court cases were pending against PM USA or Altria. Each federal Engle progeny case has been resolved.
Engle Progeny Trial Results: As of April 27, 2026, 147 federal and state Engle progeny cases involving PM USA have resulted in verdicts. Eighty-eight were returned in favor of plaintiffs, four of which have been reversed post-trial or on appeal and remain pending. Fifty-nine verdicts were returned in favor of PM USA, one of which has been reversed post-trial or on appeal and remains pending. In addition, there have been a number of mistrials, only some of which have resulted in new trials as of April 27, 2026.
Post-trial activity in a case can result in a final resolution that differs from the initial verdict. In many cases, parties have appealed either compensatory or punitive damages awards or both. Courts also have increased and decreased the amounts of compensatory damages juries have awarded, decreased the amounts of punitive damages juries have awarded, declared mistrials and vacated judgments, in whole or in part, with respect to compensatory and punitive damages awards. Initial verdicts have been reversed in whole or in part on appeal or following retrial. Juries have returned verdicts in favor of or against PM USA awarding no damages. In cases where juries returned verdicts against PM USA awarding no damages, some trial courts have decided to award plaintiff damages notwithstanding the verdict. Cases also have been dismissed with or without prejudice before or after a verdict.
The charts below list the verdicts in and post-trial status of certain Engle progeny cases in which verdicts were returned in favor of plaintiffs. The first chart lists cases that are pending as of April 27, 2026 where PM USA has determined an unfavorable outcome is not probable and the amount of loss cannot be reasonably estimated, and the second chart lists cases that have concluded in the past 12 months. Unless otherwise noted for a particular case, the jury’s award for compensatory damages will not be reduced by any finding of plaintiff’s comparative fault. Further, the damages noted reflect adjustments based on post-trial or appellate rulings.
Currently Pending Engle Cases with Verdicts against PM USA
(rounded to nearest $ million)

Plaintiff Verdict Date Defendant(s) Court Compensatory Damages (1)
Punitive Damages
(PM USA) Post-Trial Status
Garcia June 2024 PM USA Miami-Dade $ 2  million
$ 10  million
Appeals to the Third District Court of Appeal pending.

(1) PM USA’s portion of the compensatory damages award is noted parenthetically where the court has ruled that comparative fault applies.
Engle Cases Concluded in Past 12 Months
(rounded to nearest $ million)

Plaintiff Verdict Date Defendant(s) Court Payment Amount for Damages (if any)
Chacon October 2023 PM USA Miami-Dade $ 1 million

