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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.

Quiet changes are sentences kept from last year with one to four words changed, at least one of them a hedge, a modal or a qualifier (may, could, will, not, significant, material…). A year or date rolling forward is not counted.

The full word listadverse, adversely, all, although, anticipate, anticipates, any, approximately, believe, believes, can, cannot, certain, could, expect, expects, generally, however, if, intend, intends, largely, likely, many, material, materially, may, might, most, must, never, no, not, possible, primarily, probable, should, significant, significantly, some, substantial, substantially, unlikely, will, would
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 72
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 ↗

RemovedRisk Factors
should not consider the following to be a complete discussion of all potential risks or uncertainties. We do not undertake to update any forward-looking statement that we may make from time to time, except in the normal course of our public disclosure obligations.

Read it in 10-K 2025-02-06 at sec.gov ↗

RemovedRisk Factors
Our key strategic priorities are to: (i) continue developing and commercializing products that present less risk of harm to adult smokers who switch to smoke-free products versus continued cigarette smoking; and (ii) encourage and educate current adult smokers who would otherwise continue to smoke cigarettes to switch to those products. For our efforts to be successful, we must:

Read it in 10-K 2025-02-06 at sec.gov ↗

RemovedRisk Factors
for those adult smokers, our goal is to develop and offer SFPs with a scientifically substantiated risk-reduction profile that approaches as closely as possible the risk-reduction profile associated with smoking cessation;

Read it in 10-K 2025-02-06 at sec.gov ↗

RemovedRisk Factors
substantiate the reduction of risk for the individual adult smoker and the reduction of harm to the population as a whole, based on scientific evidence of the highest standard that is made available for scrutiny and review by external independent scientists and relevant regulatory bodies; and

Read it in 10-K 2025-02-06 at sec.gov ↗

RemovedRisk Factors
advocate for the development of science-based regulatory frameworks for the development and commercialization of SFPs, including the communication of scientifically substantiated information to enable adult smokers to make better choices.

Read it in 10-K 2025-02-06 at sec.gov ↗

RemovedRisk Factors
The World Health Organization (the "WHO") study group on tobacco product regulation published their ninth report on the scientific basis of tobacco product regulation in August 2023. The report is based on a review of scientific evidence related to novel and emerging nicotine and tobacco products, such as electronic nicotine delivery systems ("ENDS"), electronic non-nicotine delivery systems and HTPs. The report concludes by making a number of policy recommendations on HTPs and ENDS that, if implemented, could restrict both the availability of these products and the access to accurate information about them. In August 2021, the Framework Convention on Tobacco Control (the "FCTC") Secretariat published two reports on novel and emerging tobacco products to the Ninth Session of the CoP of the FCTC, which are not materially different from the WHO study group report. Substantive decisions based on these reports were deferred to the Tenth Session of the CoP ("CoP 10"). CoP 10 to the FCTC took place in February 2024. According to reports and decisions published, neither new decisions nor new policy recommendations on novel and emerging tobacco products were adopted. Specific Guidelines were adopted to address cross-border Tobacco Advertising, Promotion, and Sponsorship ("TAPS") and the depiction of tobacco in entertainment media. The Eleventh Session of the CoP is currently scheduled to take place in November 2025.

Read it in 10-K 2025-02-06 at sec.gov ↗

RemovedRisk Factors
Moreover, we also submitted additional premarket tobacco applications for other ZYN products after the September 9, 2020 deadline, and we are unable to market these products until the FDA authorizes such applications. In April 2024, we also submitted MRTPAs for ZYN products currently marketed in the U.S. and requested authorization of the modified risk claim. There is no guarantee that the ZYN products will receive the necessary authorizations from the FDA.

