What changed in this filing

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Item 1. Financial Statements

2025-04-29 compared with 2024-10-31 · 349 added, 524 removed, 776 unchanged (53% of the section changed)

5 unchanged sentences

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September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Cash and cash equivalents $ 4,726 $ 3,127

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Finished product 310 278

Income taxes 204 496

Other current assets 34 129

13 unchanged sentences

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September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Current portion of long-term debt $ 2,631 $ 1,527

4 unchanged sentences

Other 1,957 1,780

Deferred gain from the sale of IQOS System commercialization rights

Dividends payable 1,727 1,732

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Accumulated other comprehensive losses ( 2,691 ) ( 2,400 )

Cost of repurchased stock

( 1,109,485,036 shares at September 30, 2024 and

1,042,499,542 shares at December 31, 2023)

Cost of repurchased stock ( 1,120,403,743 shares at March 31, 2025 and 1,115,309,450 shares at December 31, 2024)

( 42,505 ) ( 42,194 )

Total stockholders’ equity (deficit) attributable to Altria ( 3,510 ) ( 2,238 )

Noncontrolling interests 50 50

Noncontrolling interest 50 50

Total stockholders’ equity (deficit) ( 3,460 ) ( 2,188 )

6 unchanged sentences

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For the Nine Months Ended September 30, For the Three Months Ended September 30,

2024 2023 2024 2023

For the Three Months Ended March 31, 2025 2024

Net revenues $ 5,259 $ 5,576

3 unchanged sentences

Marketing, administration and research costs 588 606

Asset impairment 354 — — —

Impairment of goodwill 873 —

Operating income 1,788 2,674

2 unchanged sentences

(Income) losses from investments in equity securities ( 143 ) ( 295 )

Gain on the sale of IQOS System commercialization rights

( 2,700 ) — — —

Earnings before income taxes 1,683 2,739

9 unchanged sentences

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For the Nine Months Ended September 30, For the Three Months Ended September 30,

2024 2023 2024 2023

For the Three Months Ended March 31, 2025 2024

Net earnings $ 1,077 $ 2,129

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Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

for the Nine Months Ended September 30, 2024 and 2023

For the Three Months Ended March 31, 2025 and 2024

(in millions of dollars, except per share data)

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Losses Cost of

Interests Total

Interest Total

Stockholders’

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Other — — — — ( 3 ) — ( 3 )

Balances, September 30, 2024

Balances, March 31, 2025

$ 935 $ 5,883 $ 34,868 $ ( 2,691 ) $ ( 42,505 ) $ 50 $ ( 3,460 )

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Repurchases of common stock — ( 360 ) (1)

Other — — — — ( 5 ) — ( 5 )

Balances, September 30, 2023

— — ( 2,040 ) — ( 2,400 )

See notes to condensed consolidated financial statements.

Altria Group, Inc.

and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

for the Three Months Ended September 30, 2024 and 2023

( in millions of dollars, except per share data)

_______________________________________

Attributable to Altria

Stock Additional

Capital Earnings

Business Accumulated

Comprehensive

Losses Cost of

Interests Total

Stockholders’

Equity (Deficit)

Balances, June 30, 2024

$ 935 $ 5,876 $ 33,651 $ ( 2,283 ) $ ( 41,195 ) $ 50 $ ( 2,966 )

Net earnings — — 2,293 — — — 2,293

Other comprehensive earnings (losses), net of deferred income taxes

— — — ( 334 ) — — ( 334 )

Stock award activity

— 14 — — — — 14

Cash dividends declared ($ 1.02 per share)

— — ( 1,738 ) — — — ( 1,738 )

Repurchases of common stock — — — — ( 680 ) — ( 680 )

Other — — — — ( 20 ) — ( 20 )

Balances, September 30, 2024

$ 935 $ 5,890 $ 34,206 $ ( 2,617 ) $ ( 41,882 ) $ 50 $ ( 3,418 )

Balances, June 30, 2023

$ 935 $ 5,880 $ 30,340 $ ( 2,709 ) $ ( 38,273 ) $ 50 $ ( 3,777 )

Net earnings — — 2,166 — — — 2,166

Other comprehensive earnings (losses), net of deferred income taxes

— — — 238 — — 238

Stock award activity

— 15 — — — — 15

Cash dividends declared ($ 0.98 per share)

— — ( 1,739 ) — — — ( 1,739 )

Repurchases of common stock — — — — ( 260 ) — ( 260 )

Balances, September 30, 2023

Balances, March 31, 2024

$ 935 $ 5,521 $ 31,535 $ ( 2,266 ) $ ( 40,839 ) $ 50 $ ( 5,064 )

(1) Represents the remaining 15 % of the Repurchase Price related to the ASR transactions.

Background and Basis of Presentation .

See notes to condensed consolidated financial statements.

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For the Nine Months Ended September 30, 2024 2023

For the Three Months Ended March 31, 2025 2024

Cash Provided by (Used in) Operating Activities

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Unrecognized tax benefit — 33

Fair value adjustment for NJOY Transaction contingent payments 25 —

(Income) losses from investments in equity securities ( 143 ) ( 295 )

Gain on the sale of IQOS System commercialization rights

Dividends from ABI 139 163

Asset impairment 354 —

Impairment of goodwill 873 —

Cash effects of changes:

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Proceeds from the ABI Transaction (1)

Proceeds from the sale of IQOS System commercialization rights

Acquisition of NJOY, net of cash acquired — ( 2,751 )

Other, net ( 5 ) ( 2 )

Net cash provided by (used in) investing activities $ ( 43 ) $ 2,316

(1) 2023 relates to unrecognized tax benefit from the ordinary loss for cash tax purposes with respect to a portion of our tax basis associated with our former investment in JUUL, partially offset by our estimated corporate alternative minimum tax credit carryforward.

2023 amounts have been reclassified to conform to the current year presentation.

(2) 2023 amounts are net of the effects from the NJOY Transaction.

Acquisition of NJOY .

(1) See Note 6.

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For the Nine Months Ended September 30, 2024 2023

For the Three Months Ended March 31, 2025 2024

Cash Provided by (Used in) Financing Activities

Proceeds from short-term borrowings $ — $ 2,000

Repayment of short-term borrowings — ( 2,000 )

Long-term debt issued $ 997 $ —

Long-term debt repaid — ( 1,121 )

Repurchases of common stock (1)

( 326 ) ( 2,400 )

Dividends paid on common stock ( 1,730 ) ( 1,733 )

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The following table provides a reconciliation of cash, cash equivalents and restricted cash (2) to the amounts reported on our condensed consolidated balance sheets:

At September 30, 2024 At December 31, 2023

March 31, 2025 December 31, 2024

Cash and cash equivalents $ 4,726 $ 3,127

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Cash, cash equivalents and restricted cash $ 4,750 $ 3,158

(1) 2024 includes $ 360 million ( 15 % of the Repurchase Price) paid in March 2024 related to the ASR transactions.

Background and Basis of Presentation .

(2) Restricted cash consisted of cash deposits collateralizing appeal bonds posted by PM USA to obtain stays of judgments pending appeals.

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▪ Background:

At September 30, 2024, our wholly owned subsidiaries included Philip Morris USA Inc.

At March 31, 2025, our wholly owned subsidiaries included Philip Morris USA Inc.

(“PM USA”), which is engaged in the manufacture and sale of cigarettes in the United States;

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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 products (“MST”) and snus products;

Helix Innovations LLC (“Helix”), which operates in the United States, and Helix Innovations GmbH and its affiliates (“Helix International”), which operate in certain other countries, are engaged in the manufacture and sale of oral nicotine pouches;

Smokeless Tobacco Company LLC (“USSTC”), is engaged in the manufacture and sale of moist smokeless tobacco (“MST”) products;

Helix Innovations LLC (“Helix”), which operates in the United States, and its foreign affiliates (“Helix International”), which operate in certain other countries, 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.

Other wholly owned subsidiaries included Altria Group Distribution Company (“AGDC”), which provides sales and distribution services to our domestic 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 by our subsidiaries.

At September 30, 2024, 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 September 30, 2024, we also owned a 75 % economic interest in Horizon Innovations LLC (“Horizon”), a joint venture with JTI (US) Holding, Inc., a subsidiary of Japan Tobacco Inc., which owned the remaining 25 % economic interest.

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 (NJOY’s pod-based e-vapor product) in the United States, which became effective on March 31, 2025.

For further discussion, see Note 14.

Contingencies .

Other wholly owned subsidiaries included Altria Group Distribution Company (“AGDC”), which provides sales and distribution services to our domestic 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, 2025, 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, 2025, we owned a 75 % economic interest in Horizon Innovations LLC (“Horizon”), a joint venture with JTI (US) Holding, Inc., 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 September 30, 2024, we had investments in Anheuser-Busch InBev SA/NV (“ABI”) and Cronos Group Inc.

In March 2024, we sold a portion of our investment in ABI (“ABI Transaction”).

For further discussion of our investments and the ABI Transaction, see Note 6.

At March 31, 2025, Horizon had no products in the U.S.

At March 31, 2025, we had investments in Anheuser-Busch InBev SA/NV (“ABI”) and Cronos Group Inc.

For further discussion of our investments, see Note 6.

Investments in Equity Securities .

▪ Dividends and Share Repurchases:

In August 2024, our Board of Directors (“Board of Directors” or “Board”) approved a 4.1 % increase in the quarterly dividend rate to $ 1.02 per share of our common stock versus the previous rate of $ 0.98 per share.

The current annualized dividend rate is $ 4.08 per share.

Future dividend payments remain subject to the discretion of our Board.

In January 2023, our Board of Directors authorized a $ 1.0 billion share repurchase program (“January 2023 share repurchase program”), which we completed in December 2023.

In January 2024, our Board of Directors authorized a new $ 1.0 billion share repurchase program that it increased to $ 3.4 billion in March 2024 (as increased, “January 2024 share repurchase program”).

We entered into accelerated share repurchase (“ASR”) transactions under two separate agreements with bank counterparties (collectively, “ASR Agreements”) to repurchase shares of our common stock having an aggregate value of $ 2.4 billion (“Repurchase Price”).

In the first half of 2024, we paid the Repurchase Price and received 53.9 million shares of our common stock.

The total number of shares repurchased under the ASR Agreements was based on volume-weighted average prices of our common stock during the term of the ASR transactions, less a discount.

We funded the ASR transactions with proceeds from the ABI Transaction.

The ASR transactions were accounted for as equity transactions and included in cost of repurchased stock on our condensed consolidated balance sheet when the shares were received.