McCall October 2023 PM USA Broward <$ 1 million

Other Smoking and Health Class Actions: Since the dismissal in May 1996 of a purported nationwide class action brought on behalf of allegedly addicted smokers, plaintiffs have filed numerous putative smoking and health class action suits in various state and federal courts. In general, these cases have purported to be brought on behalf of residents of a particular state or states (although a few cases have purported to be nationwide in scope) and have raised addiction claims and, in many cases, claims of physical injury as well.
Class certification has been denied or reversed by courts in approximately 60 smoking and health class actions involving PM USA. See Certain Other Tobacco-Related Litigation below for a discussion of “Lights” and “Ultra Lights” class action cases and medical monitoring class action cases pending against PM USA.
As of April 27, 2026, PM USA and Altria are named as defendants, along with other cigarette manufacturers, in six class actions filed in the Canadian provinces of Alberta, Manitoba, Nova Scotia, Saskatchewan and British Columbia. In Saskatchewan and British Columbia ( two separate cases), plaintiffs seek class certification on behalf of individuals who suffer or have suffered from various diseases, including chronic obstructive pulmonary disease, emphysema, heart disease or cancer, after smoking defendants’ cigarettes. In the
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actions filed in Alberta, Manitoba and Nova Scotia, plaintiffs seek certification of classes of all individuals who smoked defendants’ cigarettes. In March 2019, all of these class actions were stayed as a result of three Canadian tobacco manufacturers ( no ne of which is related to us) seeking protection under Canada’s Companies’ Creditors Arrangement Act (which is similar to Chapter 11 bankruptcy in the United States). The companies entered into these proceedings following a Canadian appellate court upholding two smoking and health class action verdicts against those companies totaling approximately CAD $ 13 billion. In August 2025, a plan for those companies was implemented, under which those companies agreed, among other things, to pay an aggregate global settlement amount of CAD $ 32.5  billion to resolve all tobacco product-related claims and litigation in Canada. Under the plan, Altria and PM USA have obtained releases of claims and the related litigation against them will be dismissed. Pursuant to the indemnification obligations in the Distribution Agreement, neither Altria nor PM USA is responsible for any payments required to resolve the Canadian litigation. See Guarantees and Other Similar Matters below for a discussion of the Distribution Agreement between Altria and PMI, which provides for indemnities for certain liabilities concerning tobacco products.
Health Care Cost Recovery Litigation
Overview: In the health care cost recovery litigation, governmental entities seek reimbursement of health care cost expenditures allegedly caused by tobacco products and, in some cases, of future expenditures and damages. Relief sought by some but not all plaintiffs includes punitive damages, multiple damages and other statutory damages and penalties, injunctions prohibiting alleged marketing and sales to minors, disclosure of research, disgorgement of profits, funding of anti-smoking programs, additional disclosure of nicotine yields, and payment of attorney and expert witness fees.
Although there have been some decisions to the contrary, most judicial decisions in the United States have dismissed all or most health care cost recovery claims against cigarette manufacturers. Nine federal circuit courts of appeals and eight state appellate courts, relying primarily on grounds that plaintiffs’ claims were too remote, have ordered or affirmed dismissals of health care cost recovery actions. The U.S. Supreme Court has refused to consider plaintiffs’ appeals from the cases decided by five federal circuit courts of appeal.
In addition to the cases brought in the United States, health care cost recovery actions have been brought against tobacco industry participants, including PM USA and Altria, in Canada ( nine cases), and other entities have stated that they are considering filing such actions.
Since the beginning of 2008, the Canadian Provinces of British Columbia, New Brunswick, Newfoundland and Labrador, Quebec, Alberta, Manitoba, Saskatchewan, Prince Edward Island and Nova Scotia have brought health care reimbursement claims against cigarette manufacturers. PM USA is named as a defendant in the British Columbia and Quebec cases, while both Altria and PM USA are named as defendants in the New Brunswick, Newfoundland and Labrador, Alberta, Manitoba, Saskatchewan, Prince Edward Island and Nova Scotia cases. The Nunavut Territory and Northwest Territory have passed legislation permitting similar claims, but lawsuits based on this legislation have not been filed. All of these cases were stayed pending resolution of proceedings in Canada involving three tobacco manufacturers (none of which are affiliated with us) under the Companies’ Creditors Arrangement Act discussed above. As discussed above, in August 2025, a plan for those companies was implemented. See Smoking and Health Litigation - Other Smoking and Health Class Actions above for a discussion of these proceedings. See Guarantees and Other Similar Matters below for a discussion of the Distribution Agreement between Altria and PMI that provides for indemnities for certain liabilities concerning tobacco products.
Settlements of Health Care Cost Recovery Litigation: In November 1998, PM USA and certain other tobacco product manufacturers entered into the Master Settlement Agreement (the “MSA”) with 46 states, the District of Columbia and certain United States territories to settle asserted and unasserted health care cost recovery and other claims. PM USA and certain other tobacco product manufacturers had previously entered into agreements to settle similar claims brought by the States of Mississippi, Florida, Texas and Minnesota (together with the MSA, the “State Settlement Agreements”). The State Settlement Agreements require that the original participating manufacturers or “OPMs” (now PM USA, R.J. Reynolds and, with respect to certain brands, ITG Brands, LLC (“ITG”)) make annual payments of approximately $ 10.4 billion, subject to adjustments for several factors, including inflation, market share and industry volume. For the three months ended March 31, 2026 and 2025, the aggregate amount recorded in cost of sales with respect to the State Settlement Agreements was approximately $ 700  million for each period. These amounts include PM USA’s estimate of amounts related to NPM Adjustments discussed below.
Non-Participating Manufacturer (“NPM”) Adjustment Disputes: The “NPM Adjustment” is a reduction in MSA payments made by the OPMs and those manufacturers that are subsequent signatories to the MSA (collectively, the “participating manufacturers” or “PMs”) that applies if the PMs collectively lose at least a specified level of market share to non-participating manufacturers since 1997, subject to certain conditions and defenses. The applicability of this reduction has been subject to certain disputes, some of which have been resolved via settlement, as discussed below.
Settlements of NPM Adjustment Disputes .
▪ Multi-State Settlement . As of December 2025, a total of 39 states and territories had joined the multi-state settlement. Pursuant to this settlement, PM USA has received $ 1.47 billion since 2014 and expects to receive annual credits applied against PM USA’s MSA payments through 2041.
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▪ New York Settlement. In 2015, PM USA entered into a separate NPM Adjustment settlement in which PM USA settled the NPM Adjustment disputes with the State of New York in perpetuity. PM USA has received $ 646 million pursuant to the New York settlement and expects to receive annual credits applied against the MSA payments due to the State of New York going forward.
▪ Montana Settlement . In 2020, PM USA entered into a separate NPM Adjustment settlement in which PM USA settled the NPM Adjustment disputes with the State of Montana through 2030, resulting in a payment from PM USA to the State of Montana for an insignificant amount.
▪ Massachusetts Settlement . In 2024, PM USA entered into a separate NPM Adjustment settlement in which PM USA settled the NPM Adjustment disputes with the Commonwealth of Massachusetts through 2011. As a result of this settlement, PM USA received $ 28 million as a credit against its April 2026 MSA payment to the Commonwealth of Massachusetts. PM USA recorded $ 28 million as a reduction in costs of sales in the third quarter of 2024.
▪ Washington Settlement. In 2025, PM USA entered into a separate NPM Adjustment settlement in which PM USA settled the NPM Adjustment disputes with the State of Washington through 2015. As a result of this settlement, PM USA received $ 53 million as a credit against its April 2026 MSA payment to the State of Washington. In addition to the amounts recorded in the fourth quarter of 2023 discussed below in connection with the 2005 through 2007 NPM Adjustments, PM USA recorded a $ 22 million reduction in costs of sales and $ 4  million of interest expense in the fourth quarter of 2025.
▪ U.S. Territories Settlement . In 2025, PM USA entered into a separate NPM Adjustment settlement in which PM USA settled the NPM Adjustment disputes with American Samoa, Guam, the Commonwealth of the Northern Mariana Islands and the U.S. Virgin Islands through 2024. As a result of this settlement, PM USA received a credit in an insignificant amount applied against its April 2026 MSA payment to those territories. PM USA recorded an insignificant amount as a reduction in cost of sales in the third quarter of 2025.
Continuing NPM Adjustment Disputes with States That Have Not Settled .
▪ 2004 NPM Adjustment. The PMs and 10 states that had not settled the NPM Adjustment disputes for 2004 participated in a multi-state arbitration. The arbitration panel found three of these states (Washington, Missouri and New Mexico) were not diligent in the enforcement of their escrow statutes in 2004, and PM USA received approximately $ 52 million on account of the 2004 NPM Adjustment as a credit against its April 2023 MSA payment. The State of New Mexico challenged the determination in its state court, and the trial court vacated the award. PM USA appealed, and the New Mexico Court of Appeals reinstated the award.
▪ 2005-2007 NPM Adjustments. The PMs and six states that had not settled the NPM Adjustment disputes are currently arbitrating certain NPM Adjustment disputes before a single arbitration panel. The arbitration encompasses three years, 2005 through 2007, for five of the six states, and one year , 2005, for one state. As of April 27, 2026, the arbitration panel found the States of Maryland, Wisconsin and Ohio diligent for all three years , the State of Washington not diligent for all three years and the State of Missouri not diligent for 2005. The State of Washington subsequently settled, as discussed above. PM USA recorded $ 14 million as a reduction in costs of sales and $ 21  million as interest income in the fourth quarter of 2023 for its estimate of the minimum amount of the 2005 through 2007 NPM Adjustments it will receive related to the Washington finding. PM USA recorded an insignificant amount as a reduction in cost of sales in the first quarter of 2026 related to the Missouri finding.
▪ Subsequent Years. No assurance can be given as to when proceedings for 2008 and subsequent years will be scheduled or the precise form those proceedings will take.
Other Disputes under the State Settlement Agreements: The payment obligations of the tobacco product manufacturers that are parties to the State Settlement Agreements, as well as the allocations of any NPM Adjustments and related settlements, have been and may continue to be affected by R.J. Reynolds’s acquisition of Lorillard Tobacco Company in 2015 and its related sale of certain cigarette brands to ITG (the “ITG transferred brands”). PM USA continues to dispute how the ITG transferred brands are treated in allocating the NPM Adjustments and profit adjustments under the State Settlement Agreements.
In December 2019, the State of Mississippi filed a motion in Mississippi state court seeking to enforce the Mississippi State Settlement Agreement against PM USA, R.J. Reynolds and ITG concerning the tax rates used in the annual calculation of the net operating profit adjustment payments starting in 2018. In September 2024, PM USA and the State of Mississippi settled their dispute over the profit adjustment payments. Pursuant to the settlement, PM USA paid $ 7 million to the State of Mississippi for 2018 through 2023. Accordingly, PM USA recorded $ 5  million of expense to cost of sales and $ 2 million of interest expense in the third quarter of 2024.
In May 2023, PM USA and R.J. Reynolds filed a motion in the U.S. District Court for the Eastern District of Texas seeking to enforce the Texas State Settlement Agreement against the State of Texas concerning the same tax rate issue raised by the State of Mississippi. The State of Texas filed a cross-motion to enforce, and the court found in favor of the State of Texas. In March 2025, the court issued a final order in the matter, finding that PM USA owes $ 31 million to the State of Texas, plus pre- and post-judgment interest. PM USA has appealed, and the appeal remains pending.
In July 2024, the State of Minnesota filed a motion in Minnesota state court seeking to enforce the Minnesota State Settlement Agreement against PM USA, R.J. Reynolds and ITG concerning the same tax rate issues raised by the States of Mississippi and Texas.
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The court found in favor of the State of Minnesota. In October 2025, the court issued an order as to damages, finding that PM USA owes the State of Minnesota $ 10 million plus pre- and post-judgment interest. PM USA has appealed, and the appeal remains pending.
E-vapor Product Litigation
We have been named as defendants in federal class action lawsuits, individual lawsuits and “third party” lawsuits relating to JUUL e-vapor products, which include school districts, state and local governments and tribal and healthcare organization lawsuits. We refer to this litigation in the United States collectively as the “Multidistrict Litigation.” The theories of recovery in the Multidistrict Litigation include violation of RICO, fraud, failure to warn, design defect, negligence, public nuisance and unfair trade practices. Plaintiffs seek various remedies, including compensatory and punitive damages, restitution or remediation (for plaintiffs that are government entities) and an injunction prohibiting product sales. We also have been named as defendants in a group of cases pending in a consolidated California state court proceeding.
In May 2023, we reached agreement on terms to resolve the majority of the Multidistrict Litigation lawsuits as well as the majority of the group of cases pending in the consolidated California state court proceeding for $ 235 million, for which amount we recorded a pre-tax provision in the second quarter of 2023. In March 2024, the court granted final approval of the class action settlement, and we paid the settlement amount in the second quarter of 2024. The settlement applies to all of the Multidistrict Litigation except 11 individual cases that opted out of the settlement, all of the consolidated California cases except nine individual cases that opted out of the settlement and 38 “third party” cases brought by Native American tribes. We separately agreed to settle the cases brought by Native American tribes in July 2024, and these cases have been dismissed. We recorded a pre-tax provision for $ 20 million in the second quarter of 2024 related to the Native American tribes settlement and paid the settlement amount in October 2024. Neither settlement applies to four class action lawsuits pending in Canada or 17 putative class action antitrust lawsuits. For a description of the antitrust cases not subject to the settlement, see Antitrust Litigation below.