Read it in 10-K 2025-02-06 at sec.gov ↗

RemovedRisk Factors
While we seek to mitigate our business risks associated with environmental issues, such as climate change, by establishing environmental goals and standards and seeking business partners, including within our supply chain, that are committed to operating in ways that protect the environment or mitigate environmental impacts, we recognize that there are inherent environmental-related risks, including climate change-related risks, wherever business is conducted. Among other potential impacts, climate change could influence the quality and volume of the agricultural products we rely on, including tobacco, due to several factors beyond our control, including more frequent variations in weather patterns, extreme weather events causing unexpected downtime and inventory losses, other adverse weather conditions, and governmental restrictions on trade, all of which may lead to disruption of operations at factories, warehouses and other premises.

Read it in 10-K 2025-02-06 at sec.gov ↗

RemovedRisk Factors
Furthermore, nature-related risks, including those related to natural ecosystems degradation, decreased agricultural productivity in certain regions of the world, biodiversity loss, water resource depletion and deforestation, which are partially driven or exacerbated by climate change, may negatively impact the resilience of, or otherwise disrupt, our business operations or those of our suppliers and business partners.

Read it in 10-K 2025-02-06 at sec.gov ↗

RemovedRisk Factors
Our business is subject to changes in adult consumer preferences, which may be influenced by local economic conditions, accessibility to our products and availability of accurate information related to our products.

Read it in 10-K 2025-02-06 at sec.gov ↗

RewordedRisk Factors
An actual or alleged failure to comply with complex and changing privacy, data, artificial intelligence and information security laws and regulations such as under the EU General Data Protection Regulation, various U.S. state and federal laws, and other similar privacy privacy, data, and information security laws laws, regulations, or voluntary guidelines that could establish legal duties across the various jurisdictions in which PMI operates, such as the failure or inability to protect or safeguard personal data; or company data, or information systems and networks, including connected products; implement or execute appropriate technological and reasonable security and organizational measures; implement and maintain appropriate safeguards for personal or company data being transferred internationally; internationally or between third parties; respect the privacy privacy, digital, or other rights of data subjects; provide sufficient detailed notices of notices, information, or transparency obligations related to personal or other data processing; retrieve obtain appropriate consent and provide opt-outs; respond to data subject or other data requests in a timely fashion; meet stringent timeframe requirements for incident reporting to regulatory authorities; authorities or data subjects; notify all relevant regulatory authorities or data subjects; comply with artificial intelligence regulations, and others, could have a material adverse effect on us, subject us to substantial fines and/or legal challenges, and/or harm our business, reputation, financial condition, or operating results.

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

RewordedRisk Factors
Moreover, given that the regulatory framework landscape in this regard is highly dynamic, dynamic and fragmented across the many jurisdictions where we operate, additional uncertainties may be driven by further upcoming regulatory changes on which we might have limited visibility or with limited time to implement, for implementation and by contradictory requirements across jurisdictions, which could have an impact on several elements of our business, including elevating elevate the cost or complexity of our operations. operations or create compliance risks.

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

RewordedRisk Factors
Such Any of 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.

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

RewordedRisk Factors
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.

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

RewordedRisk Factors
Our or our business partners’ failure or inability to adhere to privacy, data, artificial intelligence and information security laws could result in business disruption, loss of reputation reputational harm, legal liability, and consumer trust, litigation, regulatory action including significant fines or penalties, financial impact, and loss of revenue, assets or personal, confidential, or sensitive data. adversely affect our operating results.

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

RewordedRisk Factors
Reports issued by the WHO These reports and other FCTC guidelines or recommendations proposals are not binding on the WHO Member States or on parties to the FCTC, and so it is not possible to predict the extent to which any of the reports or proposals it adopts will be implemented. are implemented into regulations by Member States.

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

RewordedRisk Factors
While we will undertake the activities in a manner consistent with all applicable requirements, successful Successful development and commercialization is of these products, however, are dependent on compliance with a constantly evolving legal and regulatory environment, and subject us to various legal, reputational and regulatory risks, which could have a material, adverse effect on our business and results of operations.

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

RewordedRisk Factors
We cannot predict the extent to which regulators will permit — or continue to permit — the sale and/or marketing of SFPs and regulatory restrictions have, and could further limit, the commercialization of our SFPs.