At September 30, 2024, we had $ 310 million remaining under the January 2024 share repurchase program.

▪ Share Repurchases:

In January 2025, our Board of Directors (“Board of Directors” or “Board”) authorized a new $ 1.0 billion share repurchase program (“January 2025 share repurchase program”), which we expect to complete by December 31, 2025.

At March 31, 2025, we had $ 674 million remaining under the January 2025 share repurchase program.

The timing of share repurchases depends upon marketplace conditions and other factors, and the program remains subject to the discretion of our Board.

In January 2024, our Board authorized a $ 1.0 billion share repurchase program that it increased to $ 3.4 billion in March 2024 (as increased, “January 2024 share repurchase program”).

We subsequently entered into accelerated share repurchase (“ASR”) transactions under two separate agreements with bank counterparties (collectively, “ASR Agreements”) to repurchase shares of our common stock having an aggregate value of $ 2.4 billion (“Repurchase Price”).

In the first quarter of 2024, we paid the Repurchase Price and received 46.5 million shares of our common stock, which represented an aggregate value of approximately 85 % or $ 2,040 million of the Repurchase Price based on the closing price per share of our common stock on the date we entered into the ASR Agreements.

At March 31, 2024, the remaining $ 360 million was recorded as a reduction in additional paid in capital on our condensed consolidated balance sheet.

We funded the ASR transactions with proceeds from our sale of a portion of our investment in ABI (“ABI Transaction”).

For further information on the ABI Transaction, see Note 6.

Investments in Equity Securities.

The ASR transactions were accounted for as equity transactions and included in cost of repurchased stock on our condensed consolidated balance sheet when the shares were received.

We completed the January 2024 share repurchase program in December 2024.

Our share repurchase activity was as follows:

For the Nine Months Ended September 30, For the Three Months Ended September 30,

For the Three Months Ended March 31,

(in millions, except per share data) 2025 2024

2023 2024 2023

Total number of shares repurchased 5.7 46.5

Aggregate cost of shares repurchased (1)

$ 326 $ 2,040

Average price per share of shares repurchased $ 56.97 $ 43.87

(1) Includes 53.9 million shares repurchased under the ASR Agreements at an average price per share of $ 44.50 .

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(1) At March 31, 2024, $ 360 million ( 15 % of the Repurchase Price) remained as a reduction in additional paid in capital on our condensed consolidated statement of stockholders’ equity (deficit) until final settlement of the ASR transactions in the second quarter of 2024.

▪ Basis of Presentation:

Our interim condensed consolidated financial statements are unaudited.

These interim condensed consolidated financial statements have been prepared in conformity with United States generally accepted accounting principles (“GAAP”) and such principles are applied on a consistent basis.

Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been omitted.

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.

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Net revenues and net earnings for any interim period are not necessarily indicative of results that may be expected for the entire year.

These 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, 2023.

On January 1, 2024, we adopted Accounting Standards Update (“ASU”) 2022-03, Fair Value Measurement (Topic 820):

Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU No.

This guidance clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value.

This guidance also specifies required disclosures for equity securities subject to contractual sale restrictions.

We applied ASU No.

2022-03 for the fair value disclosure of our investment in ABI.

For further discussion, see Note 6.

Investments in Equity Securities.

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, 2024.

Certain immaterial prior year amounts have been reclassified to conform with the current year’s presentation.

For a description of issued accounting guidance applicable to, but not yet adopted by, us, see Note 15.

New Accounting Guidance Not Yet Adopted .

Acquisition of NJOY

On June 1, 2023, we acquired NJOY Holdings (“NJOY Transaction”), which provided us with full global ownership of NJOY’s e-vapor product portfolio, including NJOY ACE .

The total consideration for the NJOY Transaction of approximately $ 2.9 billion consisted of approximately $ 2.75 billion in cash payments (net of cash acquired) plus 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’s menthol ($ 250 million), blueberry ($ 125 million) and watermelon ($ 125 million) pod products.

The fair value of these contingent payments at December 31, 2023 and on the acquisition date was approximately $ 130 million, which was included in the total consideration.

In the second quarter of 2024, the FDA issued marketing granted orders for four NJOY menthol e-vapor products.

As a result, we became obligated to make cash payments totaling $ 250 million under the acquisition agreement, which we made in July 2024.

Additionally, we recorded a pre-tax charge of approximately $ 140 million for the change in the fair value of contingent payments for the nine months ended September 30, 2024.

At September 30, 2024, the fair value of the remaining contingent payments, which relate to blueberry and watermelon pod products, was approximately $ 20 million.

Contingent payments related to the NJOY Transaction were recognized at their estimated fair value as of the acquisition date.

Subsequent changes to the fair value of the liability resulting from contingent payments are recognized in earnings until the contingency is resolved.

In determining the estimated fair value of contingent payments, we made certain judgments, estimates and assumptions, the most significant of which was the likelihood of certain potential regulatory outcomes.

Contingent payments are classified in Level 3 of the fair value hierarchy.

Costs incurred for the NJOY Transaction are recognized as expenses in the period in which the costs are incurred and are included in our condensed consolidated statement of earnings as follows:

For the Nine Months Ended September 30, For the Three Months Ended September 30,

(in millions) 2024 2023 2024 2023

Marketing, administration and research costs:

Change in fair value of contingent payments $ 140 $ — $ — $ —

Other costs (1)

Interest and other debt expense, net:

Financing fees — 9 — 1

Total NJOY Transaction costs $ 187 $ 63 $ 44 $ 14

(1) For the nine and three months ended September 30, 2024, substantially all of these costs were acquisition-related costs associated with patent infringement lawsuits related to the NJOY Transaction.

For further discussion of the patent infringement lawsuits, see Note 14.

Contingencies .

For the nine months ended September 30, 2023, substantially all of these costs were acquisition-related costs, consisting primarily of transaction costs.

We funded the initial NJOY Transaction cash payments at closing through a combination of borrowings under a $ 2.0 billion term loan facility, the issuance of commercial paper and available cash.

For further discussion regarding the term loan facility, see Note 12.

We accounted for this acquisition as a business combination.

On June 1, 2024, we finalized our purchase price allocation for the NJOY Transaction.

The amounts in the table below represent the final purchase price allocation to the assets acquired and

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liabilities assumed in the NJOY Transaction, including measurement period adjustments made during the three months ended March 31, 2024.

(in millions) Preliminary Purchase Price Allocation Measurement Period Adjustments Final Purchase Price Allocation

Cash and cash equivalents $ 22 $ — $ 22

Receivables 7 — 7

Inventories 19 — 19

Other assets 7 — 7

Property, plant and equipment 16 — 16

Other intangible assets:

Developed technology (amortizable) 1,000 — 1,000

Trademarks (amortizable) 230 ( 40 ) 190

Supplier agreements (amortizable)

180 ( 180 ) —

Accounts payable ( 7 ) — ( 7 )

Accrued liabilities ( 20 ) — ( 20 )

Deferred income taxes ( 167 ) 66 ( 101 )

Total identifiable net assets 1,287 ( 154 ) 1,133

Total consideration 2,901 — 2,901

$ 1,614 $ 154 $ 1,768

The excess of the total consideration over the identifiable net assets acquired in the NJOY Transaction primarily reflects the value of future growth opportunities in the e-vapor category.

No ne of the goodwill or other intangible assets is deductible for tax purposes.

The significant assumptions used in determining the fair values of the identifiable intangible assets included volume growth rates, operating margins, the assessment of acquired technology life cycles and discount rates.

We determined the fair values of the identifiable intangible assets using an income approach.

The fair value measurements were primarily based on significant inputs that are not observable in the market, such as discounted cash flow analyses, and thus were classified in Level 3 of the fair value hierarchy.

We amortize these intangible assets over a weighted-average period of approximately 18 years.

Revenues from Contracts with Customers

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Segment Reporting .

I n 2023, substantially all cash discounts, offered in contracts with our customers for prompt payment, were based on a flat rate per unit based on agreed-upon payment terms .

Beginning in the first quarter of 2024 for PM USA and USSTC, cash discounts in contracts with our customers were based on a percentage of the list price based on agreed-upon payment terms.

Substantially all cash discounts in contracts with our customers are based on a percentage of the list price based on agreed-upon payment terms.

We record receivables net of the cash discounts on our condensed consolidated balance sheets.

Receivables and deferred revenue associated with contracts with customers were as follows:

(in millions) September 30, 2024 December 31, 2023

(in millions) March 31, 2025 December 31, 2024

Receivables $ 258 $ 177

Deferred revenue 183 215

At September 30, 2024 and December 31, 2023, we did not expect differences between amounts recorded as receivables and amounts that would be subsequently received;

At March 31, 2025 and December 31, 2024, we did not expect differences between amounts recorded as receivables and amounts that would be subsequently received;

therefore, we did no t record an allowance for credit losses against these receivables.

We record payments received by our businesses in advance of product shipment as deferred revenue.

We record deferred revenue when our businesses receive payment in advance of product shipment.

These payments are included in other accrued liabilities on our condensed consolidated balance sheets until control of such products is obtained by the customer.

When cash is received in advance of product shipment, our companies satisfy their performance obligations within three days of receiving payment.

At September 30, 2024 and December 31, 2023, there were no differences between amounts recorded as deferred revenue from contracts with customers and amounts subsequently recognized as revenue.

When cash is received in advance of product shipment, our companies typically satisfy their performance obligations within three days of receiving payment.

At March 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.

We record an allowance for returned goods, which is included in other accrued liabilities on our condensed consolidated balance sheets.

It is USSTC’s policy to accept authorized sales returns from its customers for products that have passed the

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freshness date printed on product packaging due to the limited shelf life of USSTC’s MST and snus products.

It is USSTC’s policy to accept authorized sales returns from its customers for products that have passed the freshness date printed on product packaging due to the limited shelf life of USSTC’s MST products.

We record estimated sales returns, which are based principally on historical volume and return rates, as a reduction to revenues.

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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 (“Program”) .

Our responsibility is limited to making payment on the terms originally negotiated with our supplier, regardless of whether our supplier sells its receivable to a financial institution.

We pay the third-party intermediary a nominal fee to administer the Program.

Under the terms of the agreement with our third-party intermediary, ALCS has a direct obligation to pay the participating financial institutions or the participating suppliers when payment obligations are due, unless such obligations are satisfied by the applicable ALCS affiliate.

Additionally, Altria guarantees the obligations of ALCS to those parties.

