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PMPhilip Morris International

Consumer staples · Tobacco · NYSE
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The 10-K against last year's

293 changes: 42 added, 74 removed, 169 reworded, 8 quiet changes

10-K Feb 6, 2026 vs Feb 6, 2025
Risk FactorsRedline ↓
25.1%
of the text changed · 8,546 words now
29.1%
of the text changed · 24,026 words now
Legal ProceedingsRedline ↓
50.1%
of the text changed · 6,677 words now
Accounting PoliciesRedline ↓
12.6%
of the text changed · 2,482 words now

10-K 0001628280-26-005939 (2026-02-06) vs 10-K 0001413329-25-000013 (2025-02-06)

The redline

The paragraph that changed most in each section

Marked against last year's 10-K: cut words struck through, new words highlighted and underlined.

Legal Proceedings 397 words changed in this paragraph; it is 32% similar to last year's version.
On November 18, 2024, a putative class action, Neumark In the tenth case, Austin Siegert v. Swedish Match North America LLC, was Philip Morris International Inc. et al, filed September 26, 2025, before the United States District Court for the Eastern District of Virginia. Connecticut, plaintiff alleges, among other things, addiction to nicotine resulting from the use of ZYN nicotine pouches. The complaint named PMI and Swedish Match North America LLC as the defendant. defendants. Plaintiff alleges that Swedish Match North America LLC violated federal and state antitrust laws by, among other things, driving a competitor from the market through purportedly baseless litigation and entering into an allegedly anticompetitive agreement with PMI whereby PMI, through an indirect subsidiary, acquired Swedish Match North America LLC and eliminated itself as a competitor in the U.S. nicotine pouch market. Plaintiff asserts claims under the Sherman Antitrust Act, the Clayton Antitrust Act, state antitrust law, and for unjust enrichment. Plaintiff seeks purports to represent classes comprised of (i) all natural persons, businesses, entities, and corporations persons who purchased ZYN in the United States and (ii) a subclass of persons who purchased ZYN at retail during in New York. Plaintiff alleges, among other things, that defendants misrepresented that ZYN is tobacco-free; misled consumers regarding ZYN’s nicotine strength and addictive potential; and deployed misleading advertisements geared towards those under the class period; legal age. Plaintiff asserts claims for violations of New York General Business Law § 349 (deceptive and (ii) all natural persons, businesses, entities, unfair trade practices); violations of New York General Business Law § 350 (misleading advertising); violations of state consumer protection statutes; and corporations in breaches of the United States who live in states that have certain antitrust statutes who purchase ZYN at retail during the class period. implied warranty of merchantability. Plaintiff is seeking damages (including treble damages as available under antitrust laws), costs, attorneys’ fees, disgorgement of profit, pre- seeks compensatory, statutory and post-judgment punitive damages, attorney’s fees and expenses, prejudgment interest, and declaratory and injunctive relief (including a declaration that the acquisition of Swedish Match North America LLC by PMI is unlawful and must result in divestiture or be enjoined). relief. On January 15, October 30, 2025, Swedish Match North America LLC defendants filed a motion to dismiss stay the complaint with prejudice. Subsequently thereto, Plaintiff informed Swedish Match North America LLC proceedings until the court in the Kelly case, described above, issues a ruling on any motion for class certification that he will file an amended complaint, which is due the plaintiff in that case might bring. On November 3, 2025, the Court granted the motion to stay until the court in the Kelly case issues a ruling on February 10, 2025 class certification. At this time, no estimated loss has been accrued in the consolidated financial statements for this proceeding proceeding, and we cannot determine the likelihood of loss, or reasonably estimate a range of loss, if any, from this proceeding.