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

RewordedRisk Factors
However, the WHO proposals these proposed guidance documents could ultimately lead to restrictions on the availability of certain of our SFPs and or access to accurate information about them in one or more of our current or future markets, which could have a material adverse effect on our financial results of operations. and growth prospects.

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

RewordedRisk Factors
We compete for talent, including in areas that are relatively new to us such as digital, information technology, and life sciences, talent with companies in the consumer products, technology, pharmaceutical and other sectors that enjoy greater societal acceptance.

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

RewordedRisk Factors
The likelihood of retaliatory action by the Russian government against companies, including PMI, as a result of actions and statements made in response to the Russian invasion or otherwise, including the possibility of legal action against us or our employees; the deprivation of rights in, or access to, our Russian or Russia-related assets; or nationalization of foreign businesses or assets (including cash reserves held in Russia and intangible assets such as trademarks), is impossible to predict.

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

RewordedRisk Factors
The effects of climate change, other environmental issues, Risks related to the natural environment and related legal or regulatory responses developments may have a negative impact on our business and results of operations.

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

Quiet changesRisk Factors
To date, we have been largely successful in demonstrating to regulators that our SFPs are not cigarettes due to the absence of combustion, and accordingly they are generally frequently taxed either as a separate category or as other tobacco products, which typically yields more favorable tax rates than cigarettes.

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 ↗

RemovedMD&A
Following the combination and the progress in 2023 toward the integration of the Swedish Match business into PMI's existing regional structure, PMI updated in January 2024 its segment reporting by including the former Swedish Match segment results into the four existing geographical segments. Our four geographical segments are as follows:

Read it in 10-K 2025-02-06 at sec.gov ↗

RemovedMD&A
In 2022, we acquired Swedish Match AB, a market leader in oral nicotine delivery with a significant presence in the United States market. The Swedish Match acquisition was a key milestone in PMI’s transformation to becoming a smoke-free company. The Swedish Match product portfolio is complementary to our portfolio, permitting us to bring together a leading oral nicotine product with the leading heat-not-burn product.

Read it in 10-K 2025-02-06 at sec.gov ↗

RemovedMD&A
In 2022, we reached an agreement with Altria Group, Inc. to end our commercial relationship in the U.S. covering IQOS as of April 30, 2024. PMI now holds the full rights to commercialize IQOS in the U.S.

Read it in 10-K 2025-02-06 at sec.gov ↗

RemovedMD&A
For further details of our 2022 acquisition of Swedish Match, as well as the agreement with Altria Group, Inc. discussed above, see Item 8, Note 3. Acquisitions and Divestitures and the "Business Environment" section of this Item 7.

Read it in 10-K 2025-02-06 at sec.gov ↗

RemovedMD&A
During the second quarter of 2024, PMI completed its annual review of goodwill and non-amortizable intangible assets for potential impairment using a quantitative assessment for all of its reporting units and non-amortizable intangible assets. As a result of this review, no impairment charges were required.

Read it in 10-K 2025-02-06 at sec.gov ↗

RemovedMD&A
At December 31, 2024, the carrying value of our goodwill was $16.6 billion, which is related to eleven geographical reporting units, each consisting of a group of markets with similar operating and economic characteristics, and the Wellness and Healthcare business. The estimated fair value of each of our twelve reporting units and non-amortizable intangible assets exceeded the carrying value as of December 31, 2024.

Read it in 10-K 2025-02-06 at sec.gov ↗

RemovedMD&A
comprehensive losses on the consolidated balance sheet and recognized in the consolidated statement of earnings into the same line item as the impact of the underlying transaction and in the periods when the related hedged transactions are also recognized in operating results. Gain (losses) related to derivatives contracts for which hedge accounting provisions have not been elected are recognized in the consolidated statement of earnings.

