What changed in this filing

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Item 1. Financial Statements

2025-07-30 compared with 2025-04-29 · 302 added, 191 removed, 934 unchanged (35% of the section changed)

5 unchanged sentences

______________________________

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Cash and cash equivalents $ 1,287 $ 3,127

19 unchanged sentences

________________________________________________

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Current portion of long-term debt $ 1,069 $ 1,527

19 unchanged sentences

Accumulated other comprehensive losses ( 2,831 ) ( 2,400 )

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

Cost of repurchased stock ( 1,125,015,255 shares at June 30, 2025 and 1,115,309,450 shares at December 31, 2024)

( 42,780 ) ( 42,194 )

9 unchanged sentences

_____________________________________

For the Three Months Ended March 31, 2025 2024

For the Six Months Ended June 30, For the Three Months Ended June 30,

2025 2024 2025 2024

Net revenues $ 11,361 $ 11,785 $ 6,102 $ 6,209

3 unchanged sentences

Marketing, administration and research costs 1,207 1,394 619 788

Asset impairment and exit costs 1 354 1 354

Impairment of goodwill 873 — — —

3 unchanged sentences

(Income) losses from investments in equity securities ( 291 ) ( 414 ) ( 148 ) ( 119 )

Gain on the sale of IQOS System commercialization rights

— ( 2,700 ) — ( 2,700 )

Earnings before income taxes 4,801 7,855 3,118 5,116

9 unchanged sentences

_____________________

For the Three Months Ended March 31, 2025 2024

For the Six Months Ended June 30, For the Three Months Ended June 30,

2025 2024 2025 2024

Net earnings $ 3,455 $ 5,932 $ 2,378 $ 3,803

2 unchanged sentences

ABI ( 414 ) 394 ( 145 ) ( 8 )

Currency translation adjustments and other ( 23 ) 6

Currency translation adjustments ( 20 ) ( 2 ) 3 ( 8 )

Other comprehensive earnings (losses), net of deferred income taxes ( 431 ) 390 ( 140 ) ( 17 )

4 unchanged sentences

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

For the Three Months Ended March 31, 2025 and 2024

for the Six Months Ended June 30, 2025 and 2024

(in millions of dollars, except per share data)

18 unchanged sentences

Other — — — — ( 6 ) — ( 6 )

Balances, March 31, 2025

Balances, June 30, 2025

$ 935 $ 5,895 $ 35,525 $ ( 2,831 ) $ ( 42,780 ) $ 50 $ ( 3,206 )

9 unchanged sentences

Repurchases of common stock — ( 18 ) — — ( 2,392 ) — ( 2,410 )

Other — — — — ( 24 ) — ( 24 )

Balances, June 30, 2024

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

See notes to condensed consolidated financial statements.

Altria Group, Inc.

and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

for the Three Months Ended June 30, 2025 and 2024

( in millions of dollars, except per share data)

_______________________________________

Attributable to Altria

Stock Additional

Capital Earnings

Business Accumulated

Comprehensive

Losses Cost of

Interest Total

Stockholders’

Equity (Deficit)

Balances, March 31, 2025

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

Net earnings — — 2,378 — — — 2,378

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

— — — ( 140 ) — — ( 140 )

Stock award activity

— 12 — — 2 — 14

Cash dividends declared ($ 1.02 per share)

— — ( 1,721 ) — — — ( 1,721 )

Repurchases of common stock — — — — ( 274 ) — ( 274 )

Other — — — — ( 3 ) — ( 3 )

Balances, June 30, 2025

$ 935 $ 5,895 $ 35,525 $ ( 2,831 ) $ ( 42,780 ) $ 50 $ ( 3,206 )

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.

Net earnings — — 3,803 — — — 3,803

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

— — — ( 17 ) — — ( 17 )

Stock award activity

— 13 — — — — 13

Cash dividends declared ($ 0.98 per share)

— — ( 1,687 ) — — — ( 1,687 )

Repurchases of common stock — 342 (1) — — ( 352 ) — ( 10 )

Other — — — — ( 4 ) — ( 4 )

Balances, June 30, 2024

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

(1) Represents the fair value of the shares received at final settlement of the ASR Agreements that were transferred to cost of repurchased stock.

For further discussion, see Note 1.

Background and Basis of Presentation .