Source: Item 3, via Note 16 – Contingencies:, 10-K 0001628280-26-005939 vs Item 3, via Note 18 – Contingencies:, 10-K 0001413329-25-000013

Risk Factors 241 words changed in this paragraph; it is 63% similar to last year's version.
Some of the countries in which we operate face the threat of civil unrest and can be subject to regime changes. In others, nationalization, terrorism, conflict and the threats of war or acts of war may have a significant impact on the business environment. Factors beyond our control, such as, without limitation, natural disasters, disasters; extreme weather events, pandemics (including COVID-19), events; pandemics; adverse economic, political, regulatory, political or regulatory events; acts of war or threats of war war; formal or informal bans or boycotts or changes in consumer preferences resulting from geopolitical developments; geopolitical instability affecting international trade; or other developments developments, could disrupt or increase the expenses related to our supply chain, manufacturing capabilities, distribution capabilities, or the energy and other utility services required to operate our factories, warehouses, and other premises. Our business continuity plans and other safeguards might not always be effective to fully mitigate their impact. For example, Additionally, while we do not now expect that the recent and currently anticipated trade tariffs imposed by the U.S. and other countries will materially impact our business, the global pandemic outbreak tariff environment is volatile and further tariff or trade related developments could result in risks to PMI’s business, including increased production costs; limited market access; supplier financial condition degradation resulting in reduced or interrupted supplies; and price increases or other economic impacts that could reduce consumer demand. Any of the COVID-19 virus in 2020 created significant societal and economic disruption and the closure of stores, factories and offices, restrictions on manufacturing, distribution and travel, and supply chain disruptions, among other impacts. Additionally, while the supply chains our operations rely on are generally self-contained within their respective trade regions and have limited inflexible trade connections to markets that represent a high tariff risk, a broader increase in tariffs could disrupt our supply chains and increase our costs. Such these developments – including the impact of geopolitical disruptions resulting from the conflict in the Middle East and the impact on energy prices and availability in the EU and elsewhere resulting from the invasion of Ukraine by Russia – could cause significant volume declines in our duty-free Global Travel Retail business and certain other key markets; disrupt or delay our distribution, manufacturing or supply chain; increase currency volatility; increase costs of our materials and operations and lead to loss of property or equipment that are critical to our business in certain markets and difficulty in staffing and managing our operations, all of which could have a material adverse effect on our business, operations, volumes, revenues, cash flows, financial position, net earnings and profitability. We discuss additional risks associated with Russia's invasion of Ukraine and climate change, above.

Source: Item 1A, 10-K 0001628280-26-005939 vs Item 1A, 10-K 0001413329-25-000013

MD&A 193 words changed in this paragraph; it is 50% similar to last year's version.
The lower higher working capital requirements in 2024 2025 as compared with 2023 2024 were primarily due to more cash provided by used in inventories, coupled with more cash provided by used in accrued liabilities and other current assets, mainly reflecting the timing of excise tax-paid inventory movements primarily related to excise tax increases and the timing of the corresponding excise tax payments. Excise tax payments and less included the disputed supplemental tax surcharge on heated tobacco products in Germany of approximately $0.8 billion as PMI elected to pay the supplemental tax surcharge in January 2025 to avoid the future addition of interest (for further details refer to the MD&A Europe segment section where we describe the case). In addition, more cash used in accounts payable in 2024 income taxes primarily due to comparison with 2023 payment for higher IQOS ILUMA device purchases in the fourth quarter of 2022 to meet the needs of ILUMA launches. The favorable 2024 working capital comparison to 2023 is also impacted by higher 2023 working capital requirements following reflected the higher cost of tobacco leaf final 2017 U.S. Tax Cuts and other direct materials due to inflationary pressures (for further details, see “Impact of Inflation on Our Business and Mitigation Efforts” section of this MD&A), as well as tactical stock increases for certain direct materials. Jobs Act transition tax installment payment. These changes in the working capital requirements unfavorable movements were partly partially offset by more less cash used in accounts receivable mainly reflecting lower higher usage of our factoring arrangements to sell trade receivables, as well as the timing of sales and cash collections. For collections (for further detail on our factoring arrangements, details, see Item 8, Note 19. 17. Sale of Accounts Receivable. Receivable).