We do not enter into agreements with any of the participating financial institutions in connection with the Program.

The range of payment terms we negotiate with our suppliers (up to 120 days) is consistent irrespective of whether a supplier participates in the Program.

We have no economic interest in a supplier’s sale of a receivable.

Once a qualifying supplier elects to participate in the Program and reaches an agreement with a participating third-party financial institution, the qualifying supplier elects which individual invoices it sells to the financial institution.

All outstanding balances under the Program are recorded in accounts payable on our condensed consolidated balance sheets, and the associated payments are included in operating activities within our condensed consolidated statements of cash flows.

At September 30, 2024 and December 31, 2023, confirmed outstanding obligations under the Program were $ 115 million and $ 119 million, respectively.

At March 31, 2025 and December 31, 2024, confirmed outstanding obligations under the Program were $ 135 million and $ 128 million, respectively.

Goodwill and Other Intangible Assets, net

Goodwill and other intangible assets, net, were as follows:

Goodwill Other Intangible Assets, net

(in millions) September 30, 2024 December 31, 2023 September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

(in millions) Goodwill Other Intangible Assets, net Goodwill Other Intangible Assets, net

Smokeable products segment $ 99 $ 2,930 $ 99 $ 2,936

Oral tobacco products segment 5,078 8,670 5,078 8,679

Other 1,768 1,614 1,379 1,658

895 1,336 1,768 1,358

Total $ 6,072 $ 12,936 $ 6,945 $ 12,973

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

Other intangible assets consisted of the following:

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

(in millions) Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization

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Total other intangible assets $ 13,710 $ 774 $ 13,710 $ 737

At September 30, 2024, 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.

At March 31, 2025, 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 (which includes developed technology), certain cigarette trademarks, e-vapor 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 $ 102 million and $ 87 million for the nine months ended September 30, 2024 and 2023, respectively, and $ 38 million and $ 42 million for the three months ended September 30, 2024 and 2023, respectively.

We estimate our annualized amortization expense, which includes the impact of the NJOY Transaction and related measurement period adjustments, for each of the next five years to be approximately $ 150 million, assuming no additional transactions occur that require the amortization of intangible assets.

On April 30, 2024, we assigned the exclusive U.S.

commercialization rights to the IQOS Tobacco Heating System (“ IQOS System”) to Philip Morris International Inc.

(“PMI”) pursuant to the terms of a purchase agreement entered into with PMI in October 2022 (“ IQOS Transaction”).

In exchange for the assignment of the U.S.

commercialization rights to the IQOS System, we received total cash payments of approximately $ 2.8 billion ($ 1.0 billion in 2022 and $ 1.8 billion, including interest, in the third quarter of 2023), $ 2.7 billion of which was classified as a deferred gain on our condensed consolidated balance sheet at December 31, 2023.

Upon the assignment of the U.S.

commercialization rights to the IQOS System, we recorded a pre-tax gain of $ 2.7 billion for the nine months ended September 30, 2024 in our condensed consolidated statements of earnings.

Pre-tax amortization expense for definite-lived intangible assets during the three months ended March 31, 2025 and 2024 was $ 37 million and $ 27 million, respectively.

The changes in goodwill and net carrying amount of intangible assets were as follows:

For the Nine Months Ended For the Year Ended

September 30, 2024 December 31, 2023

For the Three Months Ended For the Year Ended

March 31, 2025 December 31, 2024

(in millions) Goodwill Other Intangible Assets, net Goodwill Other Intangible Assets, net

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— — 154 ( 220 )

Asset impairment

Impairments (2)

( 873 ) — — ( 354 )

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Balance at end of period $ 6,072 $ 12,936 $ 6,945 $ 12,973

(1) Substantially all of the 2023 amounts are attributable to the NJOY Transaction.

The 2024 amounts represent the measurement period adjustments made during the three months ended March 31, 2024 related to the NJOY Transaction.

For additional information regarding the NJOY Transaction, see Note 2.

Acquisition of NJOY .

We conduct a required annual review of goodwill and indefinite-lived intangibles for potential impairment, 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 September 30, 2024.

(1) Amounts represent the measurement period adjustments related to the NJOY Transaction.

(2) The 2025 amount represents a non-cash impairment of our e-vapor reporting unit goodwill.

The 2024 amount represents a non-cash, pre-tax impairment of the Skoal trademark.

We conduct a required annual review of goodwill and indefinite-lived intangible assets for potential impairment, and more frequently if an event occurs or circumstances change that would require us to perform an interim quantitative impairment assessment.

Except for the factors leading us to perform a quantitative assessment for the e-vapor reporting unit as discussed below, there have been no events or changes in circumstances that indicate an interim quantitative impairment assessment was required as of March 31, 2025.

We will perform our annual impairment testing during the fourth quarter of 2025.

At December 31, 2023, the estimated fair value of the Skoal trademark exceeded its carrying value of $ 3.9 billion by approximately 6 % ($ 0.2 billion).

Sales volumes of MST products, including Skoal , have been negatively impacted due in part to evolving adult tobacco consumer preferences, which has resulted in consumers increasingly moving across tobacco categories.

In connection with the preparation of our financial statements for the period ended June 30, 2024, we evaluated the accelerated growth of innovative tobacco products, including oral nicotine pouches, and the related increase in competitive activity among tobacco categories, which have contributed to reductions in sales volumes for MST products, including Skoal .

We concluded that the expected impact from the sales volume declines on the Skoal trademark represented a triggering event, and as a result of this conclusion, we performed an interim impairment assessment as of June 30, 2024.

As a result of (i) lower projected revenue and income due to lower volume assumptions, (ii) a decrease in the perpetual growth rate to 0 % ( 1 % at October 1, 2023 valuation) and (iii) an increase in the discount rate to 11.5 % ( 11.0 % at October 1, 2023 valuation), we

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determined the estimated fair value of the Skoal trademark as of June 30, 2024, was below its carrying value and recorded a non-cash, pre-tax impairment of $ 354 million during the second quarter of 2024 in our condensed consolidated statements of earnings.

Our estimate of the fair value and carrying value of the Skoal trademark at June 30, 2024 was $ 3.6 billion, after recording the impairment.

We used an income approach to estimate the fair value of the Skoal trademark.

At December 31, 2024, the estimated fair value of the e-vapor reporting unit exceeded its carrying value by approximately 28 % ($ 0.3 billion).

As further discussed in Note 14.

Contingencies , Altria and certain of our affiliates, including NJOY, are defendants in lawsuits alleging patent infringement based on the sale of NJOY ACE in the United States.

In January 2025, the 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, after the 60 -day review period ended without the United States Trade Representative taking action.

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 for the e-vapor reporting unit.

As a result of our interim impairment testing, we determined the estimated fair value of the e-vapor reporting unit as of March 31, 2025, was below its carrying value and recorded a non-cash goodwill impairment of $ 873 million for the three months ended March 31, 2025 in our condensed consolidated statements of earnings.

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.

Our discounted cash flows are based on a range of scenarios that consider certain potential regulatory and market outcomes.

The income approach reflects the discounting of expected future cash flows at a rate of return that incorporates the risk-free rate for the use of those funds, the expected rate of inflation and the risks associated with realizing expected future cash flows.

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All significant inputs used in the valuation are classified in Level 3 of the fair value hierarchy.

Our annual impairment test of goodwill and indefinite-lived intangible assets as of October 1, 2023 resulted in no impairment charges.

At September 30, 2024 and December 31, 2023, there were no accumulated impairment losses related to goodwill.

As a result of the ITC orders, in connection with the preparation of our condensed consolidated financial statements for the period ended March 31, 2025, we also reviewed the definite-lived intangible assets in the e-vapor reporting unit for impairment and concluded the carrying value was recoverable and no impairment existed.

Our annual impairment test of goodwill and indefinite-lived intangible assets as of October 1, 2024 resulted in no impairment charges for the fourth quarter of 2024.

At March 31, 2025, accumulated impairment losses related to goodwill were $ 873 million, which related to the all other category.

At December 31, 2024, there were none .

Exit and Implementation Costs

For the three months ended March 31, 2025, we recorded pre-tax implementation costs of $ 15 million in marketing, administration and research costs in our condensed consolidated statements of earnings, of which $ 13 million was recorded in our smokeable products segment and $ 2 million was recorded in our oral tobacco products segment.

For the three months

ended March 31, 2025, we had no exit costs.

There were no exit or implementation costs for the three months ended March 31, 2024.

In October 2024, we announced a multi-phase Optimize & Accelerate initiative (“Initiative”) designed to modernize our ways of working.

Through the Initiative, we plan to increase our organization’s speed, efficiency and effectiveness by centralizing work, outsourcing certain transactional tasks and streamlining, automating and standardizing processes.

We expect the design and detailed plans for all phases of the Initiative to be substantially complete in early 2026.

We estimate total pre-tax charges for the Initiative’s initial phases of approximately $ 100 million to $ 125 million.

As of March 31, 2025, total pre-tax charges since the inception of the Initiative were $ 83 million, consisting of employee separation cost of $ 35 million and implementation costs of $ 48 million.

We expect to record the majority of the remaining costs for these initial phases in the second quarter of 2025.

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.

Employee separation costs are recorded when probable and reasonably estimable.

As we further develop and finalize detailed plans for the additional phases of the Initiative, we will update estimated pre-tax charges for the Initiative.

As of March 31, 2025, total cash payments since the inception of the Initiative were $ 29 million, consisting of $ 1 million for exit costs and $ 28 million for implementation costs.

A summary of the Initiative’s charges and cash paid for exit and implementation costs are as follows:

(in millions) Exit Costs Implementation Costs Total

Balances at December 31, 2023 $ — $ — $ —

Charges 35 33 68

Cash paid — ( 11 ) ( 11 )

Balances at December 31, 2024 35 22 57

Charges — 15 15

Cash paid ( 1 ) ( 17 ) ( 18 )

Balances at March 31, 2025 $ 34 (1) $ 20 $ 54

(1) Restructuring liabilities, all of which were severance liabilities.

Investments in Equity Securities

The carrying amount of our investments consisted of the following:

(in millions) September 30, 2024 December 31, 2023

(in millions) March 31, 2025 December 31, 2024

ABI $ 7,798 $ 7,880

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$ 8,105 $ 8,195

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

For the Nine Months Ended September 30, For the Three Months Ended September 30,

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

For the Three Months Ended March 31,

(in millions) 2025 2024

$ ( 125 ) $ ( 313 ) (2)

$ ( 401 ) $ ( 121 ) $ ( 61 )

(Income) losses from investments under equity method of accounting ( 530 ) ( 355 ) ( 116 ) ( 58 )

(Income) losses from investments in equity securities $ ( 143 ) $ ( 295 )

(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 United States generally accepted accounting principles (“GAAP”) and (ii) adjustments to our investments required under the equity method of accounting.