E-vapor Patent Litigation
JUUL Patent Litigation: In June 2023, JUUL and VMR Products LLC (“VMR”) filed a lawsuit against Altria and our affiliates AGDC, ALCS, NJOY Holdings, Inc. (“NJOY Holdings”) and NJOY in the U.S. District Court for the District of Arizona asserting claims of patent infringement based on the sale of NJOY ACE in the United States. Plaintiffs seek various remedies, including damages and an injunction on sales of NJOY ACE . The lawsuit is currently stayed.
Also in June 2023, the same plaintiffs filed a related action against the same defendants with the ITC. There, the plaintiffs also allege patent infringement, but the remedies sought include an exclusion order that would prohibit the importation of NJOY ACE into the United States. No damages are recoverable in the proceedings before the ITC. In January 2025, following an initial determination by the Administrative Law Judge (“ALJ”), the ITC issued its final determination finding that NJOY ACE infringes the four patents plaintiffs asserted and issued an exclusion order and cease-and-desist orders prohibiting the importation and sale of NJOY ACE in the United States. The orders became effective on March 31, 2025. We have appealed the orders to the U.S. Court of Appeals for the Federal Circuit. The orders will remain in effect during the pendency of the appeal.
In November and December 2023 and February 2024, Altria and our affiliates filed petitions with the U.S. Patent Office Patent Trial and Appeal Board (“PTAB”) challenging the validity of the patents underlying JUUL and VMR’s patent infringement claims. In May, June and August 2024, the PTAB denied Altria’s requests to institute review as to four patents (including three of the patents that form the basis of the ITC’s final determination) and, in June 2024, granted Altria’s request to institute review as to one of the patents that forms the basis of the ITC’s final determination. In June 2025, the PTAB issued its decision concluding that the patent it reviewed was valid. We have appealed the PTAB’s decision to the U.S. Court of Appeals for the Federal Circuit.
In August 2023, NJOY filed a complaint against JUUL in the U.S. District Court for the District of Delaware asserting claims of patent infringement based on the sale of certain JUUL e-vapor products, including the currently marketed JUUL device and JUULpods , in the United States. The lawsuit was stayed pending the final determination of an ITC investigation NJOY filed against JUUL in August 2023 (discussed below). In October 2025, after the final determination of the corresponding ITC investigation, NJOY moved to lift the stay, and the court granted the motion. JUUL subsequently moved to re-stay the case, which was denied. Trial currently is set for June 2027.
Also in August 2023, NJOY filed a related action against JUUL with the ITC alleging patent infringement and seeking a ban on the importation and sale of the same JUUL products in the United States. In December 2024, the ALJ issued an initial determination concluding that, while the patents NJOY asserted against JUUL are valid, JUUL products do not infringe the patents. On review, the ITC affirmed the ALJ’s initial determination that the JUUL products do not infringe the asserted patents and terminated the investigation. In May 2025, we appealed the ITC’s final determination to the U.S. Court of Appeals for the Federal Circuit. Subsequently, in July 2025, we voluntarily dismissed the appeal and, in October 2025, moved to lift the stay on NJOY’s lawsuit against JUUL in the U.S. District Court for the District of Delaware (discussed above).
In November 2023, JUUL filed petitions with the PTAB challenging the validity of the patents underlying NJOY’s patent infringement claims. In May 2024, the PTAB agreed to review JUUL’s challenge to both of the NJOY patents asserted against JUUL. In May 2025, the PTAB issued its decision concluding that the patents it reviewed were valid. The deadline to appeal the PTAB’s decision has passed, and JUUL did not appeal.
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In August 2025, JUUL filed an additional lawsuit against Altria and our affiliates AGDC, ALCS, NJOY Holdings and NJOY in the U.S. District Court for the District of Arizona asserting claims of patent infringement based on the sale of NJOY Daily in the United States. Plaintiff seeks various remedies, including damages and an injunction on sales of NJOY Daily and any other products NJOY may be developing or preparing for commercialization in the United States that would infringe JUUL’s patent.
Also in August 2025, JUUL filed a related action against the same defendants with the ITC. There, JUUL also alleges patent infringement, but the remedies sought include an exclusion order that would prohibit the importation into the United States of NJOY Daily and any other products NJOY may be developing or preparing for commercialization in the United States that would infringe JUUL’s patent. No damages are recoverable in the proceedings before the ITC. In April 2026, the ALJ granted NJOY’s motion for summary determination, finding that the sole patent that forms the basis of JUUL’s action is invalid. JUUL has petitioned the ITC to review the ALJ’s initial determination.
In November 2025, Altria, AGDC, ALCS, NJOY Holdings and NJOY sued the ITC and the ALJ in the U.S. District Court for the Eastern District of Virginia, seeking to enjoin the ITC and ALJ from adjudicating JUUL’s action. The lawsuit asserts that Altria and our affiliates are entitled to have JUUL’s claims heard in a federal court and be tried to a jury, and that the ALJ is unconstitutionally appointed and shielded from removal by the President. Altria and our affiliates have moved for summary judgment and a preliminary injunction. Also in November 2025, NJOY Holdings and NJOY filed a petition with PTAB challenging the validity of the patent underlying JUUL’s August 2025 actions. In April 2026, PTAB issued a discretionary denial of that petition, refusing to reach the merits of whether JUUL’s patent is valid.
In September 2025, NJOY, ALCS, and AGDC filed an action against JUUL with the ITC alleging patent infringement and seeking a ban on the importation and sale of the same JUUL products in the United States. A hearing before the ALJ is scheduled for September 2026, and we expect an initial determination from the ALJ in December 2026, subject to the ALJ’s ability to grant himself an extension. The ALJ’s recommendation will be reviewed by the ITC, and we expect the ITC’s final determination in April 2027, subject to the ITC’s right to grant itself an extension.
R.J. Reynolds Patent Litigation: ALCS filed a lawsuit against R.J. Reynolds in the U.S. District Court for the Middle District of North Carolina alleging patent infringement by R.J. Reynolds’ e-vapor products. In September 2022, a jury awarded ALCS $ 95  million in damages for past infringement, plus supplemental damages and interest. In January 2023, the court ordered R.J. Reynolds to pay ALCS a 5.25 % royalty on future sales of its infringing product resulting in positive net income through the expiration of the relevant patents in 2035. R.J. Reynolds filed a notice of appeal of the judgment to the U.S. Court of Appeals for the Federal Circuit, which affirmed the judgment in December 2024. In August 2025, R.J. Reynolds petitioned the U.S. Supreme Court to review the federal appellate court’s affirmance of the federal district court’s judgment. In October 2025, the U.S. Supreme Court denied R.J. Reynolds’ petition.
In July 2024, R.J. Reynolds moved the district court to vacate the judgment, including the damages awards and ongoing royalties, on the grounds that R.J. Reynolds obtained a sublicense to the asserted patents from JUUL in December 2023. In December 2024, the district court denied the motion as to the damages award and royalties due through December 2023. The district court also found that additional proceedings were warranted on the part of the motion regarding royalties after R.J. Reynolds obtained the sublicense. The district court’s evidentiary hearing occurred in April 2026. Any gains related to this lawsuit remain subject to these district court proceedings. Accordingly, they have not yet been determined to be realized or realizable in accordance with GAAP and have not been recognized in our condensed consolidated financial statements.
Antitrust Litigation
In March 2023, we entered into a stock transfer agreement with JUUL pursuant to which, among other things, we transferred to JUUL all of our beneficially owned JUUL equity securities.
As of April 27, 2026, 17 putative class action lawsuits have been filed against Altria and JUUL in the U.S. District Court for the Northern District of California. In November 2020, these lawsuits were consolidated into three complaints (one on behalf of direct purchasers, one on behalf of indirect purchasers and one on behalf of indirect resellers). The consolidated lawsuits, as amended, allege that Altria and JUUL violated Sections 1, 2 and/or 3 of the Sherman Antitrust Act of 1890 and Section 7 of the Clayton Antitrust Act and various state antitrust and consumer protection laws by restraining trade and/or substantially lessening competition in the U.S. closed-system electronic cigarette market. Plaintiffs seek various remedies, including treble damages, attorneys’ fees, a declaration that the agreements between Altria and JUUL are invalid and rescission of the transaction. In February 2024, the court ordered that certain of the direct-purchaser plaintiffs’ claims against JUUL be sent to arbitration pursuant to an arbitration provision in JUUL’s online purchase agreement and dismissed without prejudice the direct-purchaser plaintiffs’ claims for injunctive relief. In April 2025, plaintiffs voluntarily dismissed all monopolization claims and all claims against the Altria defendants under California’s Unfair Competition Law. In February 2026, the U.S. District Court for the Northern District of California certified three classes of plaintiffs (one of direct purchasers, one of indirect purchasers and one of indirect resellers). In March 2026, Altria and JUUL filed a petition with the Ninth Circuit Court of Appeals seeking discretionary review of the class certification decision, which the court granted in April 2026. The trial with respect to the remaining claims in the consolidated lawsuits currently is set to commence in September 2026.
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Certain Other Tobacco-Related Litigation
“Lights/Ultra Lights” Cases and Other Smoking and Health Class Actions: Plaintiffs have sought certification of their cases as class actions, alleging among other things, that the uses of the terms “Lights” and/or “Ultra Lights” constitute deceptive and unfair trade practices, common law or statutory fraud, unjust enrichment or breach of warranty, and have sought injunctive and equitable relief, including restitution and, in certain cases, punitive damages. These class actions have been brought against PM USA and, in certain instances, Altria or our other subsidiaries, on behalf of individuals who purchased and consumed various brands of cigarettes. Defenses raised in these cases include lack of misrepresentation, lack of causation, injury and damages, the statute of limitations, non-liability under state statutory provisions exempting conduct that complies with federal regulatory directives, and the First Amendment. Twenty-one state courts in 23 “Lights” cases have refused to certify class actions, dismissed class action allegations, reversed prior class certification decisions or have entered judgment in favor of PM USA. As of April 27, 2026, two “Lights/Ultra Lights” class actions are pending in U.S. state courts. Neither case is active.
As of April 27, 2026, one smoking and health case alleging personal injury or seeking court-supervised programs or an ongoing medical monitoring program on behalf of individuals exposed to ETS and purporting to be brought on behalf of a class of individual plaintiffs, is pending in a U.S. state court. The case is currently inactive.
Environmental Regulation
Altria and our former subsidiaries are subject to various federal, state and local laws and regulations concerning the discharge of materials into the environment, or otherwise related to environmental protection, including, in the United States: the Clean Air Act, the Clean Water Act, the Resource Conservation and Recovery Act and the Comprehensive Environmental Response, Compensation and Liability Act (commonly known as “Superfund”), which can impose joint and several liability on each responsible party. Altria and our former subsidiaries are involved in several cost recovery/contribution cases subjecting them to potential costs of remediation and natural resource damages under Superfund or other laws and regulations. We expect to continue to make capital and other expenditures in connection with environmental laws and regulations.
We provide for expenses associated with environmental remediation obligations on an undiscounted basis when such amounts are probable and can be reasonably estimated. Such accruals are adjusted as new information develops or circumstances change. Other than those amounts, it is not possible to reasonably estimate the cost of any environmental remediation and compliance efforts that we may undertake in the future. In the opinion of our management, however, compliance with environmental laws and regulations, including the payment of any remediation costs or damages and the making of related expenditures, has not had a material adverse effect on our condensed consolidated results of operations, capital expenditures, financial position or cash flows.
Guarantees and Other Similar Matters
In the ordinary course of business, we have agreed to indemnify a limited number of third parties in the event of future litigation. Additionally, we provide certain guarantees to a limited number of third parties related to contractual obligations. At March 31, 2026, we had $ 43 million of unused letters of credit obtained in the ordinary course of business. These items have not had, and are not expected to have, a significant impact on our liquidity.
Under the terms of a distribution agreement between Altria and PMI (“Distribution Agreement”), entered into as a result of our 2008 spin-off of our former subsidiary PMI, liabilities concerning tobacco products will be allocated based in substantial part on the manufacturer. PMI will indemnify Altria and PM USA for liabilities related to tobacco products manufactured by PMI or contract manufactured for PMI by PM USA, and PM USA will indemnify PMI for liabilities related to tobacco products manufactured by PM USA, excluding tobacco products contract manufactured for PMI. We do not have a related liability recorded on our condensed consolidated balance sheet at March 31, 2026 as the fair value of this indemnification is insignificant.
As part of our supplier financing program, Altria guarantees the financial obligations of ALCS under the financing program agreement.
PM USA guarantees our obligations under our outstanding debt securities, any borrowings under our $ 3.0 billion Credit Agreement and any amounts outstanding under our commercial paper program.

Note 13. Additional Financial Statement Information
Share Repurchases
In January 2025, our Board of Directors (“Board” or “Board of Directors”) authorized a $ 1.0 billion share repurchase program that it expanded to $ 2.0 billion in October 2025. At March 31, 2026, we had $ 720 million remaining under this program, which expires on December 31, 2026. Share repurchases depend on marketplace conditions and other factors, and the program remains subject to the discretion of our Board.
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Our share repurchase activity was as follows:

For the Three Months Ended March 31,
(in millions, except per share data) 2026

2025
Total number of shares repurchased 4.5   5.7  
Aggregate cost of shares repurchased $ 280   $ 326  
Average price per share of shares repurchased $ 62.33   $ 56.97  

Cash, Cash Equivalents and Restricted Cash
A reconciliation of cash, cash equivalents and restricted cash on our condensed consolidated balance sheets to the amounts reported in our condensed consolidated statements of cash flows is as follows:

March 31, 2026 December 31, 2025
Cash and cash equivalents $ 3,531   $ 4,474  
Restricted cash included in other current assets 5   7  
Restricted cash included in other assets 14   11  
Cash, cash equivalents and restricted cash $ 3,550   $ 4,492  

Restricted cash consisted primarily of cash deposits collateralizing appeal bonds posted by PM USA to obtain stays of judgments pending appeals. See Note 12. Contingencies .
Receivables
We record receivables net of the cash discounts on our condensed consolidated balance sheets. At March 31, 2026, December 31, 2025 and December 31, 2024, receivables were $ 284 million, $ 263 million and $ 177 million, respectively.
Deferred Revenue
We record deferred revenue when our businesses receive payment in advance of product shipment, which we include in other accrued liabilities on our condensed consolidated balance sheets until revenue is recognized, and our companies typically satisfy their performance obligations within three days of receiving payment. At March 31, 2026, December 31, 2025 and December 31, 2024, deferred revenue was $ 169  million, $ 231 million and $ 215 million, respectively. At March 31, 2026, December 31, 2025 and December 31, 2024, there were no differences between amounts recorded as deferred revenue from contracts with customers and amounts subsequently recognized as revenue.
Supplier Financing
We facilitate a voluntary supplier financing program through a third-party intermediary under which participating suppliers may elect to sell receivables due from us to participating third-party financial institutions at the sole discretion of both the suppliers and the financial institutions. At March 31, 2026 and December 31, 2025, confirmed outstanding obligations under the supplier financing program, which are recorded in accounts payable on our condensed consolidated balance sheets, were $ 157  million and $ 159 million, respectively.

Note 14. New Accounting Guidance Not Yet Adopted
The following table provides a description of issued accounting guidance applicable to, but not yet adopted by, us:

Standards Description Effective Date for Public Entity Effect on Financial Statements
ASU Nos. 2024-03 and 2025-01 Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses The guidance will require additional disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. The guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. We are in the process of evaluating the impact of this guidance on our disclosures.
ASU No. 2025-06 Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software The guidance replaces the current framework that is based on software development project stages with updated criteria, focused on management’s authorization and the probability of project completion, to determine the timing for cost capitalization. The guidance is effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years. We are in the process of evaluating the impact of this guidance on our consolidated financial statements and related disclosures.