Read it in 10-K 2025-02-06 at sec.gov ↗

RemovedMD&A
Our total cigarette and HTU shipment volume increased by 2.5% (HTU shipments increased by 11.6%, while cigarette shipments increased by 0.6%) with increases across all regions except the Americas.

Read it in 10-K 2025-02-06 at sec.gov ↗

RewordedMD&A
Diluted EPS % Change For the year ended December 31, 2023 2024 $ 5.02 2023 Charges related to the war in Ukraine 0.03 2023 Restructuring charges 0.06 2023 South Korea indirect tax charge 0.11 2023 Termination of agreement with Foundation for a Smoke-Free World 0.07 2023 Fair value adjustment for equity security investments (0.02) 2023 Amortization of intangibles 0.25 2023 Impairment of goodwill and other intangibles 0.44 2023 Termination of distribution arrangement in the Middle East 0.04 2023 Swedish Match AB acquisition accounting related items 0.01 2023 Income tax impact associated with Swedish Match AB financing (0.11) 2023 Tax items 0.11 Subtotal of 2023 items 0.99 4.52 2024 Restructuring charges (0.10) 0.10 2024 Impairment of other intangibles (0.01) 0.01 2024 Fair value adjustment for equity security investments 0.27 (0.27) 2024 Impairment related to RBH equity investment (1.49) 1.49 2024 Amortization of intangibles (0.40) 0.40 2024 Loss on sale of Vectura Group (0.13) 0.13 2024 Egypt sales tax charge (0.03) 0.03 2024 Megapolis localization tax impact (0.05) 0.05 2024 Income tax impact associated with Swedish Match AB financing (0.14) 0.14 2024 Tax items 0.03 (0.03) Subtotal of 2024 items (2.05) 2.05 2025 Restructuring charges (0.14) 2025 Impairment of goodwill (0.03) 2025 Fair value adjustment for equity security investments 0.18 2025 Amortization of intangibles (0.50) 2025 Germany excise tax classification litigation charge (0.10) 2025 RBH (Canada) Plan implementation, including dividend income, net 0.10 2025 Impairment of Wellness business related equity investment (0.09) 2025 Loss on expected sale of consumer accessories and other businesses (0.06) 2025 Income tax impact associated with Swedish Match AB financing 0.25 2025 Tax items 0.11 Subtotal of 2025 items (0.28) Currency (0.38) 0.04 Interest (0.03) 0.09 Change in tax rate (0.07) (0.01) Operations 1.04 0.85 For the year ended December 31, 2024 2025 $ 4.52 (10.0)% 7.26 60.6%

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

RewordedMD&A
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 and less cash used in accounts payable in 2024 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. payments.

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

RewordedMD&A
Total Cur- Acqui-sitions / Dives-titures Price Vol/ Cost/ Curr. & Acquis. / Divest. rency Mix Other (in millions) Net Revenues $6,632 $6,393 3.7% 4.6% $239 $ 333 (53) $ 306 8.8% 7.8% $27 $81 $211 $ 3 $ $26 $ $ (2) — Operating Income / (Loss) $3,126 $2,878 8.6% 11.7% $248 $ (391) (88) $ (870) 55.1% 55.4% $479 $81 $224 $ (3) $ $26 $ $ 456 31

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

RewordedMD&A
Amortization of intangibles – During 2023 2024 and 2024, 2025, we recorded amortization of intangible expense of $497 million (representing $389 million net of income tax or $0.25 per share decrease in diluted EPS) and $835 million (representing $629 million net of income tax or $0.40 per share decrease in diluted EPS) and $1,003 million (representing $780 million net of income tax or $0.50 per share decrease in diluted EPS), respectively.

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

RewordedMD&A
Net revenues, excluding currency and acquisitions, acquisitions/divestitures, increased by 3.6%, 6.4%, mainly reflecting: a favorable pricing price variance, mainly predominantly driven by higher combustible tobacco pricing; partially offset by unfavorable volume/mix, mainly due to lower cigarette volume, as well as while unfavorable cigarette mix, partly due to the commercial model change in Indonesia, was largely offset by higher HTU cigarette and SFP volume.