Source: Item 7, 10-K 0001628280-26-005939 vs Item 7, 10-K 0001413329-25-000013

Accounting Policies 178 words changed in this paragraph; it is 33% similar to last year's version.
In certain instances, PMI facilitates shipping and handling activities after control has transferred to the customer. PMI has elected to record all shipping and handling activities as costs to fulfill a contract. The shipping and handling costs that have not been incurred at the time revenue is recognized are accrued. PMI is a principal for majority of its arrangements and recognizes revenue at the transaction price, with the associated costs recorded in cost of sales. The transaction price is typically based on the amount billed to the customer and includes estimated variable consideration, where applicable. Such variable consideration is typically not constrained and is estimated based on the most likely amount that PMI expects to be entitled to under the terms of the contracts with customers, historical experience of discount or rebate redemption, where relevant, and the terms of any underlying discount or rebate programs, which may change from time to time as the business and product categories evolve. For arrangements where PMI acts as an agent, the net commission earned is recognized as revenue. PMI has elected to exclude excise taxes collected from customers from the measurement of the transaction price, thereby presenting revenues net of excise taxes. Estimated costs associated with warranty programs are generally provided for in cost of sales in the period the related revenues are recognized.

Source: Item 8, Note 2 – Summary of Significant Accounting Policies:, 10-K 0001628280-26-005939 vs Item 8, Note 2 – Summary of Significant Accounting Policies:, 10-K 0001413329-25-000013

Every change, by type

Sentences and paragraphs added, removed or reworded

Sentences and paragraphs of PM's Risk Factors and MD&A, 10-K 2026-02-06 against 10-K 2025-02-06. Each links to the text at sec.gov.

AddedRisk Factors
Our strategic priority is the continued introduction, commercialization, and growth of our SFPs and if these efforts are not successful, in key markets or systematically, our financial results and future growth prospects may be materially adversely impacted. If other market participants are more successful in these efforts or if SFP categories where we hold a competitive advantage are inequitably regulated compared to cigarettes or other SFP categories without regard to the totality of the scientific evidence available for such products, we may be at a competitive disadvantage. In addition, actions of some market participants, such as the inappropriate

Read it in 10-K 2026-02-06 at sec.gov ↗

AddedRisk Factors
We anticipate that significant regulatory restrictions will continue to be considered and adopted in many markets. Regulatory initiatives that have been contemplated, proposed, introduced, or enacted by governmental authorities in various jurisdictions include:

Read it in 10-K 2026-02-06 at sec.gov ↗

AddedRisk Factors
Classification of the product as food such that any nicotine amounts beyond de minimis content de facto bans the nicotine product from the market

Read it in 10-K 2026-02-06 at sec.gov ↗

AddedRisk Factors
Our business is subject to changes in adult consumer preferences and if we do not accurately assess market trends, are unable to adapt our product offerings to evolving consumer demands, or face challenges in product development, we could experience missed opportunities, supply chain challenges, reduced competitiveness, inefficient expenditures, and potential impacts on our customer base and brand reputation. Furthermore, restrictions pertaining to packaging, labeling, or promotional and advertising activities may limit our ability to effectively communicate product innovations intended to address changing adult consumer preferences. Any of these factors could have a material adverse effect on our results of operations, revenues, cash flows, profitability, and prospects for growth.

Read it in 10-K 2026-02-06 at sec.gov ↗

AddedRisk Factors
Additionally, we expect that these third parties adhere to our applicable standards and to applicable laws related to product quality, responsible marketing, data protection, labor practices, and other areas. Our ability to monitor and enforce compliance is inherently limited and these parties may fail to comply with our standards or to operate in accordance with our expectations or legal requirements, which could expose us to operational disruptions, legal or regulatory liabilities, reputational damage, or financial losses.