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Standards Description Effective Date for Public Entity Effect on Financial Statements
ASU No. 2025-07 Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract The guidance refines the scope of Topic 815 by excluding from derivative accounting non-exchange trading contracts that have underlyings based on operations or activities specific to one of the parties to the contract with certain exceptions and clarifies the applicability of Topic 606 to share-based noncash consideration received from a customer in exchange for goods or services. The guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within those fiscal years. We are in the process of evaluating the impact of this guidance on our consolidated financial statements and related disclosures.
ASU No. 2025-09 Derivatives and Hedging (Topic 815): Hedge Accounting Improvements The guidance includes expanding eligibility for cash flow hedges of groups of forecasted transactions, introducing a model for hedging forecasted interest payments on “choose-your-rate” debt instruments, permitting designation of variable price components in forecasted purchases or sales of nonfinancial assets and clarifying guidance for net investment hedges and dual hedge strategies. The guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within those fiscal years. We are in the process of evaluating the impact of this guidance on our consolidated financial statements and related disclosures.
ASU No. 2025-11 Interim Reporting (Topic 270): Narrow-Scope Improvements The guidance clarifies interim disclosure requirements, provides a comprehensive list of disclosures required by GAAP and includes a disclosure principle for events since the last annual reporting period to enhance consistency in interim reporting. The guidance is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. We are in the process of evaluating the impact of this guidance on our interim condensed consolidated financial statements and related disclosures.
ASU No. 2025-12 Codification Improvements The guidance provides changes that clarify, correct errors or make minor improvements to GAAP. The guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within those fiscal years. We are in the process of evaluating the impact of this guidance on our consolidated financial statements and related disclosures.

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 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
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(“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 first 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 increasing to an average of $3.64 per gallon during March. The increase in gas prices contributed to elevated inflation in March of 3.3%, above the Federal Reserve’s 2% target and the highest level since early 2024. These macroeconomic pressures were partially offset by incremental near-term liquidity support, as Internal Revenue Service data indicates average tax refunds through the end of March increased versus the prior year.
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 first quarter of 2026, the discount retail share of the cigarette category reached 33.3%, an increase of 2.4 share points versus the first quarter of 2025 and 0.5 share points sequentially. 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 first quarter of 2026 to 58.1% of the U.S. oral tobacco category, an increase of 9.1 share points versus the first quarter of 2025. When adjusted for trade inventory movements, our smokeable products segment domestic cigarette shipment volume declined by an estimated 4% in the first quarter of 2026 versus the first quarter of 2025. When adjusted for trade inventory movements, total estimated domestic cigarette industry volume declined by 5% in the first quarter of 2026 versus the first quarter of 2025. In the fourth quarter of 2025, we estimated the industry decline rate to be 6.5% versus the fourth quarter of 2024. We believe that the 1.5 percentage points change in the domestic cigarette industry volume decline rate in the first quarter of 2026 was due primarily to reduced cross-category movement between cigarettes and illicit flavored disposable e-vapor products. 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.
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. Despite these enforcement measures, 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.
Additionally, we continue to see increased illicit activity across multiple nicotine categories, including nicotine pouch products and cigarettes. In 2026, traditional tobacco retailers continued to carry various synthetic oral nicotine pouch products. We continue to track the overall dynamics across multiple nicotine categories as well as competitive threats to our brands.
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 work to mitigate the potential negative impacts of these 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.
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Consolidated Results of Operations for the Three Months Ended March 31, 2026
The changes in net earnings and diluted EPS for the three months ended March 31, 2026, from the three months ended March 31, 2025, were due primarily to the following:

(in millions, except per share data) Net Earnings Diluted EPS
For the three months ended March 31, 2025
$ 1,077  $ 0.63 

2025 Acquisition-related items
65  0.04 
2025 Asset impairment, exit and implementation costs
884  0.52 
2025 Tobacco and health and certain other litigation items
30  0.02 
2025 Amortization of intangibles
31  0.02 
2025 ABI-related special items
17  0.01 
2025 Cronos-related special items
(18) (0.01)
2025 Income tax items
3  — 
Subtotal 2025 special items
1,012  0.60 
2026 NPM Adjustment Items
9   —  
2026 Acquisition-related items
(2) —  
2026 Asset impairment, exit and implementation costs
(5) —  
2026 Tobacco and health and certain other litigation items
(2) —  
2026 Amortization of intangibles
(20) (0.01)
2026 ABI-related special items
(1) —  
2026 Cronos-related special items
(2) —  
2026 Income tax items
(12) (0.01)
Subtotal 2026 special items
(35) (0.02)
Fewer shares outstanding —   0.01  
Change in tax rate 11   0.01  
Operations 118   0.07  
For the three months ended March 31, 2026
$ 2,183   $ 1.30  

2026 Reported Net Earnings and Reported Diluted EPS
$ 2,183   $ 1.30  
2025 Reported Net Earnings and Reported Diluted EPS
$ 1,077  $ 0.63 
% Change 100%+ 100%+

2026 Adjusted Net Earnings and Adjusted Diluted EPS
$ 2,218   $ 1.32  
2025 Adjusted Net Earnings and Adjusted Diluted EPS
$ 2,089  $ 1.23 
% Change 6.2   % 7.3   %

For a discussion of special items and other business drivers affecting the comparability of statements of earnings amounts and reconciliations of adjusted 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.
▪ Operations: The increase of $118 million in operations (which excludes the impact of special items shown in the table above) was due primarily to higher OCI.
For further details, see Consolidated Operating Results and Operating Results by Business Segment below .

Non-GAAP Financial Measures
We report our financial results in accordance with GAAP. However, our management also reviews certain financial results, including OCI, OCI margins, net earnings and diluted EPS, on an adjusted basis, which excludes certain income and expense items that our management believes are not part of underlying operations. These items may include, for example, loss on early extinguishment of debt, restructuring charges, asset impairment charges, acquisition, disposition and integration-related items, equity investment-related special items, certain income tax items, charges associated with tobacco and health and certain other litigation items, resolutions of certain non-participating manufacturer (“NPM”) adjustment disputes under the Master Settlement Agreement (“NPM Adjustment Items”) and amortization expense associated with definite-lived intangible assets (“amortization of intangibles”). While amortization of intangibles is excluded from our adjusted financial measures, net revenues generated from these definite-lived intangible assets during the periods
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presented, if applicable, are included in our adjusted financial measures. In addition, our management reviews the ratio of debt-to-Consolidated EBITDA, which we use as a factor to determine our ability to access the capital markets and make investments in pursuit of our Vision. Consolidated EBITDA is calculated in accordance with our Credit Agreement (defined below in Liquidity and Capital Resources ) and includes certain adjustments. Our management does not view any of these special items to be part of our underlying results as they may be highly variable, may be unusual or infrequent, are difficult to predict and can distort underlying business trends and results. Our management also reviews income tax rates on an adjusted basis, which may exclude certain income tax items from our reported effective tax rate.
Our management believes that the foregoing financial measures provide useful additional insight into underlying business trends and results, and provide a more meaningful comparison of year-over-year results. Our management uses these financial measures and regularly provides these to our chief operating decision maker (“CODM”) for planning, forecasting and evaluating business and financial performance, including allocating capital and other resources and evaluating results relative to employee compensation targets. The foregoing 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. The foregoing 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. When we provide a non-GAAP measure in this Form 10-Q, we also provide a reconciliation of that non-GAAP financial measure to the most directly comparable GAAP financial measure.

Discussion and Analysis

Our critical accounting policies and estimates are discussed in our 2025 Form 10-K; there have been no updates to these critical accounting estimates, except as noted below.
Critical Accounting Estimates
Goodwill and Other Intangible Assets Impairment Testing
We conduct a required annual review of goodwill and indefinite-lived intangible assets for potential impairment as of October 1 of each year, in accordance with our accounting policy, and more frequently if an event occurs or circumstances change that would require an interim quantitative impairment assessment. There have been no events or changes in circumstances that indicate an interim quantitative impairment assessment was required as of March 31, 2026.
E-Vapor Reporting Unit Goodwill
In 2025, we recorded impairments of the values of the goodwill and other intangible assets within our e-vapor reporting unit as a result of the U.S. International Trade Commission (“ITC”) exclusion order and cease-and-desist orders prohibiting the importation and sale of NJOY ACE into the United States and our expectation that effective enforcement against illicit flavored disposable e-vapor products would occur more gradually than initially anticipated. As of December 31, 2025, the estimated fair value and carrying value of the e-vapor goodwill was $610 million after recording impairments during the first and fourth quarters of 2025. In addition, the carrying value of the e-vapor reporting unit’s net assets (including the effect of intercompany debt), which was negative, approximated its estimated fair value.
We believe that the estimated fair value of the e-vapor reporting unit at December 31, 2025 remains reasonable and there are no events or circumstances indicating an impairment for the three months ended March 31, 2026. Fair value calculations are sensitive to changes in certain judgments and assumptions. The significant judgments and assumptions that drive the fair value of the reporting unit are the (i) timing and extent of effective enforcement against illicit flavored disposable e-vapor products; (ii) timing and likelihood of regulatory authorizations of e-vapor products, including of NJOY’s products; (iii) timing of the commercialization of NJOY e-vapor products in the United States; (iv) long-term growth of the e-vapor category; and (v) conversion rates of illicit flavored disposable e-vapor consumers to FDA-authorized e-vapor products and, specifically, NJOY’s e-vapor products. Fair value calculations can be negatively affected by changes in these judgments and assumptions, some of which relate to broader macroeconomic conditions and governmental actions outside of our control. If these assumptions or judgments regarding the expectations for the future state of the e-vapor category and NJOY’s business fail to materialize as anticipated, if we experience unfavorable outcomes with respect to litigation proceedings (including actions alleging patent infringement), or if the discount rate used to estimate the fair value increases, we could have additional non-cash impairments of our e-vapor reporting unit goodwill in future periods, which could be material. Based on our 2025 annual impairment test, a hypothetical 1% increase in the discount rate used to estimate the fair value of the e-vapor reporting unit would have resulted in a goodwill impairment charge of approximately $150 million. For further discussion of these factors, see Operating Results by Business Segment - Business Environment below.
Skoal Trademark Indefinite-Lived Intangible Asset
At December 31, 2025, the estimated fair value of the Skoal trademark exceeded its carrying value by approximately 7% ($0.3 billion). MST products, including Skoal , continued to be negatively impacted due in part to evolving adult nicotine consumer preferences, which have continued to contribute to reductions in sales volumes for MST products, including Skoal . For further discussion, see Trends and Developments above and Operating Results by Business Segment - Business Environment - Summary below.
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We believe that the estimated fair value of the Skoal trademark at December 31, 2025 remains reasonable and there are no events or circumstances indicating an impairment for the three months ended March 31, 2026. If the decline in sales volume for Skoal is higher than currently estimated and results in material revenue declines, we believe there may be a material adverse effect on the significant assumptions used in performing our valuation. If Skoal ’s actual revenue and income or long-term outlook are significantly unfavorable compared to forecasted performance used to estimate the fair value or if the discount rate used to estimate the fair value increases, we could have material non-cash impairments of the Skoal trademark in future periods. Based on the 2025 annual impairment test, a hypothetical 1% increase in the discount rate used to estimate the fair value of Skoal trademark would have resulted in an impairment charge of approximately $90 million. For further discussion of these factors, see Operating Results by Business Segment - Business Environment below.
For further discussion of goodwill and other intangible assets see Note 2. Goodwill and Other Intangible Assets, net (“Note 2”).

Consolidated Operating Results

For the Three Months Ended March 31,
(in millions) 2026 2025
Net Revenues:
Smokeable products $ 4,758   $ 4,622 
Oral tobacco products 669   654 
All other 1   (17)
Net revenues $ 5,428   $ 5,259 
Excise Taxes on Products:
Smokeable products $ 648   $ 715 
Oral tobacco products 22   25 

Excise taxes on products $ 670   $ 740 
Operating Income:
OCI:
Smokeable products $ 2,673   $ 2,469 
Oral tobacco products 435   433 

All other (76) (1,014)
Amortization of intangibles (23) (37)
General corporate expenses (53) (63)
Operating income $ 2,956   $ 1,788 

As discussed further in Note 9. Segment Reporting (“Note 9”), our CODM reviews OCI, which is defined as operating income before general corporate expenses and amortization of intangibles, to evaluate the performance of, and allocate resources to, our segments. Our management believes it is appropriate to disclose this measure to help investors analyze our business performance and trends.
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The following table provides a reconciliation of adjusted net earnings and adjusted diluted EPS for the three months ended March 31:

(in millions of dollars, except per share data) Earnings before Income Taxes Provision for Income Taxes Net Earnings Diluted
EPS
2026 Reported
$ 2,859   $ 676   $ 2,183   $ 1.30  
NPM Adjustment Items (11) (2) (9) —  
Acquisition-related items 2   —   2   —  
Asset impairment, exit and implementation costs 6   1   5   —  
Tobacco and health and certain other litigation items
2   —   2   —  
Amortization of intangibles 23   3   20   0.01  
ABI-related special items 1   —   1   —  
Cronos-related special items 2   —   2   —  
Income tax items —   (12) 12   0.01  
2026 Adjusted for Special Items
$ 2,884   $ 666   $ 2,218   $ 1.32  

2025 Reported
$ 1,683  $ 606  $ 1,077  $ 0.63 

Acquisition-related items 79  14  65  0.04 
Asset impairment, exit and implementation costs 888  4  884  0.52 
Tobacco and health and certain other litigation items 40  10  30  0.02 
Amortization of intangibles
37  6  31  0.02 
ABI-related special items 21  4  17  0.01 
Cronos-related special items (18) —  (18) (0.01)
Income tax items —  (3) 3  — 
2025 Adjusted for Special Items
$ 2,730  $ 641  $ 2,089  $ 1.23 

The following special items affected the comparability of statements of earnings amounts for the three months ended March 31, 2026 and 2025:
▪ Acquisition-Related Items: We recorded net pre-tax charges reflecting expenses primarily related to the ITC exclusion order and cease-and-desist orders prohibiting the importation and sale of NJOY ACE in the United States. These charges are net of any insurance recoveries from insurance contracts associated with the acquisition of NJOY Holdings, Inc. (“NJOY Transaction”). For further information on the ITC’s determination, see E-vapor Product Litigation - JUUL Patent Litigation in Note 12. Contingencies (“Note 12”) . We recorded these items as follows:

  For the Three Months Ended March 31,
(in millions) 2026 2025
Net revenues (1)
$ —   $ 34 
Cost of sales (1)
—   37 
Marketing, administration and research costs (2)
1   (17)
Total $ 1   $ 54 

(1) Included in our all other category.
(2) Recorded as general corporate expense. Amount is net of $22 million of insurance recoveries for the three months ended March 31, 2025. To date, we incurred total costs of $152 million, primarily associated with the ITC exclusion order and cease-and desist orders prohibiting the importation and sale of NJOY ACE in the United States and patent infringement lawsuits related to the NJOY Transaction, which were offset by insurance recoveries of $64 million.
Additionally, we recorded a non-cash, pre-tax charge of $25 million for the three months ended March 31, 2025 for the change in the fair value of the contingent payments associated with the NJOY Transaction, which was recorded as general corporate expense and included in marketing, administration and research costs in our condensed consolidated statements of earnings. For further information, see Contingent Payments in Note 5. Financial Instruments .
▪ Asset Impairment: We recorded a non-cash impairment charge of $873 million to reduce the carrying value of the e-vapor reporting unit goodwill to its estimated fair value for the three months ended March 31, 2025 in our all other category. For further discussion, see Note 2.
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▪ Tobacco and Health and Certain Other Litigation Items: For a discussion of tobacco and health and certain other litigation items and a breakdown of these costs by segment, see Note 12 and Tobacco and Health and Certain Other Litigation Items in Note 9, respectively.
▪ Amortization of Intangibles: We recorded pre-tax amortization expense of definite-lived intangible assets of $23 million and $37 million for the three months ended March 31, 2026 and 2025, respectively, in marketing, administration and research costs in our condensed consolidated statements of earnings.
Three Months Ended March 31, 2026 Compared with Three Months Ended March 31, 2025
Net revenues, which include excise taxes billed to customers, increased $169 million (3.2%), due primarily to higher net revenues in our smokeable products segment.
Cost of sales decreased $18 million (1.4%), due primarily to lower NJOY costs and lower shipment volume in our smokeable products segment, partially offset by higher manufacturing costs in our smokeable products segment.
Excise taxes on products decreased $70 million (9.5%), due primarily to 2026 refunds of taxes and duties paid on imported cigarettes and lower shipment volume in our smokeable products segment.
Marketing, administration and research costs decreased $38 million (6.5%), due primarily to lower tobacco and health and certain other litigation items, lower amortization of intangibles, lower general corporate expenses and lower costs related to our Optimize & Accelerate initiative (“Initiative”), partially offset by higher spending in our smokeable products and oral tobacco products segments.
Operating income increased $1,168 million (65.3%), due primarily to higher OCI (which includes the impact of a non-cash impairment of the e-vapor reporting unit goodwill in 2025).
(Income) losses from investments in equity securities were favorable $15 million (10.5%), due primarily to favorable results from our investment in ABI.
Reported net earnings of $2,183 million increased $1,106 million (100%+), due primarily to higher operating income. Reported basic and diluted EPS of $1.30, each increased by 100%+, due primarily to higher reported net earnings.
Adjusted net earnings of $2,218 million increased $129 million (6.2%), due primarily to higher OCI. Adjusted diluted EPS of $1.32 increased by 7.3%, due primarily to higher adjusted net earnings and fewer shares outstanding.

Operating Results by Business Segment

Business Environment
Summary
The U.S. nicotine industry faces a number of business, legal and regulatory challenges that have materially adversely affected and may continue to materially adversely affect our business, results of operations, cash flows or financial position or our ability to achieve our Vision. These challenges, some of which are discussed in more detail in Note 12, and in Part I, Item 1A Risk Factors in our 2025 Form 10-K, include:
▪ pending and threatened litigation and bonding requirements;
▪ restrictions and requirements imposed by the Family Smoking Prevention and Tobacco Control Act (“FSPTCA”) and restrictions and requirements (and related enforcement actions) that have been, and in the future will be, imposed by the FDA;
▪ the FDA’s failure to effectively address illicit nicotine products on the market, including illicit disposable e-vapor and oral nicotine pouch products;
▪ illicit trade in nicotine products, including cigarettes, e-vapor products and oral nicotine pouch products;
▪ actual and proposed excise tax increases, as well as changes in tax structures and tax stamping requirements;
▪ bans and restrictions on nicotine product use imposed by governmental entities and private establishments and employers;
▪ other federal, state and local government actions, including:
▪ restrictions on the sale of certain nicotine products, the sale of nicotine products by certain retail establishments, the sale of nicotine products with characterizing flavors and the sale of nicotine products in certain package sizes;
▪ additional restrictions on the advertising and promotion of nicotine products;
▪ other actual and proposed tobacco- or nicotine-related legislation and regulation;
▪ prohibitions on the sale of tobacco products based on environmental concerns and the imposition of responsibility on manufacturers for the disposal, recycling or other treatment of post-consumer goods such as plastic packaging; and
▪ governmental investigations;
▪ reductions in consumption levels of cigarettes and MST products resulting in lower shipment volumes;
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▪ increased efforts by tobacco control advocates and other private sector entities (including retail establishments) to further restrict the availability and use of nicotine products or the ability to communicate with adult consumers through third-party digital platforms;
▪ changes in adult nicotine consumer purchase behavior, which is influenced by various factors such as macroeconomic and geopolitical conditions (including inflation, tariffs and the economic impacts of international armed conflicts), the proliferation of illicit disposable e-vapor products, excise taxes and product price gap relationships, each of which has resulted and may in the future result in adult nicotine consumers switching to lower-priced nicotine products and lower shipment volumes;
▪ the highly competitive nature of all nicotine categories, including competitive disadvantages related to the impact on cigarette prices due to the settlement of certain healthcare cost recovery litigation, the growth of innovative nicotine products, such as e-vapor and oral nicotine pouch products, and the ability of competitors to receive refunds of certain duties, taxes and fees paid on imported tobacco products when offsetting volumes of those products or substantially similar products are subsequently exported;
▪ the growth of products using nicotine analogues that are designed to imitate the effects of nicotine but are not subject to the FDA regulatory framework for tobacco products; and
▪ potential adverse changes in prices, availability and quality of tobacco, other raw materials and component parts, including as a result of changes in macroeconomic, geopolitical, climate and environmental conditions.
We continue to monitor the evolving business, legal and regulatory challenges within our business environment to assess potential impacts on us. Changes in these and other conditions could have a material adverse effect on our business, results of operations, cash flows, financial position and our ability to achieve our Vision.
FSPTCA and FDA Regulation
▪ The Regulatory Framework: The FSPTCA and its related regulations establish broad FDA regulatory authority over all tobacco products and, among other provisions:
▪ impose restrictions on the advertising, promotion, sale and distribution of tobacco products (see Final Tobacco Marketing Rule below);
▪ establish premarket review pathways for new and modified tobacco products (see Premarket Review Pathways for Tobacco Products and Market Authorization Enforcement below);
▪ prohibit any express or implied claims that a tobacco product is or may be less harmful than other tobacco products without FDA authorization;
▪ authorize the FDA to impose tobacco product standards that are appropriate for the protection of public health (see Potential Product Standards below); and
▪ equip the FDA with a variety of investigatory and enforcement tools, including the authority to inspect product manufacturing and other facilities (see Investigation and Enforcement below).
Effective April 2022, the U.S. Congress expanded the statutory definition of tobacco products to include products containing nicotine derived from any source, including synthetic nicotine. See Premarket Review Pathways for Tobacco Products and Market Authorization Enforcement below for additional information. Currently, however, the statutory definition of tobacco products does not cover products containing nicotine analogues, which are designed to imitate the effects of nicotine. As a result, products containing nicotine analogues are not subject to the FDA regulatory framework for tobacco products.
▪ Final Tobacco Marketing Rule: As required by the FSPTCA, the FDA has promulgated a wide range of advertising and promotion restrictions for cigarettes and smokeless tobacco (1) products (the “Final Tobacco Marketing Rule”), which the FDA has subsequently amended to expand specific provisions to all tobacco products, including cigars, pipe tobacco and e-vapor and oral nicotine products containing tobacco-derived nicotine or other tobacco derivatives such as synthetic nicotine. The Final Tobacco Marketing Rule currently does not apply to products containing nicotine analogues.
▪ Rulemaking and Guidance: From time to time, the FDA issues proposed regulations and guidance, which may be issued in draft or final form, that generally involve public comment and may include scientific review. We actively engage with the FDA to develop and implement the FSPTCA’s regulatory framework, including submission of comments to various FDA policies and proposals and participation in public hearings and engagement sessions.
The FDA’s implementation of the FSPTCA and related regulations and guidance also may have an impact on enforcement efforts by states, territories and localities of their laws and regulations as well as of the State Settlement Agreements (see State Settlement Agreements below).  Such enforcement efforts may adversely affect our operating companies’ abilities to market and sell tobacco products in those states, territories and localities.

(1) “Smokeless tobacco,” as used in this section of this Form 10-Q, refers to smokeless tobacco products first regulated by the FDA in 2009, including MST. It excludes oral nicotine pouches, which were first regulated by the FDA in 2016.
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▪ Premarket Review Pathways for Tobacco Products and Market Authorization Enforcement: The FSPTCA permits the sale of tobacco products on the market as of February 15, 2007 and not subsequently modified (“Pre-existing Tobacco Products”) and new or modified products authorized through the pre-market tobacco product application (“PMTA”), Substantial Equivalence (“SE”) or SE Exemption pathways. Subsequent FDA rules also provide a Supplemental PMTA pathway designed to increase the efficiency of submission and review for modified versions of previously authorized products.
For products currently on the market, the FDA premarket authorization enforcement policy varies based on product type and date of availability on the market, specifically:
▪ Pre-existing Tobacco Products are exempt from the premarket authorization requirement;
▪ cigarette and smokeless tobacco products that were modified or first introduced into the market between February 15, 2007 and March 22, 2011 are generally considered “Provisional Products” for which SE reports were required to be filed by March 22, 2011. These reports must demonstrate that the product has the same characteristics as a product on the market as of February 15, 2007 or to a product previously determined to be substantially equivalent, or has different characteristics but does not raise different questions of public health;
▪ tobacco products that were first regulated by the FDA in 2016, including cigars, e-vapor products and oral nicotine pouches that are not Pre-existing Tobacco Products, are generally products for which either an SE report or PMTA needed to be filed by September 9, 2020; and
▪ tobacco products containing nicotine from any source other than tobacco ( e.g. , synthetic nicotine) that were on the market between March 15, 2022 and April 14, 2022 and are not Pre-existing Tobacco Products are generally products for which a manufacturer must have filed a PMTA by May 14, 2022. A manufacturer was permitted to keep such a product on the market until July 13, 2022 provided that a PMTA was filed by May 14, 2022. Thereafter, unless the FDA granted the product a marketing order, the product is subject to possible FDA enforcement.
The FSPTCA requires the FDA to issue a marketing order (either an MGO or a marketing denial order (“MDO”)) with respect to a PMTA no later than 180 days after receipt of the PMTA. Following the 180-day FDA review period, the FSPTCA allows any party that receives an MDO to seek expedited judicial review of the ruling in a federal appellate court within 30 days. Together, these statutory deadlines for FDA action and judicial review create a structure and timeline for manufacturers seeking to market new products. While it is possible that the FDA may bring an enforcement action relating to commercialized products for which a PMTA has been pending longer than the 180-day review period, we believe that any such enforcement action would conflict with the FSPTCA. Our operating companies may decide to commercialize products that have not received MGOs from the FDA if the operating company submitted a PMTA with respect to any such product in compliance with the FSPTCA and the FDA failed to issue a marketing order within the statutory review period.
Modifications to currently marketed products, including modifications that result from, for example, changes to the quantity of tobacco product(s) in a package, a manufacturer being unable to acquire ingredients or a supplier or contract manufacturer being unable to maintain the consistency required in ingredients or manufacturing processes, could trigger the FDA’s premarket review process. Additionally, a manufacturer may be unable to maintain consistency in manufacturing processes as it increases the scale of its manufacturing operations in response to market expansion or product introduction. These circumstances could cause a manufacturer to receive (i) a “not substantially equivalent” determination or (ii) a denial or withdrawal of a PMTA, either of which could result in a product being removed from the market. In addition, new scientific data continues to be developed relating to innovative nicotine products, which could impact the FDA’s determination as to whether a product is, or continues to be, appropriate for the protection of public health and could, therefore, result in the removal of one or more products from the market. Any such actions affecting our operating companies’ products could have a material adverse impact on our business, results of operations, cash flows or financial position.
Products Regulated in 2009 : Most cigarette and smokeless tobacco products currently marketed by PM USA and USSTC are “Provisional Products.” PM USA and USSTC timely submitted SE reports for these Provisional Products and have received SE determinations on certain Provisional Products. Those products that were found by the FDA to be not substantially equivalent (certain smokeless tobacco products) had been discontinued for business reasons prior to the FDA’s determinations; therefore, those determinations did not impact business results. PM USA and USSTC have other Provisional Products that continue to be subject to the FDA’s premarket review process. In the meantime, they can continue marketing these products unless the FDA determines that a specific Provisional Product is not substantially equivalent.
In addition, the FDA has communicated that it will not review a certain subset of Provisional Product SE reports and that the products that are the subject of those reports can continue to be legally marketed without further FDA review. PM USA and USSTC have Provisional Products included in this subset of products.
While we believe PM USA’s and USSTC’s current Provisional Products meet the statutory requirements of the FSPTCA, we cannot predict how the FDA will ultimately apply law, regulation, guidance or enforcement authority to various SE reports. Should PM USA or USSTC receive unfavorable determinations on any SE report currently pending with the FDA, we believe PM USA and USSTC can replace the vast majority of these product volumes with other FDA authorized products or with Pre-existing Tobacco Products.
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Cigarette and smokeless tobacco products introduced into the market or modified after March 22, 2011 are “Non-Provisional Products” and must apply to receive an MGO from the FDA prior to being offered for sale. MGOs for Non-Provisional Products may be obtained by filing an SE report, a PMTA or using another premarket pathway established by the FDA. PM USA and USSTC may not be able to obtain an MGO for non-provisional products because the FDA may determine that any such product does not meet the statutory requirements for approval.
Products Regulated in 2016 : Manufacturers of products first regulated by the FDA in 2016, including cigars, oral nicotine pouches and e-vapor products, that were on the market as of August 8, 2016 and not subsequently modified must have filed an SE report or a PMTA by the filing deadline of September 9, 2020 in order for their products to remain on the market. These products can remain on the market during FDA review through enforcement discretion, so long as the report or application was timely filed with the FDA. For those products still under FDA review, it is uncertain when and for how long the FDA may permit continued marketing and sale of those products pursuant to its discretion. For products (new or modified) not on the market as of August 8, 2016, manufacturers must file an SE report or a PMTA. As described above, the FSPTCA requires the FDA to issue a marketing order with respect to a PMTA no later than 180 days after receipt of the PMTA.
Helix submitted PMTAs for on! oral nicotine pouches on the market as of August 2016 in May 2020, PMTAs for additional on! oral nicotine pouches in September 2024, PMTAs for on! PLUS oral nicotine pouches in tobacco, mint and wintergreen flavors in June 2024 and PMTAs for on! PLUS oral nicotine pouches in six additional flavors in November 2025. In September 2025, the FDA launched a pilot program intended to increase efficiency and streamline the review process for PMTAs for select oral nicotine pouch products. Also in September 2025, the FDA communicated to Helix that PMTAs for certain of its products, including on! PLUS, were being reviewed through the pilot program. In December 2025, the FDA issued MGOs with respect to on! PLUS oral nicotine pouches in tobacco, mint and wintergreen flavors in 6 mg and 9 mg nicotine levels. As of April 27, 2026, the FDA has not issued a marketing order with respect to any other on! or on! PLUS product.
As of April 27, 2026, Middleton has received MGOs or exemptions that cover over 99% of its cigar product volume.
As a result of the NJOY Transaction, we gained full global ownership of NJOY’s e-vapor product portfolio, including NJOY ACE , a pod-based e-vapor product with an MGO from the FDA, and NJOY Daily , which also has an MGO. In June 2024, NJOY received MGOs with respect to two NJOY ACE menthol products and two NJOY Daily menthol products. NJOY ACE is subject to ITC exclusion and cease-and-desist orders prohibiting importation and sale in the United States. Although NJOY Daily is not subject to these orders, JUUL has asserted claims of patent infringement based on the sale of NJOY Daily in the United States. See Note 12.
Effect of Adverse FDA Determinations : FDA review timeframes have varied. It is therefore difficult to predict the duration of FDA reviews of SE reports or PMTAs. An unfavorable determination on an application, the withdrawal by the FDA of a prior MGO, an FDA enforcement action or other changes in FDA regulatory requirements could result in the removal of products from the market. A “not substantially equivalent” determination, a denial of a PMTA, an MGO withdrawal or an enforcement action by the FDA with respect to one or more products (each of which could require the removal of the product or products from the market) could have a material adverse impact on our business, results of operations, cash flows or financial position. Also, adverse FDA determinations or enforcement actions concerning innovative nicotine products could have a material adverse effect on our innovative nicotine businesses and our ability to achieve our Vision.
Post-Market Surveillance : Manufacturers that receive MGOs must adhere to the FDA post-market record keeping and reporting requirements, as detailed in market orders and in the final PMTA rule. The requirements include prior notification of marketing activities. The FDA may amend requirements of an MGO or withdraw the MGO based on this information if, among other reasons, it determines that the continued marketing of the products is no longer appropriate for the protection of the public health. If the FDA fails to issue a marketing order within the statutory review period with respect to a PMTA submitted by one of our operating companies and that operating company elects to commercialize the applicable product, we expect that operating company will execute its plans consistent with the post-market record keeping and reporting requirements of the FDA’s most recently issued MGOs for similar products.
▪ FDA Regulatory Actions
▪ Graphic Warnings : In March 2020, the FDA issued a final rule requiring 11 textual warnings accompanied by color graphics depicting certain negative health consequences of smoking on cigarette packaging and advertising. PM USA and other cigarette manufacturers filed lawsuits challenging the final rule on substantive and procedural grounds. In December 2022, the U.S. District Court for the Eastern District of Texas found in favor of cigarette manufacturers in one such suit and blocked the rule, finding it unconstitutional on the basis that it compelled speech in violation of the First Amendment. The FDA appealed the decision, and, in March 2024, the U.S. Court of Appeals for the Fifth Circuit reversed the district court and remanded the case for further proceedings. In August 2024, the cigarette manufacturers in the suit petitioned the U.S. Supreme Court to review the case, which the U.S. Supreme Court declined to do.
In January 2025, the U.S. District Court for the Eastern District of Texas found in favor of cigarette manufacturers that had challenged the final rule on the basis that the FDA exceeded its statutory authority by requiring cigarette packaging and
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