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

RewordedMD&A
Currently, national standards in certain countries set minimum quality and safety requirements for heat-not-burn products with technical heat-not-burn specifications and/or methods for demonstrating the absence of combustion. combustion, including, for example, Algeria, Angola, Armenia, Bahrain, Colombia, Costa Rica, Dominican Republic, Egypt, Indonesia, Jordan, Kazakhstan, Kyrgyzstan, Lebanon, Morocco, the Philippines, Russia, Saudi Arabia, Tajikistan, Tunisia, the United Arab Emirates ("UAE"), the U.K., Ukraine, Uzbekistan and Vietnam.

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

RewordedMD&A
Interest – The unfavorable favorable impact of $0.03 $0.09 per share from interest in the table above was primarily due primarily to higher average debt levels and higher average the impact of lower market interest rates on our variable-rate debt, partially offset by higher interest income. as well as the favorable impact of derivative financial instruments.

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

RewordedMD&A
Impairment of goodwill and other intangibles – During the second quarter of 2023, as a result of 2025, after the completion of our annual review of goodwill and non-amortizable intangible assets for potential impairment, goodwill, it was determined that the estimated fair value of the Wellness and Healthcare a reporting unit included within the Europe segment was lower than its carrying value.

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

RewordedMD&A
The anticipated increase decrease is primarily due to higher lower amortization of unrecognized actuarial losses of $45 $62 million, coupled with higher service cost of $17 million, partially offset by higher expected return on assets of $45 million, lower service cost of $20 million, coupled with lower partially offset by higher interest cost of $30 $24 million and other movements of $4 $2 million.

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

RewordedMD&A
The pre-tax charge As a result, the tax assessment amount of $176 million was recorded as a reduction of net revenues in marketing, administration and research costs in the consolidated statements of earnings for the year ended December 31, 2023 2025, and was included in the SSEA, CIS & MEA Europe segment results.

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

RewordedMD&A
Net revenues related to smoke-free, excluding wellness and healthcare, refer to the operating revenues generated from the sale of these products, including shipping product, primarily associated with oral and handling charges billed to customers, net of sales and promotion incentives, and excise taxes, if applicable. intra-oral delivery systems.

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

RewordedMD&A
Our total cigarette and HTU shipment volume in the Region decreased by 3.9% 1.5% to 63.9 billion units, mainly due to Mexico 213.1 billion, with decreases in Poland (down by 9.8%) 9.4%) and Argentina France (down by 7.9%), partly offset by Brazil Italy (up by 12.8%). 3.1%) and Spain (up by 4.9%).

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

Quiet changesMD&A
In addition, we will be renaming renamed our “PMI Duty Free” business to “PMI Global Travel Retail” effective in the first quarter of 2025.

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

Quiet changesMD&A
Our cost of sales consists principally primarily of: tobacco leaf, non-tobacco raw materials, labor and manufacturing costs; shipping and handling costs; and the cost of devices produced by third-party electronics manufacturing service providers.

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

Quiet changesMD&A
There has been some short-term disruption in countries that have implemented the ban, most notably in Italy, but the impact has generally been limited in time and magnitude.

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

Quiet changesMD&A
Certain regulators jurisdictions are considering generation sales bans, which prohibit the sale of certain tobacco or nicotine products to people born after a certain particular year.

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

Quiet changesMD&A
The EU Single-Use Plastics Directive, which will require requires tobacco manufacturers and importers to cover the costs of public collection systems for tobacco product filters, under Extended Producer Responsibility ("EPR") schemes, came into force on July 2, 2019.

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

Quiet changesMD&A
The MRTP renewal applications were timely filed in accordance with FDA direction, and we believe that we should be are permitted to continue to use the modified exposure claim with respect to those products that received exposure modification orders until the FDA decides on our MRTP renewal applications.

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

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