Read it in 10-K 2026-02-06 at sec.gov ↗

AddedRisk Factors
While we seek to mitigate the physical risks to our business associated with the natural environment through a comprehensive strategy that includes the development and implementation of robust mitigation and adaptation measures, we recognize that there are residual risks that lie beyond our operational control. For example, increased frequency and intensity of extreme droughts, floods, and/or heatwaves could negatively affect our manufacturing operations, tobacco-growing areas, third-party operators and third-party manufacturers sites, and supply regions for products and raw materials, all of which may lead to disruption of our supply chain and of operations at factories, warehouses and other premises.

Read it in 10-K 2026-02-06 at sec.gov ↗

Show the other 16
AddedRisk Factors
Additionally, we source the vast majority of our tobacco from a global network of farmers across multiple countries, rather than through commodity markets, which helps ensure the consistency, quality, and traceability of our tobacco supply. However, this model also means that disruptions to farmer livelihoods, if not actively mitigated, could lead to supply chain disruption through farmer exit, reduced crop quality, unsustainable farming practices, increased regulatory scrutiny, and reputational risks.

Read it in 10-K 2026-02-06 at sec.gov ↗

AddedRisk Factors
We increasingly use artificial intelligence-based solutions in our business, which could result in reputational harm, legal liability, and adversely affect our operating results.

Read it in 10-K 2026-02-06 at sec.gov ↗

AddedRisk Factors
We and our business partners are increasingly incorporating artificial intelligence ("AI")-based solutions in our ways of working and operations, but this process involves uncertainty and risks, which may or may not yield corresponding benefits. Artificial intelligence technologies are complex, and there are technical and organizational challenges associated with achieving optimal levels of accuracy, efficiency, safety, explicability, reliability, and use for their intended purposes. Flaws, biases, data sourcing issues, limitations, errors, misconfiguration, or malfunctions in these systems could result in operational disruptions, including data loss and corruption. There is a risk of artificial intelligence system failures, disruptions, or vulnerabilities that could compromise PMI’s information technology

Read it in 10-K 2026-02-06 at sec.gov ↗

AddedRisk Factors
networks and systems and the integrity, availability, security, or privacy of PMI data processed by or through such systems. The emergence of AI and other technologies may also exacerbate other risks, including those related to regulation, litigation, compliance issues, ethical concerns, confidentiality, intellectual property ownership and infringement, and data privacy or security. Separately, AI presents a new attack surface that cybercriminals will attempt to exploit as well as providing means to scale and automate targeted attacks. Ineffective or inadequate artificial intelligence development, adoption, or deployment practices, including any use, reliance, or dependence on AI generated outputs, could result in unintended, unexpected, or otherwise unforeseen adverse consequences. These risks could have a material adverse effect on our business, reputation, financial condition, or operating results.

Read it in 10-K 2026-02-06 at sec.gov ↗

AddedMD&A
As communicated in the fourth quarter of 2025, with our smoke-free business now operating at scale across our regions, including substantial growth from our U.S. business, we have implemented an evolved organizational model with two primary business units: International and U.S. The updated organizational structure is designed to enhance our agility and to support our journey to become a smoke-free company under the leadership of Jacek Olczak, Group CEO of PMI. This change was implemented effective January 1, 2026, and as a result we realigned our reportable segments accordingly. The four geographic segments have been replaced with three new reportable segments: International Smoke-Free, International Combustibles, and U.S. As of the first quarter of 2026, our reporting will reflect these changes.

Read it in 10-K 2026-02-06 at sec.gov ↗

AddedMD&A
Germany excise tax classification litigation charge – In August 2024, the German Main Custom Office (“MCO”) notified Philip Morris (Germany) GmbH (“PM Germany”) of its decision to classify TEREA consumables as a cigarette for excise tax purposes with the associated tax assessment totaling EUR 151 million (approximately $176 million) covering the period of February 15, 2023, through August 1, 2024. In April 2025, PM Germany paid the outstanding amount, which was recorded in Other assets on the consolidated balance sheets, while it challenged the MCO’s decision in court. On September 17, 2025, PM Germany filed a request to withdraw the proceedings. As a result, the tax assessment amount of $176 million (representing $150 million net of income tax and a diluted EPS charge of $0.10 per share) was recorded as a pre-tax charge in marketing, administration and research costs in the consolidated statements of earnings for the year ended December 31, 2025, and was included in the Europe segment results.

Read it in 10-K 2026-02-06 at sec.gov ↗

AddedMD&A
RBH (Canada) Plan implementation, including dividend income, net – On August 29, 2025, the plan of compromise and arrangement (the “Plan”) setting forth the terms of a resolution of Canadian tobacco claims and related litigation became effective. In the third quarter of 2025, we recorded after-tax income of $156 million ($0.10 per share increase in diluted EPS) following the Plan implementation, including $303 million of dividend income net of the corresponding decrease in the carrying value of the RBH investment, $19 million of other income and the related income tax charge of $166 million. For further details regarding the Plan, see Item 8, Note 5. Related Parties - Equity Investments and Other, and Note 10. Income Taxes.

Read it in 10-K 2026-02-06 at sec.gov ↗

AddedMD&A
The 2025 tax items that increased our 2025 diluted EPS by $0.11 per share in the table above were due to benefits related to an interest expense election primarily driven by a reduction in prior year tax costs associated with global intangible low-taxed income and refunds expected on amended tax returns filed in Germany; partially offset by valuation allowances recorded on deferred tax assets related to U.S. foreign tax credits and the recognition of current tax expense related to the potential disallowance of deductions for certain intercompany transactions in Indonesia. For further details, see Item 8, Note 10. Income Taxes.

Read it in 10-K 2026-02-06 at sec.gov ↗

AddedMD&A
Revenue Recognition - We recognize revenue as performance obligations are satisfied. Our primary performance obligation is the distribution and sales of cigarettes and smoke-free products, including heat-not-burn, e-vapor and oral nicotine products. Our

Read it in 10-K 2026-02-06 at sec.gov ↗

AddedMD&A
As discussed in Item 8, Note 4.Goodwill and Other Intangible Assets, net, PMI recorded impairment losses related to goodwill and non-amortizable intangible assets during the second quarter of 2025 and 2023, where certain reporting units and non-amortizable intangible assets were written down to their respective fair values as of the date of the annual impairment review. During 2024, PMI’s annual impairment review of goodwill and non-amortizable intangible assets resulted in no impairment charges. At December 31, 2025, the carrying value of our goodwill was $17.3 billion. The estimated fair value of each of our eleven reporting units, excluding the held-for-sale businesses, and non-amortizable intangible assets exceeded the carrying value as of December 31, 2025. All assumptions used in the impairment assessments for goodwill and non-amortizable intangible assets are based on the best available market information and are consistent with PMI’s internal forecasts and operating plans. A deterioration in these assumptions could adversely impact our results.

Read it in 10-K 2026-02-06 at sec.gov ↗

AddedMD&A
The valuation of derivative contracts includes the market inputs and estimates listed above, which are subject to changes in business conditions. Changes to the fair value of the derivative financial instruments could adversely impact PMI’s results.

Read it in 10-K 2026-02-06 at sec.gov ↗

AddedMD&A
•Germany excise tax classification litigation charge – In August 2024, the German Main Custom Office (“MCO”) notified Philip Morris (Germany) GmbH (“PM Germany”) of its decision to classify TEREA consumables as a cigarette for excise tax purposes with the associated tax assessment totaling EUR 151 million (approximately $176 million) covering the period of February 15, 2023, through August 1, 2024. In April 2025, PM Germany paid the outstanding amount, which was recorded in Other assets on the consolidated balance sheets, while it challenged the MCO’s decision in court. On September 17, 2025, PM

Read it in 10-K 2026-02-06 at sec.gov ↗

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