5 unchanged sentences

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For the Three Months Ended March 31, 2025 2024

For the Six Months Ended June 30, 2025 2024

Cash Provided by (Used in) Operating Activities

2 unchanged sentences

Depreciation and amortization 142 139

Deferred income tax provision (benefit) 26 ( 138 )

Deferred income tax provision 33 444

Unrecognized tax benefit — 88

1 unchanged sentence

(Income) losses from investments in equity securities ( 291 ) ( 414 )

Gain on the sale of IQOS System commercialization rights

Dividends from ABI 181 139

Asset impairment and exit costs, net of cash paid ( 4 ) 354

Impairment of goodwill 873 —

23 unchanged sentences

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For the Three Months Ended March 31, 2025 2024

For the Six Months Ended June 30, 2025 2024

Cash Provided by (Used in) Financing Activities

2 unchanged sentences

Repurchases of common stock ( 600 ) ( 2,410 )

( 326 ) ( 2,400 )

Dividends paid on common stock ( 3,454 ) ( 3,420 )

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The following table provides a reconciliation of cash, cash equivalents and restricted cash (1) to the amounts reported on our condensed consolidated balance sheets:

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Cash and cash equivalents $ 1,287 $ 3,127

2 unchanged sentences

Cash, cash equivalents and restricted cash $ 1,311 $ 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 .

(1) 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 March 31, 2025, our wholly owned subsidiaries included Philip Morris USA Inc.

At June 30, 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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and NJOY, LLC (“NJOY”), which is engaged in the manufacture and sale of e-vapor products.

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.

At June 30, 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 June 30, 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 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.

At June 30, 2025, Horizon had no products in the U.S.

At June 30, 2025, we had investments in Anheuser-Busch InBev SA/NV (“ABI”) and Cronos Group Inc.

For further discussion of our investments, see Note 6.

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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.

At June 30, 2025, we had $ 400 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.

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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.

In the second quarter of 2024, we received approximately 7.4 million additional shares of our common stock upon the final settlement of the ASR Agreements.

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

4 unchanged sentences

Our share repurchase activity was as follows:

For the Three Months Ended March 31,

For the Six Months Ended June 30, For the Three Months Ended June 30,

(in millions, except per share data) 2025

1 unchanged sentence

Aggregate cost of shares repurchased $ 600 $ 2,410 $ 274 370

$ 326 $ 2,040

Average price per share of shares repurchased $ 57.71 $ 44.50 $ 58.63 $ 48.36

(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.

(1) Includes 53.9 million and 7.4 million shares repurchased under the ASR Agreements at an average price per share of $ 44.50 and $ 48.44 for the six and three months ended June 30, 2024, respectively.

▪ Basis of Presentation:

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

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

(in millions) June 30, 2025 December 31, 2024

Receivables $ 241 $ 177

Deferred revenue 213 215

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;

At June 30, 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.

2 unchanged sentences

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.

At June 30, 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.

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

At June 30, 2025 and December 31, 2024, confirmed outstanding obligations under the Program were $ 152 million and $ 128 million, respectively.

Goodwill and Other Intangible Assets, net

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

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

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

5 unchanged sentences

Other intangible assets consisted of the following:

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

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

4 unchanged sentences

Total other intangible assets $ 13,711 $ 811 $ 13,710 $ 737

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.

At June 30, 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 during the three months ended March 31, 2025 and 2024 was $ 37 million and $ 27 million, respectively.

Pre-tax amortization expense for definite-lived intangible assets was $ 74 million and $ 64 million for the six months ended June 30, 2025 and 2024, respectively, and $ 37 million for the three months ended June 30, 2025 and 2024.

In April 2024, we assigned the exclusive U.S.

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

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 six and three months ended June 30, 2024 in our condensed consolidated statements of earnings.

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

For the Three Months Ended For the Year Ended

March 31, 2025 December 31, 2024

For the Six Months Ended For the Year Ended

June 30, 2025 December 31, 2024

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

8 unchanged sentences

Balance at end of period $ 6,072 $ 12,900 $ 6,945 $ 12,973

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

(1) The 2024 amounts represent the measurement period adjustments related to the acquisition of NJOY.

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

1 unchanged sentence

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.

There have been no events or changes in circumstances that indicate an interim quantitative impairment assessment was required for the three months ended June 30, 2025.

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

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 June 30, 2025, accumulated impairment losses related to goodwill were $ 873 million, which related to the e-vapor reporting unit goodwill impairment recorded for the three months ended March 31, 2025 in the all other category, discussed below.

At December 31, 2024, there were no accumulated impairment losses related to goodwill.

First Quarter of 2025 E-vapor Reporting Unit Goodwill Impairment

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

1 unchanged sentence

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.

In January 2025, the U.S.