(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.

(2) Includes $ 165 million of the total pre-tax gain on the ABI Transaction discussed below.

(3) Represents loss as a result of the disposition of our JUUL equity securities discussed below.

Investment in ABI

Prior to March 14, 2024, we had an approximate 10 % ownership interest in ABI, consisting of approximately 185 million restricted shares of ABI (“Restricted Shares”) and approximately 12 million ordinary shares of ABI.

At March 31, 2025, we had an approximate 8.1 % 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:

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▪ have director nomination rights with respect to ABI.

On March 14, 2024, we converted 60 million shares of our Restricted Shares to ordinary shares of ABI.

In March 2024, we completed the ABI Transaction, which consisted of the following:

▪ We sold 35 million ordinary shares of ABI in a global secondary offering for gross proceeds of approximately $ 2.2 billion.

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.

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, 2025, the fair value of our investment in ABI was $ 9.8 billion, which exceeded its carrying value of $ 7.8 billion by approximately 26 %.

At December 31, 2024, the fair value of our investment in ABI approximated its carrying value of $ 7.9 billion.

2024 ABI Transaction

In the first quarter of 2024, we converted 60 million of our Restricted Shares into ordinary shares of ABI and completed the ABI Transaction, which consisted of the following:

▪ We sold 35 million of our ABI ordinary shares in a global secondary offering for gross proceeds of approximately $ 2.2 billion.

▪ We sold $ 200 million of our ABI ordinary shares (approximately 3.3 million ordinary shares) to ABI in a private transaction.

At September 30, 2024, we had an approximate 8.1 % ownership interest in ABI, consisting of approximately 125 million Restricted Shares and approximately 34 million ordinary shares of ABI.

As a result of the ABI Transaction, in the first quarter of 2024, we received pre-tax cash proceeds totaling approximately $ 2.4 billion and incurred transaction costs of approximately

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$ 62 million.

In conjunction with the ABI Transaction, we entered into the ASR Agreements.

As a result of the ABI Transaction, in the first quarter of 2024, we received pre-tax cash proceeds totaling approximately $ 2.4 billion and incurred transaction costs of approximately $ 62 million.

In conjunction with the ABI Transaction, we entered into the ASR Agreements to repurchase shares of our common stock.

For further discussion of the ASR Agreements, see Note 1.

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As a result of the ABI Transaction, we recorded the following pre-tax amounts in our condensed consolidated statement of earnings:

(in millions) For the Nine Months Ended September 30, 2024

(in millions) For the Three Months Ended March 31, 2024

Gain on partial sale of our investment $ 165

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▪ The pre-tax transaction costs were approximately $ 62 million ($ 59 million in marketing, administration and research costs and $ 3 million in interest and other debt expense, net), substantially all of which were underwriter fees.

In addition, in conjunction with the ABI Transaction, we recorded an income tax benefit from the partial release of a valuation allowance of approximately $ 94 million in provision for income taxes in our condensed consolidated statement of earnings for the nine months ended September 30, 2024.

For further discussion, see Note 13.

Income Taxes .

We expect to maintain two seats on ABI’s board of directors through ABI’s 2025 annual general meeting.

Following that meeting, as a result of our reduced ownership interest in ABI following the ABI Transaction, we expect to have one seat on ABI’s board of directors, in accordance with our rights as a holder of Restricted Shares.

We will continue to 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 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 was classified in Level 2 of the fair value hierarchy.

We can convert our Restricted Shares to ordinary shares at our discretion.

The fair value of each Restricted Share is based on the value of an ordinary share.

The fair value of our investment in ABI at September 30, 2024 and December 31, 2023 was $ 10.5 billion and $ 12.7 billion, respectively, which exceeded its carrying value of $ 7.8 billion and $ 9.7 billion, respectively, by approximately 34 % and 32 %, respectively.

Investment in Cronos

At September 30, 2024, we had an approximate 41.0 % ownership interest in Cronos, consisting of approximately 157 million shares, which we account for under the equity method of accounting.

At March 31, 2025, we had an approximate 40.6 % 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 September 30, 2024, the fair value of our investment in Cronos exceeded its carrying value by approximately $ 39 million or approximately 13 %.

At December 31, 2023, the fair value of our investment in Cronos was less than its carrying value by $ 8 million or approximately 2 %.

Former Investment in JUUL Labs, Inc.

In March 2023, we entered into a stock transfer agreement with JUUL under which we transferred to JUUL all of our beneficially owned JUUL equity securities and, in exchange, received a non-exclusive, irrevocable global license to certain of JUUL’s heated tobacco intellectual property.

In addition, all other agreements between us and JUUL were terminated or we were removed as parties thereto, other than certain litigation-related agreements and a license agreement relating to our non-trademark licensable intellectual property rights in the e-vapor field, which remain in force solely with respect to our e-vapor intellectual property as of or prior to March 3, 2023.

As a result of the stock transfer agreement, for the nine months ended September 30, 2023, we recorded a non-cash, pre-tax loss of $ 250 million on the disposition of our JUUL equity securities in (income) losses from investments in equity securities in our condensed consolidated statement of earnings.

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At March 31, 2025, the fair value of our investment in Cronos was less than its carrying value by approximately $ 25 million or approximately 8 %.

Based on our evaluation of the duration and magnitude of the fair value decline, our evaluation of Cronos’s financial condition (including its strong cash position) and near-

term prospects, and our intent and ability to hold our investment in Cronos until recovery, we concluded that the decline in fair value of our investment in Cronos below its carrying value is temporary and, therefore, no impairment was recorded.

At December 31, 2024, the fair value of our investment in Cronos approximated its carrying value of $ 315 million.

Financial Instruments

We enter into derivative financial instruments to mitigate the potential impact of certain market risks, including foreign currency exchange rate risk.

We use various types of derivative financial instruments, including forward contracts, options and swaps.

We do not enter into or hold derivative financial instruments for trading or speculative purposes.

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 certain foreign exchange contracts, including cross-currency swap contracts and forward contracts (collectively, “foreign currency contracts”), and Euro denominated unsecured long-term notes (“foreign currency denominated debt”) as net investment hedges of our investment in ABI.

At September 30, 2024 and December 31, 2023, we had no outstanding foreign currency contracts.

When we have foreign currency contracts in effect, counterparties are domestic and international financial institutions.

Under these contracts, we are exposed to potential losses in the event of non-performance by these counterparties.

We manage our credit risk by entering into transactions with counterparties that have investment grade credit ratings, limiting the amount of exposure we have with each counterparty and monitoring the financial condition of each counterparty.

The counterparty agreements contain provisions that require us to maintain an investment grade credit rating.

In the event our credit rating falls below investment grade, counterparties to our foreign currency contracts can require us to post collateral.

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, 2025 and December 31, 2024, we had no outstanding foreign currency contracts.

The aggregate carrying value and fair value of our total long-term debt were as follows:

(in millions) September 30, 2024 December 31, 2023

(in millions) March 31, 2025 December 31, 2024

Carrying value $ 26,059 $ 24,926

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dollar exchange rate in accumulated other comprehensive losses related to ABI.

We recognized pre-tax (gains) losses of our net investment hedges of $ 29 million and $( 32 ) million for the nine months ended September 30, 2024 and 2023, respectively, and $ 127 million and $( 101 ) million for the three months ended September 30, 2024 and 2023, respectively, in accumulated other comprehensive losses.

In addition, as a result of the ABI Transaction, for the nine months ended September 30, 2024, we reclassified $ 42 million of pre-tax gains from our designated net investments hedges included in accumulated other comprehensive losses to (income) losses from investments in equity securities in our condensed consolidated statement of earnings.

For the three months ended March 31, 2025 and 2024, we recognized pre-tax (gains) losses of our net investment hedges of $ 139 million and $( 75 ) million, respectively.

In addition, as a result of the ABI Transaction, for the three months ended March 31, 2024, we reclassified $ 42 million of pre-tax gains from our designated net investment hedges included in accumulated other comprehensive losses to (income) losses from investments in equity securities in our condensed consolidated statement of earnings.

For further discussion of the ABI Transaction and reclassification of accumulated other comprehensive losses, see Note 6.

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Other Comprehensive Earnings/Losses.

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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’s menthol ($ 250 million), blueberry ($ 125 million) and watermelon ($ 125 million) pod products.

We made cash payments totaling $ 250 million in the second quarter of 2024 following FDA authorization of NJOY’s menthol pod products.

In the first quarter of 2025, we recorded a non-cash, pre-tax charge of approximately $ 25 million for the increase in the fair value of contingent payments, which relate to blueberry and watermelon pod products.

At March 31, 2025 and December 31, 2024, the fair values of the remaining contingent payments were approximately $ 45 million and $ 20 million, respectively.

Contingent payments related to the NJOY Transaction were recognized at their estimated fair value as of the acquisition date.

Subsequent changes to the fair value of the liability associated with contingent payments are recognized in earnings until the contingency is resolved.

Contingent payments are classified in Level 3 of the fair value hierarchy.

Benefit Plans

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Net periodic benefit cost (income) consisted of the following:

Pension Postretirement Pension Postretirement

For the Nine Months Ended September 30, For the Three Months Ended September 30,

Pension Postretirement

For the Three Months Ended March 31,

(in millions) 2025 2024 2025 2024

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Prior service cost (credit) 1 1 ( 10 ) ( 10 )

4 4 ( 30 ) ( 30 ) 1 1 ( 10 ) ( 10 )

Net periodic benefit cost (income) $ ( 5 ) $ ( 19 ) $ 3 $ 8

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 salaried employees that cannot be funded under Internal Revenue Service (“IRS”) regulations.

We made employer contributions of $ 13 million to our pension plans and did no t make any contributions to our postretirement plans during the nine months ended September 30, 2024.

Currently, we anticipate making additional employer contributions of up to approximately $ 5 million to our pension plans and no contributions to our postretirement plans in 2024.

We made employer contributions of $ 5 million to our pension plans and did no t make any contributions to our postretirement plans during the three months ended March 31, 2025.

Currently, we anticipate making additional employer contributions of up to approximately $ 25 million to our pension plans and contributions of up to approximately $ 30 million to our postretirement plans in 2025.

However, the foregoing estimates of 2025 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.

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We calculated basic and diluted earnings per share (“EPS”) using the following:

For the Nine Months Ended September 30, For the Three Months Ended September 30,

For the Three Months Ended March 31,

(in millions) 2025 2024

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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.

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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 Nine Months Ended September 30, 2024

For the Three Months Ended March 31, 2025

(in millions) Benefit Plans ABI Currency

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

Balances, September 30, 2024 $ ( 1,497 ) $ ( 1,131 ) $ 11 $ ( 2,617 )

For the Three Months Ended September 30, 2024

(in millions) Benefit Plans ABI Currency

Adjustments and Other Accumulated

Comprehensive

Balances, June 30, 2024

( 23 ) ( 291 )

Other comprehensive earnings (losses) before reclassifications

( 423 ) ( 2 ) ( 425 )

Deferred income taxes — 92 — 92

Other comprehensive earnings (losses) before reclassifications, net of deferred income taxes

— ( 331 ) ( 2 ) ( 333 )

Amounts reclassified to net earnings ( 2 ) 1 — ( 1 )

Deferred income taxes — — — —

Amounts reclassified to net earnings, net of deferred income taxes ( 2 ) 1 — ( 1 )

Other comprehensive earnings (losses), net of deferred income taxes ( 2 ) ( 330 ) (1)

( 2 ) ( 334 )

Balances, September 30, 2024 $ ( 1,497 ) $ ( 1,131 ) $ 11 $ ( 2,617 )

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For the Nine Months Ended September 30, 2023

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

For the Three Months Ended March 31, 2024

(in millions) Benefit Plans ABI Currency

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Other comprehensive earnings (losses), net of deferred income taxes ( 1 ) 402 (1)

Balances, September 30, 2023 $ ( 1,452 ) $ ( 1,067 ) $ 48 $ ( 2,471 )

For the Three Months Ended September 30, 2023

(in millions) Benefit Plans ABI Currency

Adjustments and Other Accumulated

Comprehensive

Balances, June 30, 2023

$ ( 1,447 ) $ ( 1,303 ) $ 41 $ ( 2,709 )

Other comprehensive earnings (losses) before reclassifications

Deferred income taxes — ( 69 ) — ( 69 )

Other comprehensive earnings (losses) before reclassifications, net of deferred income taxes

Amounts reclassified to net earnings ( 7 ) ( 14 ) — ( 21 )

Deferred income taxes 2 3 — 5

Amounts reclassified to net earnings, net of deferred income taxes ( 5 ) ( 11 ) — ( 16 )

Other comprehensive earnings (losses), net of deferred income taxes ( 5 ) 236 (1)

Balances, September 30, 2023 $ ( 1,452 ) $ ( 1,067 ) $ 48 $ ( 2,471 )

Balances, March 31, 2024 $ ( 1,494 ) $ ( 793 ) $ 21 $ ( 2,266 )

(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.

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Financial Instruments.

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

For the Nine Months Ended September 30, For the Three Months Ended September 30,

For the Three Months Ended March 31,

(in millions) 2025 2024

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Net loss $ 11 $ 7

Prior service cost (credit) ( 26 ) ( 26 ) ( 9 ) ( 9 )

( 5 ) ( 21 ) ( 2 ) ( 7 )

258 ( 5 ) 1 ( 14 )

Prior service credit ( 9 ) ( 9 )

Pre-tax amounts reclassified from accumulated other comprehensive losses to net earnings $ ( 12 ) $ 253

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(2) Amounts are included in (income) losses from investments in equity securities.

For the nine months ended September 30, 2024, as a result of the ABI Transaction, we reclassified $ 243 million from our accumulated other comprehensive losses of which $ 285 million is directly attributable to ABI, partially offset by $ 42 million from our designated net investment hedges related to our investment in ABI.

For the three months ended March 31, 2024, as a result of the ABI Transaction, we reclassified $ 243 million from our accumulated other comprehensive losses of which $ 285 million is directly attributable to ABI, partially offset by $ 42 million from our designated net investment hedges related to our investment in ABI.

For further information, see Note 6.

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Segment Reporting

At September 30, 2024, our reportable segments were (i) smokeable products, consisting of combustible cigarettes and machine-made large cigars;

and (ii) oral tobacco products, consisting of MST, snus and oral nicotine pouches.

Our all other category included (i) NJOY (beginning June 1, 2023);

At March 31, 2025, 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.

Our all other category included (i) NJOY;

(ii) Horizon;

(iii) Helix International;

and (iv) other business activities, all of which consists of research and development (“R&D”) expense related to certain new product platforms and technologies.

Our chief operating decision maker (“CODM”) reviews operating companies income (loss) (“OCI”) to evaluate the performance of, and allocate resources to, our segments.

OCI for our segments is defined as operating income before general corporate expenses and amortization of intangibles.

and (iv) other business activities, which primarily consists of research and development (“R&D”) expense related to certain new product platforms and technologies.

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.

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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 4.

Goodwill and Other Intangible Assets, net.

Segment data were as follows:

For the Nine Months Ended September 30, For the Three Months Ended September 30,

For the Three Months Ended March 31,

(in millions) 2025 2024

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(Income) losses from investments in equity securities ( 143 ) ( 295 )

Gain on the sale of IQOS System commercialization rights

( 2,700 ) — — —

Earnings before income taxes $ 1,683 $ 2,739

The comparability of OCI for our reportable segments was affected by the following:

▪ Non-Participating Manufacturer (“NPM”) Adjustment Items:

We recorded net pre-tax income for NPM adjustment items as follows:

For the Nine Months Ended September 30, For the Three Months Ended September 30,

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) 2025 2024

Smokeable products segment $ ( 29 ) $ ( 15 ) $ ( 23 ) $ ( 15 )

Interest and other debt expense, net 2 — 2 —

Total $ ( 27 ) $ ( 15 ) $ ( 21 ) $ ( 15 )

We recorded the amounts shown in the table above in our smokeable products segment as reductions to cost of sales in our condensed consolidated statements of earnings, which resulted in increased OCI in our smokeable products segment.

NPM adjustment items result from the resolutions of certain disputes with states and territories related to the NPM adjustment provision under the Master Settlement Agreement (“NPM Adjustment Items”).

For further discussion, see Health Care Cost Recovery Litigation in Note 14.

Net revenues $ 4,622 $ 4,906

Settlement charges (1)

( 687 ) ( 855 )

Excise taxes on products sold ( 715 ) ( 834 )

Other segment items (2)

( 751 ) ( 778 )

Operating companies income $ 2,469 $ 2,439

(1) Represents charges related to State Settlement Agreements included in cost of sales.

For additional information, see Health Care Cost Recovery Litigation in Note 14.

Contingencies .

▪ Asset Impairment:

We recorded a non-cash, pre-tax impairment of the Skoal trademark of $ 354 million for the nine months ended September 30, 2024 in our oral tobacco products segment.

For further discussion, see Note 5.

Goodwill and Other Intangible Assets, net.

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(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, excise taxes on products sold and other costs.

Total oral tobacco products other segment items were $ 221 million and $ 216 million for the three months ended March 31, 2025 and 2024, 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.

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

For the Three Months Ended March 31,

(in millions) 2025 2024

Depreciation expense:

Smokeable products $ 15 $ 19

Oral tobacco products 10 9

General corporate and other 9 10

Total depreciation expense $ 34 $ 38

Capital expenditures:

Smokeable products $ 18 $ 18

Oral tobacco products 13 9

General corporate and other 7 8

Total capital expenditures $ 38 $ 35

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 Nine Months Ended September 30, For the Three Months Ended September 30,

For the Three Months Ended March 31,

(in millions) 2025 2024

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Contingencies .

▪ Other Business Activities:

Our R&D investments have evolved and shifted from our traditional tobacco businesses to new product platforms and technologies.

Beginning January 1, 2024, our R&D expense is aligned with how our CODM now evaluates performance results and allocates resources for segment reporting.

For the nine and three months ended September 30, 2024, using this approach, we recorded the majority of our pre-tax R&D expense of $ 165 million and $ 61 million, respectively, in our all other category, which now includes other business activities related to R&D expense for certain new product platforms and technologies.

For the nine and three months ended September 30, 2023, the majority of our pre-tax R&D expense of $ 149 million and $ 51 million, respectively, was recorded in our smokeable products segment.

Short-term Borrowings and Borrowing Arrangements

At September 30, 2024 and December 31, 2023, we had no short-term borrowings.

In June 2023, we entered into a $ 2.0 billion term loan facility and borrowed the full amount available to fund a portion of the cash payments at the closing of the NJOY Transaction.

In July 2023, upon receipt of the remaining payment of approximately $ 1.8 billion (including interest) from PMI related to the sale of the IQOS System commercialization rights, we repaid the term loan facility in full.

At March 31, 2025 and December 31, 2024, 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, 2028 and includes an option, subject to certain conditions, for us to extend the term for two additional one-year periods.

We intend to use any borrowings under our Credit Agreement for general corporate purposes.

At September 30, 2024, we had availability under our Credit Agreement for borrowings of up to an aggregate principal amount of $ 3.0 billion.

At March 31, 2025, we had availability under our 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 September 30, 2024 was 1.0 % based on our long-term senior unsecured debt ratings on that date.

(“Moody’s”) and Standard & Poor’s Financial Services LLC (“S&P”).

The applicable percentage for borrowings under our Credit Agreement at March 31, 2025 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 as of the end of the applicable quarter on a rolling four quarters basis.

At September 30, 2024, we were in compliance with our covenants in our Credit Agreement.

At March 31, 2025, 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.

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Long-term Debt

The aggregate carrying value of our total long-term debt at September 30, 2024 and December 31, 2023 was $ 25.2 billion and $ 26.2 billion, respectively.

During the first quarter of 2024, we repaid in full at maturity our 4.000 % and 3.800 % senior unsecured notes in the aggregate principal amounts of $ 776 million and $ 345 million, respectively.

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At September 30, 2024 and December 31, 2023, accrued interest on long-term debt of $ 209 million and $ 410 million, respectively, was included in other accrued liabilities on our condensed consolidated balance sheets.

The aggregate carrying value of our total long-term debt at March 31, 2025 and December 31, 2024 was $ 26.1 billion and $ 24.9 billion, respectively.

In February 2025, we issued U.S.

dollar denominated senior unsecured notes in the aggregate principal amount of $ 1.0 billion.