International Trade Commission (“ITC”) issued an exclusion order and cease-and-desist orders prohibiting the importation and sale of NJOY ACE in the United States, which became effective on March 31, 2025, 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.

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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 .

Second Quarter of 2024 Skoal Trademark Impairment

In connection with the preparation of our condensed consolidated financial statements for the period ended June 30, 2024, we determined the estimated fair value of our Skoal trademark was below its carrying value and recorded a non-cash, pre-tax impairment of $ 354 million for the six and three months ended June 30, 2024 in our condensed consolidated statements of earnings.

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

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.

Pre-tax implementation and exit costs consisted of the following:

For the Six Months Ended June 30, 2025 For the Three Months Ended June 30, 2025

(in millions) Exit Costs Implementation Costs (1)

Exit Costs Implementation Costs (1)

Smokeable products segment $ 1 $ 25 $ 1 $ 12

Oral tobacco products segment — 4 — 2

Total $ 1 $ 29 $ 1 $ 14

(1) Recorded in marketing, administration and research costs in our condensed consolidated statement of earnings.

There were no exit or implementation costs for the six months ended June 30, 2024.

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

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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.

We estimate total pre-tax charges for the Initiative’s currently planned phases to be approximately $ 125 million.

As of June 30, 2025, total pre-tax charges since the inception of the Initiative were $ 98 million, consisting of employee separation cost of $ 36 million and implementation costs of $ 62 million.

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.

1 unchanged sentence

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:

As of June 30, 2025, total cash payments since the inception of the Initiative were $ 49 million, consisting of $ 5 million for exit costs and $ 44 million for implementation costs.

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

(in millions) Exit Costs Implementation Costs Total

5 unchanged sentences

Cash paid ( 5 ) ( 33 ) ( 38 )

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

Balances at June 30, 2025 $ 31 (1) $ 18 $ 49

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

1 unchanged sentence

The carrying amount of our investments consisted of the following:

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

(in millions) June 30, 2025 December 31, 2024

ABI $ 7,837 $ 7,880

Cronos 306 315

$ 8,105 $ 8,195

Total $ 8,143 $ 8,195

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

For the Three Months Ended March 31,

For the Six Months Ended June 30, For the Three Months Ended June 30,

(in millions) 2025 2024 2025 2024

$ ( 273 ) $ ( 434 ) (2) $ ( 148 ) $ ( 121 )

( 18 ) 20 — 2

(Income) losses from investments in equity securities $ ( 291 ) $ ( 414 ) $ ( 148 ) $ ( 119 )

2 unchanged sentences

Investment in 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.

At June 30, 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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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 June 30, 2025, the fair value of our investment in ABI was $ 10.9 billion, which exceeded its carrying value of $ 7.8 billion by approximately 39 %.

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

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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 Three Months Ended March 31, 2024

(in millions) For the Six Months Ended June 30, 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 three months ended March 31, 2024.

For further discussion, see Note 13.

1 unchanged sentence

Investment in Cronos

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.

At June 30, 2025, we had an approximate 40.8 % ownership interest in Cronos, consisting of approximately 157 million shares, which we account for under the equity method of accounting.

We report our share of Cronos’s results using a one-quarter lag because Cronos’s results are not available in time for us to record them in the concurrent period.

The fair value of our investment in Cronos is based on unadjusted quoted prices in active markets for Cronos’s common shares and is classified in Level 1 of the fair value hierarchy.

At March 31, 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 June 30, 2025, the fair value of our investment in Cronos was less than its carrying value by approximately $ 6 million or approximately 2 %.

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.

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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.

At June 30, 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) March 31, 2025 December 31, 2024

(in millions) June 30, 2025 December 31, 2024

Carrying value $ 24,720 $ 24,926

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

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.

We recognized pre-tax (gains) losses of our net investment hedges of $ 403 million and $( 98 ) million for the six months ended June 30, 2025 and 2024, respectively, and $ 264 million and $( 23 ) million for the three months ended June 30, 2025 and 2024, respectively.

In addition, as a result of the ABI Transaction, for the six months ended June 30, 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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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.

The changes in the liability associated with contingent payments were as follows:

For the Six Months Ended June 30, 2025 For the Year Ended December 31, 2024

(in millions)

Balance at January 1 $ 20 $ 130

Change in the fair value of contingent payments (1)

25 (2) 140 (3)

Payments — ( 250 ) (4)

Balance at end of period $ 45 $ 20

(1) Pre-tax charges were recorded in marketing, administration and research costs in our condensed consolidated statements of earnings.