The net proceeds from the notes are being used for general corporate purposes, which may include the repayment of our 2.350 % senior unsecured notes due May 2025 and our 1.700 % senior unsecured notes due June 2025.

The notes contain the following terms:

▪ $ 0.5 billion at 4.875 %, due 2028, interest payable semiannually beginning August 4, 2025;

▪ $ 0.5 billion at 5.625 %, due 2035, interest payable semiannually beginning August 6, 2025.

Similar to our other notes, these notes are senior unsecured obligations and rank equally in right of payment with all of our existing and future senior unsecured indebtedness.

Following the occurrence of both (i) a change of control of Altria and (ii) the notes ceasing to be rated investment grade by each of Moody’s, S&P and Fitch Ratings Inc., we will be required to make an offer to purchase the notes at a price equal to 101 % of the aggregate principal amount of such notes, plus accrued and unpaid interest to the date of repurchase as and to the extent set forth in the terms of the notes.

At March 31, 2025 and December 31, 2024, accrued interest on long-term debt of $ 256 million and $ 389 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 7.

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Earnings before income taxes, provision for income taxes and income tax rates consisted of the following:

For the Nine Months Ended September 30, For the Three Months Ended September 30,

For the Three Months Ended March 31,

(in millions) 2025 2024

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Income tax rate 36.0 % 22.3 %

Our income tax rate for the nine months ended September 30, 2024 differs from the U.S.

federal statutory rate of 21%, due primarily to state tax expense, partially offset by an income tax benefit from the partial release of a valuation allowance recorded against a deferred tax asset associated with our JUUL-related losses.

Our income tax rate for the three months ended March 31, 2025 differs from the U.S.

federal statutory rate of 21%, due primarily to the non-deductible impairment of the e-vapor reporting unit goodwill and state tax expense.

For further discussion of the impairment charge, see Note 4.

Goodwill and Other Intangible Assets, net .

Our income tax rate for the three months ended March 31, 2024 differs from the U.S.

The valuation allowance release was due to our capital gain on the ABI Transaction.

Our income tax rate for the three months ended September 30, 2024 differs from the U.S.

federal statutory rate of 21%, due primarily to state tax expense.

Our income tax rate for the nine months ended September 30, 2023 differs from the U.S.

federal statutory rate of 21%, due primarily to state tax expense and a valuation allowance recorded against a deferred tax asset related to the disposition of our former investment in JUUL.

Our income tax rate for the three months ended September 30, 2023 differs from the U.S.

federal statutory rate of 21%, due primarily to state tax expense.

The following chart provides a reconciliation of the beginning and ending valuation allowances for the nine months ended September 30, 2024:

(in millions)

Balance at beginning of year $ 2,256

Additions to valuation allowance charged to income tax expense 7

Releases of valuation allowance credited to income tax benefit ( 94 )

Foreign currency translation 1

Reductions to valuation allowance due to NJOY Transaction (no impact to earnings)

Balance at end of period $ 2,166

We determine deferred tax assets and liabilities based on the differences between the financial statement and tax bases of assets and liabilities, using enacted tax rates in effect for the year in which the differences are expected to reverse.

We record a valuation allowance when it is more likely than not that some portion or all of a deferred tax asset will not be realized.

We determine the realizability of deferred tax assets based on the weight of all available positive and negative evidence.

In reaching this determination, we consider the character of the assets and the possible sources of taxable income of the appropriate character within the carryback and carryforward periods available under the tax law.

There is a potential that sufficient positive evidence may be available in future periods to cause us to further reduce or eliminate the valuation allowance on certain deferred tax assets.

That change to the valuation allowance would result in the recognition of previously unrecognized deferred tax assets and a decrease in income tax expense in the period the release would be recorded.

The changes in the valuation allowances for the nine months ended September 30, 2024 were due primarily to the ABI Transaction.

The cumulative valuation allowance at September 30, 2024 was primarily attributable to deferred tax assets recorded in connection with the unrealized capital losses related to our former investment in JUUL and our investment in Cronos.

As we continue to evaluate all sources of potential income that may become available to utilize these losses, our valuation allowance position may change.

For further discussion of the ABI transaction, see Note 6.

Investments in Equity Securities.

Agreement with the IRS

In October 2024, we entered into an agreement with the IRS regarding the tax treatment of the $ 6.4 billion ordinary loss we recognized in 2023 for cash tax purposes with respect to a portion of our tax basis associated with our former investment in JUUL.

We fully reserved for the tax benefit associated with this ordinary loss by recording an unrecognized tax benefit in

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As a result of the agreement, we expect to record a tax benefit of approximately $ 0.9 billion in our consolidated statement of earnings in the fourth quarter of 2024 for the reversal of the unrecognized tax benefit, which results in the partial release of a valuation allowance against our JUUL-related losses.

Consistent with the terms of the agreement, we claimed a $ 4.0 billion ordinary loss and a $ 2.4 billion capital loss on our 2023 tax return.

After giving effect to the agreement and $ 1.7 billion of capital losses previously utilized against capital gains related to the IQOS Transaction, we have $ 5.6 billion (which includes $ 0.9 billion of capital loss carryforwards available to offset capital gains through 2028) of the $ 12.8 billion tax loss related to our former investment in JUUL remaining to offset future potential capital gains.

For financial statement purposes, none of the tax benefit for the $ 5.6 billion has been recognized .

Contingencies

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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 Nine Months Ended September 30, For the Three Months Ended September 30,

For the Three Months Ended March 31,

(in millions) 2025 2024

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Pre-tax charges for related interest costs were included in interest and other debt expense, net in our condensed consolidated statements of earnings.

After exhausting all appeals in those cases resulting in adverse verdicts associated with tobacco-related litigation, since October 2004, PM USA has paid judgments and settlements (including related costs and fees) totaling approximately $ 1.1 billion and interest totaling approximately $ 242 million as of September 30, 2024.

These amounts include payments for Engle progeny judgments (and related costs and fees) totaling approximately $ 452 million and related interest totaling approximately $ 62 million.

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To obtain stays of judgments pending appeal, PM USA has posted various forms of security.

As of September 30, 2024, PM USA has posted appeal bonds totaling approximately $ 31 million, which have been collateralized with restricted cash and are included in assets on our condensed consolidated balance sheets.

As of March 31, 2025, PM USA has posted appeal bonds totaling approximately $ 24 million, which have been collateralized with restricted cash and are included in assets on our condensed consolidated balance sheets.

Overview of Tobacco-Related Litigation

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Plaintiffs’ theories of recovery and the defenses raised in tobacco-related litigation are discussed below.

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The table below lists the number of certain tobacco-related cases pending in the United States against us as of:

October 28, 2024 October 23, 2023 October 24, 2022

April 24, 2025 April 22, 2024 April 24, 2023

Individual Smoking and Health Cases (1)

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Other Tobacco-Related Cases (4)

(1) Includes as of October 28, 2024, 19 cases filed in Illinois, 17 cases filed in New Mexico, 74 cases filed in Massachusetts, 11 cases filed in Oregon, two cases filed in Hawaii and 26 non- Engle cases filed in Florida.

(1) Includes as of April 24, 2025, 32 cases filed in Illinois, 14 cases filed in New Mexico, 84 cases filed in Massachusetts, 15 cases filed in Oregon, five cases filed in Hawaii and 24 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 ).

Also does not include approximately 146 Broin cases.

Also does not include 14 Broin cases pending as of April 24, 2025.

For further discussion of the Broin cases, see Other Smoking and Health Class Actions below.

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(3) 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 October 28, 2024, the remaining cases include 20 individual cases that opted out of the settlement, 16 class action lawsuits ( three class action lawsuits pending in Canada and 13 class actions participating in the settlement but pending dismissal) and one individual state court case relating to the Multidistrict Litigation.

Also includes 38 cases brought by Native American tribes that are subject to a separate settlement and are pending dismissal.

For further discussion of the Multidistrict Litigation settlement and the settlement of the cases brought by Native American tribes, see E-vapor Product Litigation below.

(4) Includes as of October 28, 2024, one inactive smoking and health case alleging personal injury and purporting to be brought on behalf of a class of individual plaintiffs and two inactive class action lawsuits alleging that use of the terms “Lights” and “Ultra Lights” constitute deceptive and unfair trade practices, common law or statutory fraud, unjust enrichment, breach of warranty or violations of RICO.

Pending final dismissal of these cases, as of April 24, 2025, the remaining cases include 20 individual cases that opted out of the settlement, three 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.

(4) Includes as of April 24, 2025, one inactive smoking and health case alleging personal injury and purporting to be brought on behalf of a class of individual plaintiffs and two inactive class action lawsuits alleging that use of the terms “Lights” and “Ultra Lights” constitute deceptive and unfair trade practices, common law or statutory fraud, unjust enrichment, breach of warranty or violations of RICO.

International Tobacco-Related Cases:

As of October 28, 2024, (i) Altria is named as a defendant in three e-vapor class action lawsuits in Canada;

As of April 24, 2025, (i) Altria is named as a defendant in three e-vapor class action lawsuits in Canada;

(ii) PM USA is a named defendant in 10 health care cost recovery actions in Canada, eight of which also name Altria as a defendant;

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Tobacco-Related Cases Set for Trial:

As of October 28, 2024, one Engle progeny case, one individual smoking and health case and no e-vapor cases are set for trial through December 31, 2024.

As of April 24, 2025, two Engle progeny cases, two individual smoking and health cases and no e-vapor cases are set for trial through June 30, 2025.

Trial dates are subject to change.

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Of the 32 non- Engle progeny cases in which verdicts were returned in favor of plaintiffs, 27 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 October 28, 2024.

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 24, 2025.

Smoking and Health Litigation

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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.

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:

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Charts listing certain verdicts for plaintiffs in the Engle progeny cases can be found in Smoking and Health Litigation - Engle Progeny Trial Results below.

In March 2025, a jury in a Massachusetts state court returned a verdict in favor of plaintiff and against PM USA and R.J.

Reynolds Tobacco Company (“R.J.

Reynolds”), awarding an aggregate of $ 4 million in compensatory damages against PM USA and R.J.

Reynolds and $ 25 million in punitive damages against PM USA.

PM USA has filed post-trial motions challenging the verdict and, if necessary, will appeal.

In April 2024, a jury in an Oregon state court returned a verdict in favor of plaintiff and against PM USA, awarding less than $ 1 million in compensatory damages.

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Plaintiff has appealed the judgment, and the appeal remains pending.

PM USA filed post-trial motions, which were denied, and PM USA

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has noticed an appeal from the final judgment and the trial court’s denial of the post-trial motions.

PM USA filed post-trial motions, which were denied, and PM USA has noticed an appeal from the final judgment and the trial court’s denial of the post-trial motions.

The parties filed a motion to stay execution pending appeal, and the court has stayed execution of the final judgment pending conclusion of appellate activity.

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PM USA’s appeal remains pending, and plaintiff has noticed a cross-appeal.

In April 2025, the Hawaii Supreme Court granted plaintiff’s application to transfer the appeal to that Court from the Intermediate Court of Appeals.

In February 2023, a jury in a Massachusetts state court returned a verdict in favor of plaintiff and against PM USA, awarding $ 5 million in compensatory damages.

There was no claim for punitive damages.

Following the denial of PM USA’s post-trial motions, PM USA appealed the judgment to the Appeals Court of Massachusetts, and the appeal remains pending.

Following the denial of PM USA’s post-trial motions, PM USA appealed the judgment to the Appeals Court of Massachusetts, which affirmed the judgment in January 2025.

Accordingly, we recorded a pre-tax charge of $ 5 million and paid the recorded amount in the first quarter of 2025.

In September 2022, a jury in a Massachusetts state court returned a verdict in favor of plaintiff and against PM USA, awarding approximately $ 8 million in compensatory damages and $ 1 billion in punitive damages.

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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 October 28, 2024, approximately 223 state court cases were pending against PM USA or Altria asserting individual claims by or on behalf of approximately 256 state court plaintiffs.

As of April 24, 2025, approximately 89 state court cases were

pending against PM USA or Altria asserting individual claims by or on behalf of approximately 109 state court plaintiffs.

Because of a number of factors, including docketing delays, duplicated filings and overlapping dismissal orders, these numbers are estimates.

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Engle Progeny Trial Results:

As of October 28, 2024, 146 federal and state Engle progeny cases involving PM USA have resulted in verdicts.

As of April 24, 2025, 147 federal and state Engle progeny cases involving PM USA have resulted in verdicts.

Eighty-eight were returned in favor of plaintiffs, five of which have been reversed post-trial or on appeal and remain pending.

Fifty-eight verdicts were returned in favor of PM USA, two of which have been reversed post-trial or on appeal and remain pending.

In addition, there have been a number of mistrials, only some of which have resulted in new trials as of October 28, 2024.

Post-trial activity in a case can result in final resolution that differs from the initial verdict.

Fifty-nine verdicts were returned in favor of PM USA, two of which have been reversed post-trial or on appeal and remain pending.

In addition, there have been a number of mistrials, only some of which have resulted in new trials as of April 24, 2025.

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 punitive damages juries have awarded, declared mistrials and vacated judgments, in whole or in part, with respect to compensatory and punitive damages awards.

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.

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Cases also have been dismissed with or without prejudice before or after a verdict.

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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 October 28, 2024 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.

In this Note 14.

Contingencies , references to “R.J.

Reynolds” are to R.J.

Reynolds Tobacco Company.

The first chart lists cases that are pending as of April 24, 2025 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.

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Reynolds Broward $ 2 million

Appeal to the Fourth District Court of Appeal pending.

Fourth District Court of Appeal affirmed judgment, and time for a petition for rehearing has not yet expired.

Cooper ( Blackwood )

September 2015 PM USA and R.J.

Reynolds Broward $ 5 million

(<$ 1 million PM USA)

September 2015 PM USA Broward <$ 1 million

Retrial of punitive damages claim pending.

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Reynolds Miami-Dade $ 1 million

Duignan February 2020 PM USA and R.J.

Reynolds Pinellas $ 4 million

Ferraiuolo November 2023 PM USA and R.J.

Reynolds Duval <$ 1 million

Garcia May 2021 PM USA Miami-Dade $ 3 million

Other Smoking and Health Class Actions:

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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 October 28, 2024, PM USA and Altria are named as defendants, along with other cigarette manufacturers, in seven class actions filed in the Canadian provinces of Alberta, Manitoba, Nova Scotia, Saskatchewan, British Columbia and Ontario.

As of April 24, 2025, PM USA and Altria are named as defendants, along with other cigarette manufacturers, in seven class actions filed in the Canadian provinces of Alberta, Manitoba, Nova Scotia, Saskatchewan, British Columbia and Ontario.

In Saskatchewan, British Columbia ( two separate cases) and Ontario, 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 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

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Companies’ Creditors Arrangement Act (which is similar to Chapter 11 bankruptcy in the United States).

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.

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.

As of October 28, 2024, PM USA is named as a defendant in approximately 146 cases brought by flight attendants against United States cigarette manufacturers seeking compensatory damages for personal injuries allegedly caused by exposure to environmental tobacco smoke (“ETS”).

As of April 24, 2025, PM USA is named as a defendant in 14 cases brought by flight attendants against United States cigarette manufacturers seeking compensatory damages for personal injuries allegedly caused by exposure to environmental tobacco smoke (“ETS”).

The flight attendants allege that they are members of an ETS smoking and health class action in Florida that was settled in 1997 ( Broin ).

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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.

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:

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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.

In addition, the OPMs are required to make quarterly payments settling plaintiffs’ attorneys’ fees, subject to an annual cap of $ 500 million, on a pro rata basis based on market share.

These quarterly payments will end in the fourth quarter of 2024.

For the three months ended September 30, 2024 and 2023, the aggregate amount recorded in cost of sales with respect to the State Settlement Agreements was approximately $ 900 million for each period.

For the nine months ended September 30, 2024 and 2023, the aggregate amount recorded in cost of sales with respect to the State Settlement Agreements was approximately $ 2.7 billion and $ 2.8 billion, respectively.

The OPMs’ obligation to make quarterly payments settling plaintiffs’ attorneys’ fees, subject to an annual cap of $ 500 million, on a pro rata basis based on market share, ended in the fourth quarter of 2024.

For the three months ended March 31, 2025 and 2024, the aggregate amount recorded in cost of sales with respect to the State Settlement Agreements was approximately $ 700 million and $ 900 million, respectively.

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

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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 “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.

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▪ Multi-State Settlement .

As of January 2022, a total of 36 states and territories had settled NPM Adjustment disputes relating to varying periods of time.

In March 2022, August 2023 and February 2024, Illinois, Iowa and Idaho, respectively, joined the multi-state settlement, bringing the total number of states and territories that have joined the multi-state settlement to 39 .

In the first quarter of 2022, PM USA recorded $ 80 million, $ 20 million of which related to the 2019 through 2021 “transition years,” as a reduction in cost of sales as a result of Illinois joining the multi-state settlement.

As a result of Iowa joining the multi-state settlement, PM USA will receive approximately $ 19 million for 2005 through 2022, $ 4 million of which relates to the 2020 through 2022 “transition years.” Accordingly, PM USA recorded $ 19 million as a reduction in cost of sales in the third quarter of 2023.

As a result of Idaho joining the multi-state settlement, PM USA will receive approximately $ 8 million for 2005 through 2023, $ 2 million of which relates to the 2021 through 2023 “transition years.” In connection with this development, PM USA recorded $ 8 million as a reduction in cost of sales in the first quarter of 2024.

Pursuant to the multi-state settlement, PM USA has received $ 1.37 billion since the first group of states entered the NPM Adjustment dispute settlement in 2014 and expects to receive annual credits applied against PM USA’s MSA payments through 2041.

As of December 2024, a total of 39 states and territories have joined the multi-state settlement.

Pursuant to this settlement, PM USA has received $ 1.37 billion since 2014 and expects to receive annual credits applied against PM USA’s MSA payments through 2041.

▪ New York Settlement.

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The arbitration encompasses three years , 2005 through 2007, for five of the six states, and one year , 2005, for one state.

As of October 28, 2024, the arbitration panel had issued decisions for Maryland, Washington and Wisconsin, finding Maryland and Wisconsin diligent for all three years and Washington not diligent for all three years .

As of April 24, 2025, the arbitration panel had issued decisions for Maryland, Washington, Wisconsin and Ohio, finding Maryland, Wisconsin and Ohio diligent for all three years and Washington not diligent for all three years .

Washington challenged that determination in Washington state court, and the challenge was denied by the trial court.

Washington has appealed that denial, and the appeal remains pending.

PM USA recorded $ 14 million as a reduction of 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 Adjustment it will receive.

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Reynolds and ITG concerning the tax rates used in the annual calculation of the net operating profit adjustment payments starting in 2018.

The Mississippi state court held a hearing in October 2021 and

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issued a decision in June 2022 granting the State’s motion.

The Mississippi state court held a hearing in October 2021 and issued a decision in June 2022 granting the State’s motion.

PM USA appealed the court’s decision in June 2024.

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In May 2023, PM USA and R.J.

Reynolds filed a motion in the United States 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.

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.

As of October 28, 2024, the court had not made a determination on damages.

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 intends to appeal.

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Reynolds and ITG concerning the same state tax issues raised by Mississippi and Texas.

The motion remains pending.

The court found in favor of the State of Minnesota.

As of April 24, 2025, the court had not made a determination on damages.

PM USA intends to appeal.

Federal Government’s Lawsuit:

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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.

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.

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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 38 “third party” cases brought by Native American tribes, which we separately agreed to settle in July 2024 and are pending dismissal.

We recorded a pre-tax provision for $ 20 million in the second quarter of 2024 related to the settlement of these cases and paid the settlement amount in October 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 settlement and paid the settlement amount in October 2024.

Neither settlement applies to three class action lawsuits pending in Canada, the cases brought by state attorneys general, discussed below, or 17 putative class action antitrust lawsuits.

For a description of the antitrust cases not subject to the settlement, see Antitrust Litigation below.

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Four of the “third party” lawsuits noted above against us and JUUL were initiated, individually, by the attorneys general of Alaska, Hawaii, Minnesota and New Mexico alleging violations of state consumer protection and other similar laws.

In April 2023, January 2024, February 2024 and April 2024, we agreed to settle the Minnesota, Alaska, Hawaii and New Mexico lawsuits, respectively, for immaterial amounts.

In May 2023, Fuma International LLC (“Fuma”) filed a lawsuit against Altria and our affiliates Nu Mark LLC (“Nu Mark”), AGDC, ALCS and NJOY in the United States District Court for the Eastern District of Virginia asserting claims of patent infringement based on the sale of various Nu Mark and NJOY products, including NJOY ACE , in the United States.

Between April 2023 and April 2024, we agreed to settle each of the Minnesota, Alaska, Hawaii and New Mexico lawsuits for immaterial amounts.