(2) Recorded in the first quarter of 2025 and relates to blueberry and watermelon pod products.

(3) Recorded in the second quarter of 2024 and relates to menthol pod products.

(4) Payments made during the third quarter of 2024 following FDA authorization of NJOY’s menthol products.

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

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

Pension Postretirement

For the Three Months Ended March 31,

Pension Postretirement Pension Postretirement

For the Six Months Ended June 30, For the Three Months Ended June 30,

(in millions) 2025 2024 2025 2024 2025 2024 2025 2024

6 unchanged sentences

Prior service cost (credit)

2 3 ( 20 ) ( 20 ) 1 2 ( 10 ) ( 10 )

Net periodic benefit cost (income) $ ( 11 ) $ ( 35 ) $ 6 $ 15 $ ( 6 ) $ ( 16 ) $ 3 $ 7

1 unchanged sentence

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 regulations.

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.

We made employer contributions of $ 9 million to our pension plans and did no t make any contributions to our postretirement plans during the six months ended June 30, 2025.

Currently, we anticipate making additional employer contributions of up to approximately $ 20 million to our pension plans and contributions of up to approximately $ 30 million to our postretirement plans in 2025.

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

For the Three Months Ended March 31,

For the Six Months Ended June 30, For the Three Months Ended June 30,

(in millions) 2025 2024 2025 2024

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Changes in each component of accumulated other comprehensive losses, net of deferred income taxes, attributable to Altria were as follows:

For the Three Months Ended March 31, 2025

(in millions) Benefit Plans ABI Currency

Adjustments and Other Accumulated

For the Six Months Ended June 30, 2025

(in millions) Benefit Plans ABI Currency Translation Adjustments Accumulated

Comprehensive

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( 20 ) ( 431 )

Balances, June 30, 2025 $ ( 1,389 ) $ ( 1,432 ) $ ( 10 ) $ ( 2,831 )

For the Three Months Ended June 30, 2025

(in millions) Benefit Plans ABI Currency Translation Adjustments Accumulated

Comprehensive

Balances, March 31, 2025

For the Three Months Ended March 31, 2024

(in millions) Benefit Plans ABI Currency

Adjustments and Other Accumulated

$ ( 1,391 ) $ ( 1,287 ) $ ( 13 ) $ ( 2,691 )

Other comprehensive earnings (losses) before reclassifications

( 179 ) 3 ( 176 )

Deferred income taxes — 45 — 45

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

— ( 134 ) 3 ( 131 )

Amounts reclassified to net earnings 2 ( 14 ) — ( 12 )

Deferred income taxes — 3 — 3

Amounts reclassified to net earnings, net of deferred income taxes 2 ( 11 ) — ( 9 )

Other comprehensive earnings (losses), net of deferred income taxes 2 ( 145 ) (1)

Balances, June 30, 2025 $ ( 1,389 ) $ ( 1,432 ) $ ( 10 ) $ ( 2,831 )

For the Six Months Ended June 30, 2024

(in millions) Benefit Plans ABI Currency Translation Adjustments Accumulated

Comprehensive

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Other comprehensive earnings (losses) before reclassifications

— 243 ( 2 ) 241

Deferred income taxes — ( 54 ) — ( 54 )

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

— 189 ( 2 ) 187

Amounts reclassified to net earnings ( 3 ) 257 — 254

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Other comprehensive earnings (losses), net of deferred income taxes ( 2 ) 394 (1)

Balances, June 30, 2024 $ ( 1,495 ) $ ( 801 ) $ 13 $ ( 2,283 )

For the Three Months Ended June 30, 2024

(in millions) Benefit Plans ABI Currency Translation Adjustments Accumulated

Comprehensive

Balances, March 31, 2024

$ ( 1,494 ) $ ( 793 ) $ 21 $ ( 2,266 )

Other comprehensive earnings (losses) before reclassifications

— ( 11 ) ( 8 ) ( 19 )

Deferred income taxes — 1 — 1

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

— ( 10 ) ( 8 ) ( 18 )

Amounts reclassified to net earnings ( 1 ) 2 — 1

Deferred income taxes — — — —

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

Other comprehensive earnings (losses), net of deferred income taxes ( 1 ) ( 8 ) (1)

Balances, June 30, 2024 $ ( 1,495 ) $ ( 801 ) $ 13 $ ( 2,283 )

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

For the Three Months Ended March 31,

For the Six Months Ended June 30, For the Three Months Ended June 30,

(in millions) 2025 2024 2025 2024

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Prior service credit ( 18 ) ( 17 ) ( 9 ) ( 8 )

4 ( 3 ) 2 ( 1 )

( 28 ) 257 ( 14 ) 2

Pre-tax amounts reclassified from accumulated other comprehensive losses to net earnings $ ( 24 ) $ 254 $ ( 12 ) $ 1

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

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 the six months ended June 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 further information, see Note 6.

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Segment Reporting

At March 31, 2025, our reportable segments were (i) smokeable products, consisting of combustible cigarettes and machine-made large cigars;

At June 30, 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.

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Segment data were as follows:

For the Three Months Ended March 31,

For the Six Months Ended June 30, For the Three Months Ended June 30,

(in millions) 2025 2024 2025 2024

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(Income) losses from investments in equity securities ( 291 ) ( 414 ) ( 148 ) ( 119 )

Gain on the sale of IQOS System commercialization rights

— ( 2,700 ) — ( 2,700 )

Earnings before income taxes $ 4,801 $ 7,855 $ 3,118 $ 5,116

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,

For the Six Months Ended June 30, For the Three Months Ended June 30,

(in millions) 2025 2024 2025 2024

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Contingencies .

(2) Other segment items includes manufacturing, marketing, administration and research costs, FDA user fees and other costs.

(2) Other segment items includes manufacturing, marketing, administration and research costs and FDA user fees.

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.

Other segment items for our oral tobacco products segment include manufacturing, asset impairment, marketing, administration and research costs and excise taxes on products sold.

Total oral tobacco products other segment items were $ 476 million and $ 830 million for the six months ended June 30, 2025 and 2024, respectively, and $ 255 million and $ 614 million for the three months ended June 30, 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,

For the Six Months Ended June 30, For the Three Months Ended June 30,

(in millions) 2025 2024 2025 2024

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

▪ Asset Impairment, Exit and Implementation Costs:

We recorded exit and implementation costs of $ 30 million and $ 15 million related to the Initiative for the six and three months ended June 30, 2025, respectively.

For a breakdown of these costs by segment, see Note 5.

Exit and Implementation Costs .

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

For further discussion, see Note 4.

Goodwill and Other Intangible Assets, net.

▪ Tobacco and Health and Certain Other Litigation Items:

We recorded pre-tax charges related to tobacco and health and certain other litigation items as follows:

For the Three Months Ended March 31,

For the Six Months Ended June 30, For the Three Months Ended June 30,

(in millions) 2025 2024 2025 2024

Smokeable products segment

$ 40 $ 38 $ 4 $ 20

General corporate expenses 1 30 1 24

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Short-term Borrowings and Borrowing Arrangements

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.

At June 30, 2025 and December 31, 2024, we had no short-term borrowings.

At June 30, 2025, we had availability under our senior unsecured 5-year revolving credit agreement (“Credit Agreement”) for borrowings of up to an aggregate principal amount of $ 3.0 billion.

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

At March 31, 2025, we had availability under our Credit Agreement for borrowings of up to an aggregate principal amount of $ 3.0 billion.

In July 2025, we entered into an extension agreement (“Extension”) to extend the expiration of the Credit Agreement from October 24, 2028 to October 24, 2029.

All other terms and conditions remain in full force and effect.

The Credit Agreement, after entering into the Extension, includes an option, subject to certain conditions, for us to extend the term for an additional one-year period.

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.

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(“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.

The applicable percentage for borrowings under our Credit Agreement at June 30, 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 for the four most recent fiscal quarters.

At March 31, 2025, we were in compliance with our covenants in our Credit Agreement.

At June 30, 2025, we were in compliance with our covenants in our Credit

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 March 31, 2025 and December 31, 2024 was $ 26.1 billion and $ 24.9 billion, respectively.

In February 2025, we issued U.S.

The aggregate carrying value of our total long-term debt at June 30, 2025 and December 31, 2024 was $ 24.7 billion and $ 24.9 billion, respectively.

In May 2025 and June 2025, we repaid in full at maturity our 2.350 % and 1.700 % senior unsecured notes in the aggregate principal amounts of $ 750 million and $ 857 million (€ 750 million), respectively.

In the first quarter of 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 net proceeds from the notes were used for general corporate purposes, which included repayment of certain of our notes in the second quarter of 2025 as discussed above.

The notes contain the following terms:

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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.

At June 30, 2025 and December 31, 2024, accrued interest on long-term debt of $ 369 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 Three Months Ended March 31,

For the Six Months Ended June 30, For the Three Months Ended June 30,

(in millions) 2025 2024 2025 2024

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Income tax rate 28.0 % 24.5 % 23.7 % 25.7 %

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

Our income tax rate for the six months ended June 30, 2025 differed 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.

Our income tax rate for the three months ended June 30, 2025 differed from the U.S.

federal statutory rate of 21%, due primarily to 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.

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 losses related to our former investment in JUUL Labs, Inc.

Our income tax rate for the six months ended June 30, 2024 differed from the U.S.

federal statutory rate of 21%, due primarily to state tax expense and the change in the fair value of the contingent payments related to the NJOY Transaction, which is treated as an outside basis difference that we do not expect to reverse in the foreseeable future, partially offset by an income tax benefit from the partial release of a valuation allowance recorded against a deferred tax asset associated with our losses related to our former investment in JUUL Labs, Inc.

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

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

Investments in Equity Securities.

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

For further discussion of the ABI Transaction and contingent payments related to the NJOY Transaction, see Note 6.

Investments in Equity Securities and Note 7.

Financial Instruments , respectively.

The One Big Beautiful Bill Act (“OBBB”) was signed into law on July 4, 2025.

The OBBB includes various tax law changes, including the restoration of favorable tax treatment for certain business-related provisions and modifications to the international tax law framework.

The OBBB has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027.

We do not expect these provisions and modifications to have a material impact on our consolidated financial statements.

Contingencies

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The changes in our accrued liability for tobacco and health and certain other litigation items, including related interest costs, for the periods specified below are as follows:

For the Three Months Ended March 31,

For the Six Months Ended June 30, For the Three Months Ended June 30,

(in millions) 2025 2024 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 $ 246 million as of March 31, 2025.

Since October 2004, PM USA has paid judgments and settlements (including related costs and fees) totaling approximately $ 1.1 billion and interest totaling approximately $ 246 million as of June 30, 2025.

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 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.

As of June 30, 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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The table below lists the number of certain tobacco-related cases pending in the United States against us as of:

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

July 28, 2025 July 29, 2024 July 27, 2023

Individual Smoking and Health Cases (1)

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Other Tobacco-Related Cases (4)

(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.

(1) Includes as of July 28, 2025, 30 cases filed in Illinois, 16 cases filed in New Mexico, 90 cases filed in Massachusetts, 14 cases filed in Oregon, six cases filed in Hawaii and 15 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 14 Broin cases pending as of April 24, 2025.

Also does not include three Broin cases pending as of July 28, 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 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.

Pending final dismissal of these cases, as of July 28, 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.

(4) Includes as of July28, 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 April 24, 2025, (i) Altria is named as a defendant in three e-vapor class action lawsuits in Canada;

As of July 28, 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 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.

As of July 28, 2025, one Engle progeny case, one individual smoking and health case and no e-vapor cases are set for trial through September 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, 28 have reached final resolution.

See Smoking and Health Liti gation - Engle Progeny Trial Results below for a discussion of verdicts in state and federal Engle progeny cases involving PM USA as of April 24, 2025.

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 July 28, 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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The jury found that plaintiff was not entitled to punitive damages.

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

Plaintiff has

appealed the judgment, and the appeal remains pending.

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.

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In October 2023, the court entered judgment against PM USA for $ 11 million, having reduced the compensatory damages award to $ 3 million based on the jury’s finding on comparative fault and a set-off against plaintiff’s settlements with other defendants.

We filed post-trial motions challenging the verdict, which were denied in March 2024.

In April 2024, we filed a notice of appeal and a motion to stay execution pending appeal, and the court has stayed execution of the final judgment pending resolution of PM USA’s appeal rights.

PM USA filed post-trial motions challenging the verdict, which were denied in March 2024.

In April 2024, PM USA filed a notice of appeal and a motion to stay execution pending appeal, and the court has stayed execution of the final judgment pending resolution of PM USA’s appeal rights.

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

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In December 2023, the court entered a final judgment awarding plaintiff $ 8 million in compensatory damages, $ 56 million in punitive damages and prejudgment interest.

PM USA has noticed an appeal to the Appeals Court of Massachusetts, and the appeal remains pending.

PM USA has noticed an appeal to the Appeals Court of Massachusetts.

In May 2025, the Massachusetts Supreme Judicial Court took jurisdiction over the appeal, and the appeal remains pending.

Federal Government’s Lawsuit :

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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 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.

As of July 28, 2025, approximately 81 state court cases were pending against PM USA or Altria asserting individual claims by or on behalf of approximately 97 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 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-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.

As of July 28, 2025, 147 federal and state Engle progeny cases involving PM USA have resulted in verdicts.

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

Fifty-nine verdicts were returned in favor of PM USA, one of which 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 July 28, 2025.

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

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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.

Initial verdicts have

been reversed in whole or in part on appeal or following retrial.

Juries have returned verdicts in favor of or against PM USA awarding no damages.

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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 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.

The first chart lists cases that are pending as of July 28, 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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Appeal to the Fourth District Court of Appeal pending.

Kaplan ( McLaughlin )

July 2018 PM USA and R.J.

Reynolds Broward $ 2 million

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

Cooper ( Blackwood )

September 2015 PM USA Broward <$ 1 million

Retrial of punitive damages claim pending.

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

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Reynolds Miami-Dade $ 4 million

Hoffman January 2023 PM USA Miami-Dade $ 3 million

Levine September 2022 PM USA and R.J.

Reynolds Miami-Dade $ 1 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 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.

As of July 28, 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.

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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 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”).

As of July 28, 2025, PM USA is named as a defendant in three 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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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.

For the six months ended June 30, 2025 and 2024, the aggregate amount recorded in cost of sales with respect to the State Settlement Agreements was approximately $ 1.5 billion and $ 1.8 billion, respectively.

These amounts include PM USA’s estimate of amounts related to NPM Adjustments discussed below.

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The arbitration panel found three of the remaining eight states that have not settled the NPM Adjustment disputes, Washington, Missouri and New Mexico, were not diligent in the enforcement of their escrow statutes in 2004, and PM USA received approximately $ 52 million on account of the 2004 NPM Adjustment as a credit against its April 2023 MSA payment.

PM USA recorded $ 44 million and $ 8 million in third quarter of 2021 and fourth quarter of 2022, respectively.

Washington, Missouri and New Mexico have challenged those determinations in their respective state courts, and several issues remain to be resolved by the state trial and appellate courts that may affect the final amount of the 2004 NPM adjustment PM USA and other PMs will receive.

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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 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 .

As of July 28, 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.

PM USA recorded $ 35 million in the fourth quarter of 2023 for its estimate of the minimum amount of the 2005 through 2007 NPM Adjustment it will receive.

▪ Subsequent Years.

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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.

PM USA has appealed, and the appeal remains pending.

In July 2024, the State of Minnesota filed a motion in Minnesota state court seeking to enforce the Minnesota State Settlement Agreement against PM USA, R.J.

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The court found in favor of the State of Minnesota.

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

As of July 28, 2025, the court had not made a determination on damages.

PM USA intends to appeal.

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The case ultimately proceeded only under the civil provisions of RICO.

In August 2006, the district court held that certain defendants, including Altria and PM USA, violated RICO and engaged in certain “sub-schemes” to defraud that the government had alleged.

In August 2006, the district court held

that certain defendants, including Altria and PM USA, violated RICO and engaged in certain “sub-schemes” to defraud that the government had alleged.

The court did not impose monetary penalties on defendants, but ordered various types of non-monetary relief, including an injunction against conveying any express or implied health message or health descriptors on cigarette packaging or in cigarette advertising or promotional material, including “lights,” “ultra lights” and “low tar,” which the court found could cause consumers to believe one cigarette brand is less hazardous than another brand, and the issuance of “corrective statements” in various media regarding the adverse health effects of smoking, the addictiveness of smoking and nicotine, the lack of any significant health benefit from smoking “low tar” or “light” cigarettes, defendants’ manipulation of cigarette design to ensure optimum nicotine delivery and the adverse health effects of exposure to ETS.

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Corrective statements have appeared on websites since the second quarter of 2018.

In December 2022, the district court entered a consent order approving a settlement with respect to corrective statements on point-of-sale signage.

In December 2022, the district court entered a consent order approving a settlement with respect to corrective statements on point-of-sale signage, which appeared through June 2025.

In addition to the $ 28 million of provisions recorded in 2022, we recorded in the first quarter of 2024 provisions of $ 15 million for estimated costs of implementing the corrective statements on point-of-sale signage remedy.

In May 2024, we entered into an agreement with the U.S.

government resolving its concerns regarding our assignment of the exclusive U.S.

commercialization rights to the IQOS System to PMI and whether the court-ordered injunction that applies to cigarettes discussed above also applies to HeatSticks, a heated tobacco product used with the IQOS System.

Under the agreement, PM USA agreed to obtain district court approval for any future similar transaction and to post additional point-of-sale signage containing the corrective statements referenced above.

The cost of implementing the additional point-of-sale signage did not require an increase to the previously recorded provisions for point-of-sale signage discussed above.

Pursuant to the settlement, PM USA voluntarily dismissed its appeal of the district court’s ruling that HeatSticks are subject to the court’s injunction.

E-vapor Product Litigation

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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.

In May 2023, we reached agreement on terms to resolve the majority of the Multidistrict Litigation lawsuits as well as the majority of the group of cases pending in a consolidated California state court proceeding for $ 235 million, for which amount we recorded a pre-tax provision in the second quarter of 2023.

In May 2023, we reached agreement on terms to resolve the majority of the Multidistrict Litigation lawsuits as well as the majority of the group of cases pending in the consolidated California state court proceeding for $ 235 million, for which amount we recorded a pre-tax provision in the second quarter of 2023.

In March 2024, the court granted final approval of the class action settlement, and we paid the settlement amount in the second quarter of 2024.

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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.

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

Neither settlement applies to three class action lawsuits pending in Canada or 17 putative class action antitrust lawsuits.

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

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.

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.

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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 U.S.

In June 2023, JUUL and VMR Products LLC (“VMR”) filed a lawsuit against Altria and our affiliates AGDC, ALCS, NJOY Holdings, Inc.

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.

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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 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.

The final exclusion order and cease-and-desist orders prohibiting the importation and sale of NJOY ACE will remain in effect 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.

We have appealed the final exclusion order and cease-and-desist orders to the U.S.

Court of Appeals for the Federal Circuit.

In November and December 2023 and February 2024, Altria and our affiliates filed petitions with the U.S.

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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.

In June 2025, the PTAB issued its decision concluding that the patent it reviewed was valid.

Appeals may be filed with the U.S.

Court of Appeals for the Federal Circuit.

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The lawsuit is currently stayed.

However, as discussed below, we have moved to lift the stay.

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.

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.

In December 2024, the ALJ issued an initial determination concluding that, while the patents NJOY asserted against JUUL are valid, JUUL products do not infringe the patents.

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

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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.

In May 2025, we appealed the ITC’s final determination to the U.S.

Court of Appeals for the Federal Circuit.

Subsequently, in July 2025, we voluntarily dismissed the appeal and moved to lift the stay on NJOY’s lawsuit against JUUL in the U.S.

District Court for the District of Delaware (discussed above).

In November 2023, JUUL filed petitions with the PTAB challenging the validity of the patents underlying NJOY’s patent infringement claims.

In May 2024, the PTAB agreed to review JUUL’s challenge to both of the NJOY patents asserted against JUUL.

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.

In May 2025, the PTAB issued its decision concluding that the patents it reviewed were valid.

The deadline to appeal the PTAB’s decision has passed, and JUUL did not appeal.

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

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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.

District Courts, the PTAB and the U.S.

Court of Appeals for the Federal Circuit, 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 obtained a sub-license to the asserted patents from JUUL in December 2023.

In December 2024, the district court denied the motion as to the damages award and royalties due through December 2023.

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.

Reynolds obtained the sub-license.

The district court has set an evidentiary hearing for February 2026.

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 condensed consolidated financial statements.

Antitrust Litigation

In March 2023, we entered into a stock transfer agreement with JUUL pursuant to which, among other things, we transferred to JUUL all of our beneficially owned JUUL equity securities.

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

As of July 28, 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 February 2024, the court ordered that certain of the direct-purchaser plaintiffs’ claims against JUUL be sent to arbitration pursuant to an arbitration provision in JUUL’s online purchase agreement and dismissed without prejudice the direct-purchaser plaintiffs’ claims for injunctive relief.

The trial with respect to the consolidated lawsuits is set to commence in May 2026.

In April 2025, plaintiffs voluntarily dismissed all monopolization claims and all claims against the Altria defendants under California’s Unfair Competition Law.

The trial with respect to the remaining claims in the consolidated lawsuits is set to commence in May 2026.

Federal and State Shareholder Derivative Lawsuits

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

As of July 28, 2025, two “Lights/Ultra Lights” class actions are pending in U.S.

state courts.

Neither case is active.

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.

As of July 28, 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 April 24, 2025, there is no such case pending against UST and/or its tobacco subsidiaries.

As of July 28, 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 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.

At June 30, 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 March 31, 2025 as the fair value of this indemnification is insignificant.

We do not have a related liability recorded on our condensed consolidated balance sheet at June 30, 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 .

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

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

The guidance will result in expanded disclosures beginning in our annual consolidated financial statements for the year ending December 31, 2025, which we plan to adopt retrospectively.

2024-03 and 2025-01 Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):

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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