In May 2023, Fuma International LLC (“Fuma”) filed a lawsuit against Altria and our affiliates Nu Mark LLC (“Nu Mark”), AGDC, ALCS and NJOY in the U.S.

District Court for the Eastern District of Virginia asserting claims of patent infringement based on the sale of various Nu Mark and NJOY products, including NJOY ACE , in the United States.

In August 2023, we entered into an agreement with Fuma resulting in NJOY’s acquisition of the patents that Fuma asserted in its lawsuit.

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We recorded a pre-tax provision for $ 10 million in the third quarter of 2023 related to the agreement and paid such amount to Fuma in August 2023.

In June 2023, JUUL and VMR Products LLC (“VMR”) filed a lawsuit against Altria and our affiliates AGDC, ALCS, NJOY Holdings and NJOY in the United States District Court for the District of Arizona asserting claims of patent infringement based on the sale of NJOY ACE in the United States.

In June 2023, JUUL and VMR Products LLC (“VMR”) filed a 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 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 U.S.

International Trade Commission (“ITC”).

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.

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In October 2024, the ITC granted review of the ALJ’s initial determination with respect to aspects of two of the four patents.

The ITC must issue its final determination, including with respect to the form of remedy, if any, to be ordered, by December 23, 2024, subject to its right to grant itself an extension.

If the ITC issues an exclusion order, the ITC must send that order to the Office of the United States Trade Representative for review.

The Trade Representative would then have 60 days to review the ITC’s determination.

If the Trade Representative does not affirmatively reject the ITC’s determination, the determination automatically becomes final and takes effect after the 60 days have elapsed or earlier if the Trade Representative notifies the ITC of approval before the 60 days elapse.

A final exclusion order can be appealed to the United States Court of Appeals for the Federal Circuit, but a final exclusion order prohibiting the importation of NJOY ACE would be unlikely to be stayed during the pendency of such an appeal.

In January 2025, the ITC issued its final determination finding that NJOY ACE infringes the four patents plaintiff asserted and issued an exclusion order and cease-and-desist orders prohibiting the importation and sale of NJOY ACE in the United States.

The ITC sent its orders to the Office of the United States Trade Representative, which had 60 days to review the ITC’s determination.

The orders became effective on March 31, 2025 after the 60 -day review period ended without the United States Trade Representative taking action.

We intend to appeal the final exclusion order and cease-and-desist orders to the U.S.

Court of Appeals for the Federal Circuit, but the final exclusion order and cease-and-desist orders prohibiting the importation and sale of NJOY ACE will likely not be stayed during the pendency of the appeal.

In February 2025, we filed a motion for reconsideration of the ITC’s determination finding that NJOY ACE infringes the four patents plaintiff asserted, asking the ITC to reverse its determination that NJOY ACE infringes one of the four patents.

The ITC denied the motion in April 2025.

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 request to institute review as to four patents (including three of the patents that form the basis of the ALJ’s initial determination) and, in June 2024, granted Altria’s request to institute review as to one of the patents that forms the basis of the ALJ’s initial determination, which, as noted above, is being reviewed by the ITC.

The PTAB will conduct proceedings and issue its validity decision as to the one JUUL patent by June 2025, after which appeals may be filed with the United States Court of Appeals for the Federal Circuit.

In August 2023, NJOY filed a complaint against JUUL in the United States 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.

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.

The PTAB will issue its validity decision as to the one JUUL patent by June 2025, after which appeals may be filed with 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 is currently stayed.

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.

A hearing before the ALJ was held in June 2024, and the ALJ’s initial determination and recommendation is scheduled to be issued by December 6, 2024, subject to further extension by the ALJ.

Once the ALJ issues its initial determination and recommendation, the ITC’s review of the ALJ’s initial determination and recommendation will proceed in the same manner as discussed above with respect to VMR and JUUL’s action against NJOY.

The ITC must issue its final determination, including with respect to the form of remedy, if any, to be ordered, by April 7, 2025, subject to its right to grant itself an extension.

A hearing before the ALJ was held in June 2024.

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.

The ALJ also determined that, with respect to the asserted patents, NJOY did not satisfy the “domestic industry” requirement, which requires the party asserting a patent to show significant and substantial domestic investments, such as investments related to engineering, R&D or licensing, designed to exploit the patent.

Subsequently, in December 2024, NJOY petitioned the ITC to review the ALJ’s initial determination.

In March 2025, the ITC granted in part NJOY’s petition to review the ALJ’s initial determination.

On review, the ITC affirmed the ALJ’s initial determination that the JUUL products do not infringe the asserted patents and terminated the investigation.

We intend to appeal the ITC’s final determination to the U.S.

Court of Appeals for the Federal Circuit.

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.

The PTAB will conduct proceedings and issue its validity decisions by May 2025, after which appeals may be filed with the United States Court of Appeals for the Federal Circuit.

We, JUUL and VMR have engaged with a mediator to attempt to negotiate a resolution of the proceedings pending before the ITC, United States District Courts and the PTAB.

Based on the status of the negotiations and the proceedings before the ITC, United States District Courts and the PTAB, we have determined that a loss is not probable or reasonably estimable as of the date of this filing.

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The PTAB will conduct proceedings and issue its validity decisions by May 2025, after which appeals may be filed with the U.S.

Court of Appeals for the Federal Circuit.

We, JUUL and VMR previously engaged with a mediator to attempt to negotiate a resolution of the proceedings pending before the ITC, U.S.

District Courts and the PTAB.

The parties also have engaged in negotiations without a mediator.

Based on the status of the negotiations and the proceedings before the ITC, U.S.

District Courts and the PTAB, we have determined that a loss with respect to a negotiated resolution of such proceedings is not probable or reasonably estimable as of the date of this filing.

IQOS Litigation

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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.

Reynolds has filed a notice of appeal of the judgment, and the appeal remains pending.

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 July 2024, R.J.

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Reynolds obtained a sub-license to the asserted patents from JUUL in December 2023.

We have opposed the motion.

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 an evidentiary hearing.

As gains related to this lawsuit have not yet been determined to be realized or realizable in accordance with GAAP, they have not been recognized in our financial statements.

In November 2020, Healthier Choices Management Corp.

filed an additional unrelated patent infringement case in the U.S.

District Court for the Northern District of Georgia against PM USA and Philip Morris Products S.A.

seeking damages and equitable relief.

In February 2021, defendants filed a motion to dismiss the lawsuit, which the court granted in July 2021.

In December 2021, the U.S.

District Court denied plaintiff’s motion to amend the complaint and plaintiff appealed this ruling to the U.S.

Court of Appeals for the Federal Circuit, which reversed the district court’s decision and remanded for further proceedings.

On remand, the U.S.

District Court stayed the case pending the outcome of plaintiff’s appeal from a ruling by the U.S.

Patent and Trademark Office, which issued a decision that the claims of the asserted patent are not valid.

That appeal remains pending.

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.

Investments in Equity Securities for a discussion of our disposition of our investment in JUUL.

As of October 28, 2024, 17 putative class action lawsuits have been filed against Altria and JUUL in the U.S.

As of April 24, 2025, 17 putative class action lawsuits have been filed against Altria and JUUL in the U.S.

District Court for the Northern District of California.

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In the first quarter of 2023, we recorded pre-tax provisions totaling approximately $ 100 million related to the settlement, and in April 2023, paid $ 15 million to plaintiffs’ escrow account for attorneys’ fees.

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Certain Other Tobacco-Related Litigation

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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 October 28, 2024, two “Lights/Ultra Lights” class actions are pending in U.S.

As of April 24, 2025, two “Lights/Ultra Lights” class actions are pending in U.S.

state courts.

Neither case is active.

As of October 28, 2024, 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.

As of April 24, 2025, 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.

The case is currently inactive.

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Defenses raised in these cases have included lack of causation, assumption of the risk, comparative fault and/or contributory negligence, and statutes of limitations.

As of October 28, 2024, there is no such case pending against UST and/or its tobacco subsidiaries.

As of April 24, 2025, there is no such case pending against UST and/or its tobacco subsidiaries.

Environmental Regulation

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In the ordinary course of business, we have agreed to indemnify a limited number of third parties in the event of future litigation.

At September 30, 2024, we (i) had $ 45 million of unused letters of credit obtained in the ordinary course of business and (ii) were contingently liable for guarantees related to our own performance, including $ 19 million for surety bonds recorded on our condensed consolidated balance sheet.

At March 31, 2025, we (i) had $ 43 million of unused letters of credit obtained in the ordinary course of business and (ii) were contingently liable for guarantees related to our own performance, including $ 90 million for surety bonds.

In addition, from time to time, we issue lines of credit to affiliated entities.

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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 September 30, 2024 as the fair value of this indemnification is insignificant.

PMI has agreed not to seek indemnification with respect to the IQOS System patent litigation discussed above under IQOS Litigation, excluding the patent infringement case filed with the U.S.

District Court for the Northern District of Georgia.

We do not have a related liability recorded on our condensed consolidated balance sheet at March 31, 2025 as the fair value of this indemnification is insignificant.

PMI has agreed not to seek indemnification with respect to the active IQOS System patent litigation discussed above under IQOS Litigation .

As part of the supplier financing program, Altria guarantees the financial obligations of ALCS under the financing program agreement.

For further discussion of the supplier financing program, see Note 4.

Supplier Financing .

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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.

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Standards Description Effective Date for Public Entity Effect on Financial Statements

ASU 2023-07 Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures

The guidance will require disclosure of incremental segment information on an annual and interim basis.

The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The guidance will result in expanded footnote disclosures beginning in our annual consolidated financial statements for the year ending December 31, 2024.

ASU 2023-09 Income Taxes (Topic 740):

2023-09 Income Taxes (Topic 740):

Improvements to Income Tax Disclosures

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The guidance is effective for fiscal years beginning after December 15, 2024.

We are in the process of evaluating the impact of this guidance on our footnote disclosures.

ASU 2024-01 Compensation-Stock Compensation (Topic 718):

Scope Application of Profits Interest and Similar Awards

The guidance seeks to reduce ambiguity in the treatment of profits interest awards and provides specific guidance on whether a profits interest award should be accounted for as a share-based payment arrangement, or in a manner similar to a cash bonus or profit-sharing arrangement.

The guidance is effective for fiscal years beginning after December 15, 2024, and interim periods within those annual periods.

We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements and related disclosures.

The guidance will result in expanded disclosures beginning in our annual consolidated financial statements for the year ending December 31, 2025.

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.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements