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Item 1. Financial Statements

2026-04-30 compared with 2025-10-30 · 304 added, 613 removed, 706 unchanged (57% of the section changed)

5 unchanged sentences

______________________________

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Cash and cash equivalents $ 3,531 $ 4,474

19 unchanged sentences

________________________________________________

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Current portion of long-term debt $ 542 $ 1,569

19 unchanged sentences

Accumulated other comprehensive losses ( 2,450 ) ( 2,627 )

Cost of repurchased stock ( 1,126,809,622 shares at September 30, 2025 and 1,115,309,450 shares at December 31, 2024)

Cost of repurchased stock ( 1,135,384,913 shares at March 31, 2026 and 1,131,643,020 shares at December 31, 2025)

( 43,449 ) ( 43,183 )

9 unchanged sentences

_____________________________________

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

2025 2024 2025 2024

For the Three Months Ended March 31, 2026 2025

Net revenues $ 5,428 $ 5,259

3 unchanged sentences

Marketing, administration and research costs 550 588

Asset impairment and exit costs 3 354 2 —

Impairment of goodwill — 873

3 unchanged sentences

(Income) losses from investments in equity securities ( 158 ) ( 143 )

Gain on the sale of IQOS System commercialization rights

— ( 2,700 ) — —

Earnings before income taxes 2,859 1,683

9 unchanged sentences

_____________________

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

2025 2024 2025 2024

For the Three Months Ended March 31, 2026 2025

Net earnings $ 2,183 $ 1,077

9 unchanged sentences

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

for the Nine Months Ended September 30, 2025 and 2024

for the Three Months Ended March 31, 2026 and 2025

(in millions of dollars, except per share data)

6 unchanged sentences

Losses Cost of

Interest Total

Stockholders’

9 unchanged sentences

Other — — — — ( 2 ) — ( 2 )

Balances, September 30, 2025

Balances, March 31, 2026

$ 935 $ 5,894 $ 35,859 $ ( 2,450 ) $ ( 43,449 ) $ 50 $ ( 3,161 )

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Other — — — — ( 3 ) — ( 3 )

Balances, September 30, 2024

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

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, 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, June 30, 2025

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

Net earnings — — 2,375 — — — 2,375

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

— — — 122 — — 122

Stock award activity

— 11 — — — — 11

Cash dividends declared ($ 1.06 per share)

— — ( 1,785 ) — — — ( 1,785 )

Repurchases of common stock — — — — ( 112 ) — ( 112 )

Other — — — — ( 1 ) — ( 1 )

Balances, September 30, 2025

$ 935 $ 5,906 $ 36,115 $ ( 2,709 ) $ ( 42,893 ) $ 50 $ ( 2,596 )

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 — — — — ( 7 ) — ( 7 )

Balances, September 30, 2024

Balances, March 31, 2025

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

(1) Represents the non-cash contribution made by JTIUH to Horizon.

Background and Basis of Presentation .

See notes to condensed consolidated financial statements.

4 unchanged sentences

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For the Nine Months Ended September 30, 2025 2024

For the Three Months Ended March 31, 2026 2025

Cash Provided by (Used in) Operating Activities

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Deferred income tax provision 46 26

Unrecognized tax benefit (1)

Fair value adjustment for NJOY Transaction contingent payments — 25

(Income) losses from investments in equity securities ( 158 ) ( 143 )

Gain on the sale of IQOS System commercialization rights

Dividends from ABI 181 139

Asset impairment and exit costs, net of cash paid ( 9 ) 354

Exit costs, net of cash paid ( 5 ) ( 1 )

Impairment of goodwill — 873

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Capital expenditures ( 93 ) ( 38 )

Proceeds from the ABI Transaction (2)

Other, net ( 16 ) ( 5 )

Net cash provided by (used in) investing activities ( 109 ) ( 43 )

(1) 2025 relates to unrecognized tax benefits from the change in the application of foreign attribution rules relevant to our investment in ABI.

Income Taxes .

(2) See Note 6.

Investments in Equity Securities .

See notes to condensed consolidated financial statements.

Altria Group, Inc.

and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Continued)

(in millions of dollars)

_____________________

For the Nine Months Ended September 30, 2025 2024

Cash Provided by (Used in) Financing Activities

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Balance at end of period $ 3,550 $ 4,750

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

September 30, 2025 December 31, 2024

Cash and cash equivalents $ 3,472 $ 3,127

Restricted cash included in other current assets 9 8

Restricted cash included in other assets 15 23

Cash, cash equivalents and restricted cash $ 3,496 $ 3,158

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

Contingencies .

(1) For a reconciliation to our condensed consolidated balance sheets, see Note 13.

Additional Financial Statement Information - Cash, Cash Equivalents and Restricted Cash .

See notes to condensed consolidated financial statements.

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▪ Background:

At September 30, 2025, our wholly owned subsidiaries included Philip Morris USA Inc.

At March 31, 2026, our wholly owned subsidiaries included Philip Morris USA Inc.

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

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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 September 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 September 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.

At March 31, 2026, our significant subsidiaries were not limited by contractual obligations in their ability to pay cash dividends or make other distributions with respect to their equity interests.

At March 31, 2026, we owned a 75 % economic interest in Horizon Innovations LLC (“Horizon”), a joint venture with JTI (US) Holding, Inc.

(“JTIUH”), a subsidiary of Japan Tobacco Inc., which owned the remaining 25 % economic interest.

Horizon is responsible for the U.S.

marketing and commercialization of heated tobacco stick products owned by either party.

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

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

At March 31, 2026, Horizon had no products in the U.S.

At March 31, 2026, we had investments in Anheuser-Busch InBev SA/NV (“ABI”) and Cronos Group Inc.

For further discussion of our investments, see Note 4.

Investments in Equity Securities .

▪ Dividends and Share Repurchases:

In August 2025, our Board of Directors (“Board of Directors” or “Board”) approved a 3.9 % increase in the quarterly dividend rate to $ 1.06 per share of our common stock versus the previous rate of $ 1.02 per share.

The current annualized dividend rate is $ 4.24 per share.

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

In January 2025, our Board authorized a new $ 1.0 billion share repurchase program, of which $ 288 million was remaining at September 30, 2025.

In October 2025, the Board authorized a $ 1.0 billion expansion of this program to $ 2.0 billion, which now expires on December 31, 2026.

Share repurchases depend on marketplace conditions and other factors, and the program remains subject to the discretion of our Board.

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 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 our sale of a portion of our investment in ABI in the first quarter of 2024 (“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,

(in millions, except per share data) 2025

Total number of shares repurchased 12.3 67.6 1.9 13.5

Aggregate cost of shares repurchased $ 712 $ 3,090 $ 112 680

Average price per share of shares repurchased $ 58.08 $ 45.68 $ 60.13 $ 50.37

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

▪ Basis of Presentation:

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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 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.

On January 1, 2026, we adopted Accounting Standards Update (“ASU”) 2025-05, Financial Instruments-Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU No.

This guidance provides a practical expedient for the calculation of current expected credit losses on current accounts receivable and current contract assets that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset.

We elected to apply this practical expedient upon adoption of ASU No.

2025-05, which had no impact on our condensed consolidated financial statements for the period ended March 31, 2026.

For a description of issued accounting guidance applicable to, but not yet adopted by, us, see Note 14.

New Accounting Guidance Not Yet Adopted .

Revenues from Contracts with Customers

We disaggregate net revenues based on product type.

For further discussion, see Note 11.

Segment Reporting .

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 any cash discounts on our condensed consolidated balance sheets.

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

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

Receivables $ 249 $ 177

Deferred revenue 167 215

At September 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.

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 typically satisfy their performance obligations within three days of receiving payment.

At September 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.

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.

Actual sales returns will differ from estimated sales returns to the extent actual results differ from estimated assumptions.

We reflect differences between actual and estimated sales returns in the period in which the actual amounts become known.

These differences, if any, have not had a material impact on our condensed consolidated financial statements.

All returned goods are destroyed upon return and not included in inventory.

Consequently, we do not record an asset for USSTC’s right to recover goods from customers upon return.

Sales incentives include variable payments related to goods sold by our businesses.

We include estimates of variable consideration as a reduction to revenues upon shipment of goods to customers.

The sales incentives that require significant estimates and judgments are as follows:

▪ Price promotion payments- We make price promotion payments, substantially all of which are made to our retail partners to incent the promotion of certain product offerings in select geographic areas.

▪ Wholesale and retail participation payments- We make payments to our wholesale and retail partners to incent merchandising and sharing of sales data in accordance with our trade agreements.

These estimates primarily include estimated wholesale to retail sales volume and historical acceptance rates.

Actual payments will differ from estimated payments to the extent actual results differ from estimated assumptions.

Differences between actual and estimated payments are reflected in the period such information becomes available.

These differences, if any, have not had a material impact on our condensed consolidated financial statements.

Supplier Financing

We facilitate a voluntary supplier financing program through a third-party intermediary under which participating suppliers may elect to sell receivables due from us to participating third-party financial institutions at the sole discretion of both the suppliers and the financial institutions (“Program”) .

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, 2025 and December 31, 2024, confirmed outstanding obligations under the Program were $ 160 million and $ 128 million, respectively.

Goodwill and Other Intangible Assets, net

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

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

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

3 unchanged sentences

Total $ 5,787 $ 11,873 $ 5,787 $ 11,876

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

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

Other intangible assets consisted of the following:

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

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

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Total other intangible assets $ 12,765 $ 892 $ 12,745 $ 869

At September 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 was $ 112 million and $ 102 million for the nine months ended September 30, 2025 and 2024, respectively, and $ 38 million for the three months ended September 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 nine months ended September 30, 2024 in our condensed consolidated statements of earnings.

At March 31, 2026, substantially all of our indefinite-lived intangible assets consisted of (i) MST trademarks of $ 8.5 billion, which consists of Copenhagen , Skoal and other MST trademarks of $ 4.0 billion, $ 3.6 billion and $ 0.9 billion, respectively, from our 2009 acquisition of UST, and (ii) cigar trademarks of $ 2.6 billion from our 2007 acquisition of Middleton.

Definite-lived intangible assets, consisting primarily of intellectual property, certain cigarette trademarks and customer relationships, are amortized over a weighted-average period of approximately 19 years.

Pre-tax amortization expense for definite-lived intangible assets was $ 23 million and $ 37 million for the three months ended March 31, 2026 and 2025, respectively.

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

For the Nine Months Ended For the Year Ended

September 30, 2025 December 31, 2024

For the Three Months Ended March 31, 2026 For the Year Ended

December 31, 2025

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

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— — ( 1,158 ) (1)

Impairments (2)

— ( 23 ) — ( 132 )

— ( 112 ) — ( 139 )

Balance at end of period $ 5,787 $ 11,873 $ 5,787 $ 11,876

(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.

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.

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

(1) Comprised of non-cash goodwill impairments of $ 873 million and $ 285 million recorded in the first and fourth quarters of 2025, respectively.

We conduct a required annual review of goodwill and indefinite-lived intangible assets for potential impairment as of October 1 of each year, in accordance with our accounting policy, and more frequently if an event occurs or circumstances change that would require us to perform an interim quantitative impairment assessment.

There have been no events or changes in circumstances that indicate an interim quantitative impairment assessment was required as of March 31, 2026.

Our annual impairment test of goodwill and indefinite-lived intangible assets as of October 1, 2025 resulted in a non-cash, pre-tax impairment of $ 970 million to our e-vapor reporting unit’s definite-lived intangible assets and a non-cash impairment of $ 285 million to our e-vapor reporting unit goodwill which we recorded in our consolidated statement of earnings for the year ended December 31, 2025.

At March 31, 2026 and December 31, 2025, accumulated impairment losses related to goodwill were $ 1,158 million, which related to the e-vapor reporting unit.

First Quarter of 2025 E-vapor Reporting Unit Goodwill Impairment

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

At December 31, 2024, the carrying value of the e-vapor reporting unit goodwill was $ 1,768 million.

The estimated fair value of the e-vapor reporting unit goodwill exceeded its carrying value by approximately 28 % ($ 0.3 billion).

As further discussed in Note 12.

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

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 U.S.

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

As a result, in connection with the preparation of our condensed consolidated financial statements for the period ended March 31, 2025, we concluded a triggering event had occurred and performed an interim impairment assessment 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.

Based on the results of that assessment, we recorded a non-cash goodwill impairment of $ 873 million during the three months ended March 31, 2025.

This impairment was due primarily to (i) lower projected volume and revenue due to NJOY ACE ’s removal from the U.S.

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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.

In performing the discounted cash flow analysis, we made various judgments, estimates and assumptions, the most significant of which were volume, revenue, income, operating margins, perpetual growth rate and discount rate.

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

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.

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 during the second quarter of 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.

Due to the presence of uncertainties, our cash flows were based on a range of scenarios that consider certain potential regulatory and market outcomes, including the projected impact of enforcement on illicit flavored disposable e-vapor products.

In performing the discounted cash flow analyses, we made various judgments, estimates and assumptions, the most significant of which were volume, price, revenue, income, operating margins, scenario weightings, perpetual growth rate and discount rates.

We developed these significant assumptions based on our evaluation of the future state of the e-vapor category, including macroeconomic conditions, governmental actions, and other factors, and based these assumptions on factors specific to NJOY’s business.

The discount rates used in performing the valuation ranged from 12.0 % to 15.0 % at March 31, 2025.

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

Exit and Implementation Costs

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

For the Nine Months Ended September 30, 2025 For the Three Months Ended September 30, 2025

(in millions) Exit Costs Implementation Costs (1)

Exit Costs Implementation Costs (1)

Pre-tax implementation costs consisted of the following:

For the Three Months Ended March 31,

(in millions) 2026 2025

Smokeable products segment $ 5 $ 13

Oral tobacco products segment 1 2

Total $ 3 $ 40 $ 2 $ 11

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

There were no exit or implementation costs for the nine months ended September 30, 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 currently planned phases to be approximately $ 125 million.

As of September 30, 2025, total pre-tax charges since the inception of the Initiative were $ 111 million, consisting of employee separation cost of $ 38 million and implementation costs of $ 73 million.

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

There were no exit costs for the three months ended March 31, 2026 and 2025.

In October 2024, we announced a multi-phase Optimize & Accelerate initiative (“Initiative”) designed to modernize our ways of working and enable us to increase our organization’s speed, efficiency and effectiveness by centralizing work, outsourcing certain transactional tasks and streamlining, automating and standardizing processes.

We estimate total pre-tax charges for the Initiative to be approximately $ 175 million.

As of March 31, 2026, total pre-tax charges since the inception of the Initiative were $ 130 million, consisting of employee separation costs of $ 43 million and implementation costs of $ 87 million.

We expect to record the majority of the remaining charges by the end of 2027.

All of these charges result in cash expenditures and consist of severance payments associated with employee separations, implementation costs for new technology and business advisory services and other costs.

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 September 30, 2025, total cash payments since the inception of the Initiative were $ 74 million, consisting of $ 12 million for exit costs and $ 62 million for implementation costs.

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

We record employee separation costs when probable and reasonably estimable.

As of March 31, 2026, total cash payments since the inception of the Initiative were $ 103 million, consisting of $ 23 million for exit costs and $ 80 million for implementation costs.

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

(in millions) Exit Costs Implementation Costs Total

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Cash paid ( 5 ) ( 8 ) ( 13 )

Balances at September 30, 2025 $ 26 (1) $ 11 $ 37

Balances at March 31, 2026 $ 20 (1) $ 7 $ 27

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

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The carrying amount of our investments consisted of the following:

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

(in millions) March 31, 2026 December 31, 2025

ABI $ 8,627 $ 8,303

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(Income) losses from our investments in equity securities 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) 2026 2025

$ ( 159 ) $ ( 125 )

( 2 ) 25 16 5

(Income) losses from investments in equity securities $ ( 158 ) $ ( 143 )

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

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

Investment in ABI

At September 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.

At March 31, 2026, we had an approximate 8.2 % ownership interest in ABI, consisting of approximately 125 million restricted shares of ABI (“Restricted Shares”) and approximately 34 million ordinary shares of ABI.

Our Restricted Shares:

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Because we can convert our Restricted Shares into ordinary shares at our discretion, the fair value of each Restricted Share is based on the value of an ordinary share.

At September 30, 2025, the fair value of our investment in ABI was $ 9.5 billion, which exceeded its carrying value of $ 8.1 billion by approximately 18 %.

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.

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.

Background and Basis of Presentation .

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

Gain on partial sale of our investment $ 165

Transaction costs ( 62 )

Total pre-tax gain on ABI Transaction $ 103

▪ The pre-tax gain on the partial sale of our investment was recorded in (income) losses from investments in equity securities and includes a $ 408 million gain representing the excess of the selling price of the ABI shares sold over the carrying value of those shares, partially offset by a $ 243 million reclassification of the proportionate share of our pre-tax accumulated other comprehensive losses directly attributable to ABI and our designated net investment hedges related to our investment in ABI (see Note 7.

Financial Instruments and Note 10.

Other Comprehensive Earnings/Losses ).

▪ 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.

Subsequently, in the third quarter of 2025, we recorded a $ 77 million increase to this valuation allowance as discussed further in Note 13.

Income Taxes .

At March 31, 2026, the fair value of our investment in ABI was $ 11.0 billion, which exceeded its carrying value of $ 8.6 billion by approximately 27 %.

At December 31, 2025, the fair value of our investment in ABI was $ 10.3 billion, which exceeded its carrying value of $ 8.3 billion by approximately 24 %.

Investment in Cronos

At September 30, 2025, we had an approximate 40.9 % ownership interest in Cronos, consisting of approximately 157 million shares, which we account for under the equity method of accounting.

At March 31, 2026, we had an approximate 41.6 % ownership interest in Cronos, consisting of approximately 157 million shares, which we account for under the equity method of accounting.

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

T he 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, 2025, the fair value of our investment in Cronos exceeded its carrying value by approximately $ 119 million or approximately 38 %.

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

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

At March 31, 2026, the fair value of our investment in Cronos was $ 396 million, which exceeded its carrying value of $ 320 million by approximately 24 %.

At December 31, 2025, the fair value of our investment in Cronos was $ 411 million, which exceeded its carrying value of $ 314 million by approximately 31 %.

Financial Instruments

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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 September 30, 2025 and December 31, 2024, we had no outstanding foreign currency contracts.

At March 31, 2026 and December 31, 2025, 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, 2025 December 31, 2024

(in millions) March 31, 2026 December 31, 2025

Carrying value $ 24,602 $ 25,709

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Fair value 2,545 2,619

T he fair value of our total long-term debt is based on observable market information derived from a third-party pricing source and is classified in Level 2 of the fair value hierarchy.

The fair value of our total long-term debt is based on observable market information derived from a third-party pricing source and is classified in Level 2 of the fair value hierarchy.

Net Investment Hedging

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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 $ 391 million and $ 29 million for the nine months ended September 30, 2025 and 2024, respectively, and $( 12 ) million and $ 127 million for the three months ended September 30, 2025 and 2024, respectively.

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 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.

Investments in Equity Securities and Note 10.

Other Comprehensive Earnings/Losses.

We recognized pre-tax (gains) losses of our net investment hedges of $( 43 ) million and $ 139 million for the three months ended March 31, 2026 and 2025, respectively.

Contingent Payments

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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.

Food and Drug Administration (“FDA”) authorizations with respect to NJOY ACE menthol ($ 250 million, paid in 2024 following FDA authorization), blueberry ($ 125 million) and watermelon ($ 125 million) pod products.

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

For the Nine Months Ended September 30, 2025 For the Year Ended December 31, 2024

For the Three Months Ended March 31, 2026 For the Year Ended December 31, 2025

(in millions)

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Change in the fair value of contingent payments (1)

25 (2) 140 (3)

Payments — ( 250 ) (4)

Balance at end of period $ 45 $ 45

(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.

Subsequent changes to the fair value of the liability associated with 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.

(1) These pre-tax charges were recorded in the first quarter of 2025 in marketing, administration and research costs in our condensed consolidated statements of earnings and related to NJOY ACE blueberry and watermelon pod products.

We recognized the liability for contingent payments related to the NJOY Transaction at its estimated fair value as of the acquisition date.

We recognize subsequent changes to the fair value in earnings until the contingency is resolved.

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

We classified the liability for contingent payments in Level 3 of the fair value hierarchy.

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) 2026 2025 2026 2025

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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 $ 11 million to our pension plans and did no t make any contributions to our postretirement plans during the nine months ended September 30, 2025.

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 2025.

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 $ 4 million to our pension plans and did no t make any contributions to our postretirement plans during the three months ended March 31, 2026.

Currently, we anticipate making additional employer contributions in 2026 to our pension and postretirement plans of up to approximately $ 56 million and $ 100 million, respectively.

However, the foregoing estimates of 2026 contributions to our pension and postretirement plans are subject to change as a result of changes in tax and other benefit laws, changes in interest rates and asset performance significantly above or below the assumed long-term rate of return for each respective plan.

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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) 2026 2025

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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 Nine Months Ended September 30, 2025

For the Three Months Ended March 31, 2026

(in millions) Benefit Plans ABI Currency Translation Adjustments Accumulated

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Other comprehensive earnings (losses) before reclassifications

— ( 384 ) 4 ( 380 )

Deferred income taxes — ( 44 ) — ( 44 )

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

— ( 293 ) 4 ( 289 )

Amounts reclassified to net earnings 14 3 — 17

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

Balances, September 30, 2025 $ ( 1,388 ) $ ( 1,335 ) $ 14 $ ( 2,709 )

For the Three Months Ended September 30, 2025

(in millions) Benefit Plans ABI Currency Translation Adjustments Accumulated

Comprehensive

Balances, June 30, 2025

$ ( 1,389 ) $ ( 1,432 ) $ ( 10 ) $ ( 2,831 )

Other comprehensive earnings (losses) before reclassifications

Deferred income taxes — ( 27 ) — ( 27 )

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

Amounts reclassified to net earnings 1 ( 3 ) — ( 2 )

Deferred income taxes — 1 — 1

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

Other comprehensive earnings (losses), net of deferred income taxes 1 97 (1)

Balances, September 30, 2025 $ ( 1,388 ) $ ( 1,335 ) $ 14 $ ( 2,709 )

For the Nine Months Ended September 30, 2024

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

For the Three Months Ended March 31, 2025

(in millions) Benefit Plans ABI Currency Translation Adjustments Accumulated

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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 Translation Adjustments 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 )

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

(1) Primarily reflects our share of ABI’s currency translation adjustments and the impact of our designated net investment hedges related to our investment in ABI.

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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) 2026 2025

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Prior service credit ( 9 ) ( 9 )

5 ( 5 ) 1 ( 2 )

( 31 ) 258 ( 3 ) 1

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

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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 further information, see Note 6.

Investments in Equity Securities and Note 7.

Financial Instruments .

Segment Reporting

At September 30, 2025, our reportable segments were (i) smokeable products, consisting of combustible cigarettes and machine-made large cigars;

At March 31, 2026, our reportable segments were (i) smokeable products, consisting of combustible cigarettes and machine-made large cigars;

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

Our all other category included (i) NJOY;

For the year ended December 31, 2025, we concluded that our e-vapor products operating segment met the quantitative threshold for presentation as a reportable segment in accordance with Accounting Standards Codification 280, Segment Reporting (“ASC 280”), as a result of the non-cash impairments of e-vapor reporting unit goodwill and related definite-lived intangible assets recorded in 2025.

Goodwill and Other Intangible Assets, net .

As a result, in our 2025 Form 10-K, we presented e-vapor products as a reportable segment (previously in our all other category) and recast segment information for comparative periods.

As of March 31, 2026, we concluded that the e-vapor products operating segment was not expected to be of continuing significance and did not meet the quantitative thresholds as prescribed under ASC 280 for separate reportable segments.

As such, the e-vapor products operating segment is no longer considered a reportable segment, and we included the e-vapor products operating segment results in our all other category for all periods presented.

At March 31, 2026, our all other category included (i) e-vapor products, consisting of our NJOY business;

(ii) Horizon;

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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) 2026 2025

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(Income) losses from investments in equity securities ( 158 ) ( 143 )

Gain on the sale of IQOS System commercialization rights

— ( 2,700 ) — —

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

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

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

For the Three Months Ended March 31,

(in millions) 2026 2025

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Contingencies .

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

(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, asset impairment, marketing, administration and research costs and excise taxes on products sold.

Total oral tobacco products other segment items were $ 706 million and $ 1,088 million for the nine months ended September 30, 2025 and 2024, respectively, and $ 230 million and $ 258 million for the three months ended September 30, 2025 and 2024, respectively.

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

Total oral tobacco products other segment items were $ 234 million and $ 221 million for the three months ended March 31, 2026 and 2025, respectively.

The CODM reviews total oral tobacco products segment expenses in the aggregate in conjunction with the review of budget-to-actual OCI variances to manage segment operations.

Details of our depreciation expense and capital expenditures 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) 2026 2025

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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,

(in millions) 2025 2024 2025 2024

Smokeable products segment $ ( 2 ) $ ( 29 ) $ ( 2 ) $ ( 23 )

Interest and other debt expense, net — 2 — 2

Total $ ( 2 ) $ ( 27 ) $ ( 2 ) $ ( 21 )

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.

Contingencies .

▪ Asset Impairment, Exit and Implementation Costs:

We recorded exit and implementation costs of $ 43 million and $ 13 million related to the Initiative for the nine and three months ended September 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 nine months ended September 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 Nine Months Ended September 30, For the Three Months Ended September 30,

For the Three Months Ended March 31,

(in millions) 2026 2025

Smokeable products segment $ 2 $ 36

General corporate expenses — 30 ( 1 ) —

Interest and other debt expense, net

Total $ 2 $ 40

We recorded the amounts shown in the table above in our smokeable products segment and general corporate expenses in marketing, administration and research costs in our condensed consolidated statements of earnings.

We recorded the amounts shown in the table above in our smokeable products segment in marketing, administration and research costs in our condensed consolidated statements of earnings.

For further discussion, see Note 12.

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Short-term Borrowings and Borrowing Arrangements

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

In July 2025, we entered into an agreement to extend the expiration of our $ 3.0 billion senior unsecured 5-year revolving credit agreement from October 24, 2028 to October 24, 2029 (as extended, “Credit Agreement”).

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

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

At March 31, 2026 and December 31, 2025, we had no short-term borrowings.

We have a $ 3.0 billion senior unsecured 5-year revolving credit agreement (“Credit Agreement”) that expires on October 24, 2029 and includes an option, subject to certain conditions, for us to extend the term for an additional one-year period.

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

At September 30, 2025, we had availability under the Credit Agreement for borrowings of up to an aggregate principal amount of $ 3.0 billion.

At March 31, 2026, we had availability under the Credit Agreement for borrowings of up to an aggregate principal amount of $ 3.0 billion.

Pricing for interest and fees under our Credit Agreement may be modified in the event of a change in the rating of our long-term senior unsecured debt.

We expect interest rates on borrowings under our Credit Agreement to be based on the Term Secured Overnight Financing Rate plus a percentage based on the higher of the ratings of our long-term senior unsecured debt from Moody’s Investors Service, Inc.

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

The applicable percentage for borrowings under our Credit Agreement at September 30, 2025 was 1.0 % based on our long-term senior unsecured debt ratings on that date.

and Standard & Poor’s Financial Services LLC.

The applicable percentage for borrowings under our Credit Agreement at March 31, 2026 was 1.0 % based on our long-term senior unsecured debt ratings on that date.

Our Credit Agreement does not include any other rating triggers or any provisions that could require the posting of collateral.

Our Credit Agreement includes various covenants, one of which requires us to maintain a ratio of Consolidated EBITDA (earnings before interest, taxes, depreciation and amortization) to Consolidated Interest Expense of not less than 4.0 to 1.0, calculated for the four most recent fiscal quarters.

At September 30, 2025, we were in compliance with our covenants in our Credit Agreement.

At March 31, 2026, we were in compliance with our covenants in our Credit Agreement.

The terms “Consolidated EBITDA” and “Consolidated Interest Expense,” each as defined in our Credit Agreement, include certain adjustments.

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Long-term Debt

The aggregate carrying value of our total long-term debt at September 30, 2025 and December 31, 2024 was $ 25.7 billion and $ 24.9 billion, respectively.

In August 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.

The notes contain the following terms:

▪ $ 0.5 billion at 4.500 %, due 2030, interest payable semiannually beginning February 6, 2026;

▪ $ 0.5 billion at 5.250 %, due 2035, interest payable semiannually beginning February 6, 2026.

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 were used for general corporate purposes, which included repayment of certain of our notes in the second quarter of 2025 as discussed below.

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, the notes issued in August 2025 and the first quarter 2025 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.

In the second quarter of 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 € 750 million ($ 857 million), respectively.

PM USA guarantees our obligations under our outstanding debt securities.

At September 30, 2025 and December 31, 2024, accrued interest on long-term debt of $ 214 million and $ 389 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, 2026 and December 31, 2025 was $ 24.6 billion and $ 25.7 billion, respectively.

In February 2026, we repaid in full at maturity our 4.400 % senior unsecured notes in the aggregate principal amount of approximately $ 1.1 billion.

At March 31, 2026 and December 31, 2025, accrued interest on long-term debt of $ 243 million and $ 425 million, respectively, was included in other accrued liabilities on our condensed consolidated balance sheets.

For a discussion of the fair value of our long-term debt and the designation of our Euro denominated senior unsecured notes as a net investment hedge of our investment in ABI, see Note 5.

Financial Instruments .

The One Big Beautiful Bill Act (“OBBB”) was signed into law in July 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.

These provisions and modifications have not had a material impact on our condensed consolidated financial statements.

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,

(in millions) 2025 2024 2025 2024

Earnings before income taxes $ 7,876 $ 10,881 $ 3,075 $ 3,026

Provision for income taxes 2,046 2,656 700 733

Income tax rate 26.0 % 24.4 % 22.8 % 24.2 %

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

federal statutory rate of 21%, due primarily to state tax expense, the non-deductible impairment of the e-vapor reporting unit goodwill and a valuation allowance associated with our unrealized capital losses, partially offset by a net income tax benefit related to tax reserves as discussed below.

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

federal statutory rate of 21%, due primarily to state tax expense and a valuation allowance associated with our unrealized capital losses, partially offset by a net income tax benefit related to tax reserves as discussed below.

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

The income tax rates for the three months ended March 31, 2026 and 2025 were 23.6 % and 36.0 %, respectively.

The change in the income tax rate was due primarily to the non-deductible impairment of the e-vapor reporting unit goodwill in 2025.

For further discussion of the non-deductible impairment, see Note 2.

Goodwill and Other Intangible Assets, net .

Our income tax rate for the nine months ended September 30, 2024 differed 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.

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 differed from the U.S.

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

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

Investments in Equity Securities .

We are subject to income taxation in many jurisdictions.

Unrecognized tax benefits reflect the differences between tax positions we have taken or expect to take on income tax returns and the amounts recognized in the financial statements.

Resolution of the related tax positions with the relevant tax authorities may take many years to complete, and such timing is not entirely within our control.

On September 29, 2025, the U.S.

District Court for the Eastern District of Virginia ruled in favor of the IRS and denied our refund claim for the 2017 tax year, based on the Tax Cuts and Jobs Act of 2017’s removal of downward attribution rules, which the IRS invoked to attribute income from certain of ABI’s foreign subsidiaries to Altria.

We intend to vigorously contest the ruling by pursuing all available appellate remedies.

This ruling also has a potential impact for our 2018 through 2025 tax years.

Following this ruling, we reevaluated our position and concluded as of September 30, 2025, that it is no longer more likely than not that we will prevail at the conclusion of the appellate process.

Consequently, we reversed a receivable of $ 45 million for the 2017 tax year and recorded a full reserve for this uncertain tax position of $ 310 million for the 2018 through 2025 tax years.

Additionally, we reduced a deferred tax liability by $ 461 million due to the resulting increase in the tax basis of our investment in ABI, partially offset by a $ 77 million increase to a valuation allowance associated with the indirect effect on unrealized capital losses due to the decrease of a previously anticipated capital gain on the ABI Transaction.

As a result of the foregoing, we recognized a net tax benefit of $ 29 million for the nine and three months ended September 30, 2025 in our condensed consolidated statement of earnings related to a favorable rate differential associated with certain cross-border taxes included in the tax reserve.

Effective January 1, 2026, the OBBB reinstates this downward attribution rule, which will limit the impact of this ruling to the 2017 through 2025 tax years.

At September 30, 2025, our total unrecognized tax benefits were $ 573 million.

The amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate at September 30, 2025, was $ 20 million, along with $ 410 million affecting deferred taxes.

The amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate at December 31, 2024, was $ 189 million, along with $ 27 million affecting deferred taxes.

Unrecognized tax benefits increased by $ 291 million from December 31, 2024 due primarily to the removal of downward attribution rules applicable to income from certain ABI foreign subsidiaries.

The following chart provides a reconciliation of the beginning and ending valuation allowances for the nine months ended September 30, 2025:

(in millions)

Balance at beginning of year $ 668

Additions to valuation allowance charged to income tax expense 84

Releases of valuation allowance credited to income tax benefit ( 12 )

Balance at end of period $ 740

The changes in the valuation allowances for the nine months ended September 30, 2025 were due primarily to the indirect effects of tax reserves, as discussed above, on our unrealized capital losses.

The cumulative valuation allowance at September 30, 2025 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.

It is possible sufficient positive evidence may be available in future periods to cause us to 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 is recorded.

Contingencies

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States, including Florida, also may seek to repeal or alter bond cap statutes through legislation.

Although we cannot predict the outcome of such challenges, it is possible that our consolidated results of operations, cash flows or financial position could be materially affected in a particular fiscal quarter or fiscal year by an unfavorable outcome of one or more such challenges.

Although we cannot predict the outcome of such challenges, it is possible that our condensed consolidated results of operations, cash flows or financial position could be materially affected in a particular fiscal quarter or fiscal year by an unfavorable outcome of one or more such challenges.

We record provisions in our condensed consolidated financial statements for pending litigation when we determine that an unfavorable outcome is probable and the amount of the loss can be reasonably estimated.

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Nevertheless, litigation is subject to uncertainty and significant challenges remain.

It is possible that our consolidated results of operations, cash flows or financial position could be materially affected in a particular fiscal quarter or fiscal year by an unfavorable outcome or settlement of certain pending litigation.

It is possible that our condensed consolidated results of operations, cash flows or financial position could be materially affected in a particular fiscal quarter or fiscal year by an unfavorable outcome or settlement of certain pending litigation.

We believe, and have been so advised by counsel handling the respective cases, that we have valid defenses to the litigation pending against us, as well as valid bases for appeal of adverse verdicts.

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

For the Three Months Ended March 31,

(in millions) 2026 2025

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Tobacco and health and certain other litigation (1)

Shareholder derivative lawsuits (2)

JUUL-related settlements (2)

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(1) Includes judgments, settlements and fee disputes associated with tobacco and health and certain other litigation.

(2) See Federal and State Shareholder Derivative Lawsuits below for a discussion of the settlement of the federal and state shareholder derivative lawsuits.

(2) Includes the settlement of certain e-vapor product litigation relating to JUUL e-vapor products.

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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.

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 September 30, 2025.

Since October 2004, PM USA has paid judgments and settlements (including related costs and fees) totaling approximately $ 1.2 billion and interest totaling approximately $ 245 million as of March 31, 2026.

These amounts include payments for Engle progeny judgments (and related costs and fees) totaling approximately $ 454 million and related interest totaling approximately $ 62 million.

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

As of September 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.

As of March 31, 2026, PM USA has posted appeal bonds totaling approximately $ 15 million, which have been collateralized with restricted cash and are included in assets on our condensed consolidated balance sheets.

Overview of Tobacco-Related Litigation

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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 27, 2025 October 28, 2024 October 23, 2023

April 27, 2026 April 24, 2025 April 22, 2024

Individual Smoking and Health Cases (1)

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Other Tobacco-Related Cases (3)

(1) Includes as of October 27, 2025, 28 cases filed in Illinois, nine cases filed in New Mexico, 83 cases filed in Massachusetts, 15 cases filed in Oregon, eight cases filed in Hawaii, 11 cases filed in the U.S.

Virgin Islands and 12 non- Engle cases filed in Florida.

(1) Includes as of April 27, 2026, 34 cases filed in Illinois, nine cases filed in New Mexico, 94 cases filed in Massachusetts, 15 cases filed in Oregon, seven cases filed in Hawaii, 11 cases filed in the U.S.

Virgin Islands, 38 cases filed in Pennsylvania and nine non- Engle cases filed in Florida.

Does not include individual smoking and health cases brought by or on behalf of plaintiffs in Florida state and federal courts following the decertification of the Engle class (these Engle progeny cases are discussed below in Smoking and Health Litigation - Engle Progeny Cases ).

Also does not include one Broin case pending as of October 27, 2025.

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

(2) See Health Care Cost Recovery Litigation - Federal Government’s Lawsuit below.

(2) In May 2023, we reached agreement on terms to resolve the majority of the Multidistrict Litigation lawsuits, and, in March 2024, the court granted final approval of the settlement.

Pending final dismissal of these cases, as of October 27, 2025, the remaining cases include 12 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 April 27, 2026, the remaining cases include 11 individual cases that opted out of the settlement, four class action lawsuits pending in Canada and one individual state court case relating to the Multidistrict Litigation.

For further discussion of the Multidistrict Litigation settlement, see E-vapor Product Litigation below.

(4) Includes as of October 27, 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.

(3) See Certain Other Tobacco-Related Litigation - “Lights/Ultra Lights” Cases and Other Smoking and Health Class Actions below.

International Tobacco-Related Cases:

As of October 27, 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;

and (iii) PM USA and Altria are named as defendants in seven smoking and health class actions filed in various Canadian provinces.

See Guarantees and Other Similar Matters below for a discussion of the Distribution Agreement (defined below) between Altria and PMI that provides for indemnities for certain liabilities concerning tobacco products.

As of April 27, 2026, (i) Altria is named as a defendant in four e-vapor class action lawsuits in Canada;

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

and (iii) PM USA and Altria are named as defendants in six smoking and health class actions filed in various Canadian

See Smoking and Health Litigation - Other Smoking and Health Class Actions below for a discussion of the smoking and health class actions filed in various Canadian Provinces.

Also, see Guarantees and Other Similar Matters below for a discussion of the Distribution Agreement (defined below) between Altria and PMI that provides for indemnities for certain liabilities concerning tobacco products.

Tobacco-Related Cases Set for Trial:

As of October 27, 2025, no Engle progeny cases, two individual smoking and health cases and no e-vapor cases are set for trial through December 31, 2025.

As of April 27, 2026, one Engle progeny case, no individual smoking and health cases and no e-vapor cases are set for trial through June 30, 2026.

Trial dates are subject to change.

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Of the 34 non- Engle progeny cases in which verdicts were returned in favor of plaintiffs, 29 have reached final resolution.

See Smoking and Health Liti gation - Engle Progeny Trial Results below for a discussion of verdicts in state and federal Engle progeny cases involving PM USA as of October 27, 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 April 27, 2026.

Smoking and Health Litigation

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Non- Engle Progeny Litigation:

Summarized below are the non- Engle progeny smoking and health cases pending in which verdicts were returned in favor of plaintiff and against PM USA and remain outstanding or cases concluded within the last 12 months where PM USA paid a final judgment.

The charts below summarize the verdicts in and post-trial status of certain non- Engle progeny smoking and health cases in which verdicts were returned in favor of plaintiffs.

The first chart lists cases that are pending as of April 27, 2026 where PM USA has determined an unfavorable outcome is not probable and the amount of loss cannot be reasonably estimated, and the second chart lists cases that have concluded in the past 12 months where PM USA paid a final judgment.

In this Note 12.

Contingencies , references to “R.J.

Reynolds” are to R.J.

Reynolds Tobacco Company.

Unless otherwise noted for a particular case, the jury’s award for compensatory damages will not be reduced by any finding of plaintiff’s comparative fault.

Further, the damages noted reflect adjustments based on post-trial or appellate rulings.

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

Perez-Trinidad :

In October 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 $ 1 million in compensatory damages against PM USA and R.J.

Reynolds and $ 5.5 million in punitive damages against PM USA.

PM USA intends to file post-trial motions challenging the verdict and, if necessary, will appeal.

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, 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.

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

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

PM USA filed post-trial motions, which were denied, and PM USA filed a notice of appeal of the final judgment and the trial court’s denial of the post-trial motions.

Ricapor-Hall :

In August 2023, a jury in a Hawaii state court returned a verdict in favor of plaintiff and against PM USA, awarding $ 6 million in compensatory damages and $ 8 million in punitive damages.

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.

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.

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

Currently Pending Non-Engle Cases with Verdicts against PM USA

(rounded to nearest $ million)

Plaintiff Verdict Date Defendant(s) State Compensatory Damages (1)

Punitive Damages

(PM USA) Post-Trial Status

Petruzziello November 2025 PM USA R.J.

Reynolds MA <$ 1 million

Plaintiff has filed a notice of appeal.

Perez-Trinidad October 2025 PM USA R.J.

Reynolds MA $ 1 million

$ 5.5 million

PM USA and R.J.

Reynolds have filed notices of appeal.

Amaral March 2025 PM USA R.J.

Reynolds MA $ 4 million

PM USA and R.J.

Reynolds have filed notices of appeal.

Ricapor-Hall August 2023 PM USA HI $ 6 million ($ 3 million)

PM USA’s appeal and plaintiff’s cross-appeal remain pending.

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

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, 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.

In September 2023, the court denied PM USA’s motion for a new trial and partially granted PM USA’s motion for remittitur, reducing the punitive damages award to $ 56 million.

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.

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

The appeal remains pending.

Federal Government’s Lawsuit :

See Health Care Cost Recovery Litigation - Federal Government’s Lawsuit below for a discussion of the verdict and post-trial developments in the United States of America health care cost recovery case.

Fontaine September 2022 PM USA MA $ 8 million

The Massachusetts Supreme Judicial Court affirmed judgment.

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

Non-Engle Cases Concluded in Past 12 Months

(rounded to nearest $ million)

Plaintiff Verdict Date Defendant(s) State Payment Amount for Damages (if any)

Woodley August 2023 PM USA MA $ 5 million

Taylor August 2024 PM USA OR <$ 1 million

Engle Progeny Cases:

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Reynolds Tobacco Co., et.

, a smoking and health class action lawsuit filed in Florida state court against multiple defendants, including PM USA, in which the jury returned a verdict in favor of the plaintiff class and the trial court assessed punitive damages against the defendants.

, a smoking and health class action lawsuit filed in Florida state court against multiple

defendants, including PM USA, in which the jury returned a verdict in favor of the plaintiff class and the trial court assessed punitive damages against the defendants.

In July 2006, the Florida Supreme Court mandated that the trial court’s punitive damages award be vacated, that the class approved by the trial court be decertified and that members of the decertified class could file individual actions against defendants within one year of issuance of the mandate.

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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 27, 2025, approximately 51 state court cases were pending against PM USA or Altria asserting individual claims by or on behalf of approximately 66 state court plaintiffs.

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

As of April 27, 2026, approximately 44 state court cases were pending against PM USA or Altria.

Each federal Engle progeny case has been resolved.

Engle Progeny Trial Results:

As of October 27, 2025, 147 federal and state Engle progeny cases involving PM USA have resulted in verdicts.

As of April 27, 2026, 147 federal and state Engle progeny cases involving PM USA have resulted in verdicts.

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

Fifty-nine verdicts were returned in favor of PM USA, one of which has been reversed post-trial or on appeal and remains pending.

In addition, there have been a number of mistrials, only some of which have resulted in new trials as of October 27, 2025.

In addition, there have been a number of mistrials, only some of which have resulted in new trials as of April 27, 2026.

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

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

The chart below lists the verdicts in and post-trial status of certain Engle progeny cases in which verdicts were returned in favor of plaintiffs.

The chart lists cases that are pending as of October 27, 2025 where PM USA has determined an unfavorable outcome is not probable and the amount of loss cannot be reasonably estimated.

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.

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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Appeals to the Third District Court of Appeal pending.

Chacon October 2023 PM USA Miami-Dade <$ 1 million

Appeals to the Third District Court of Appeal pending.

Lipp September 2021 PM USA Miami-Dade $ 15 million $ 28 million Third District Court of Appeal reversed and remanded for a new trial.

McCall March 2019 PM USA Broward <$ 1 million (<$ 1 million PM USA)

Appeal to the Fourth District Court of Appeal pending.

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

Engle Cases Concluded in Past 12 Months

(rounded to nearest $ million)

Plaintiff Verdict Date Defendant(s) Court Payment Amount for Damages (if any)

Chacon October 2023 PM USA Miami-Dade $ 1 million

McCall October 2023 PM USA Broward <$ 1 million

Other Smoking and Health Class Actions:

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In general, these cases have purported to be brought on behalf of residents of a particular state or states (although a few cases have purported to be nationwide in scope) and have raised addiction claims and, in many cases, claims of physical injury as well.

Class certification has been denied or reversed by courts in 61 smoking and health class actions involving PM USA in Arkansas ( 1 ), California ( 1 ), Delaware ( 1 ), the District of Columbia ( 2 ), Florida ( 2 ), Illinois ( 3 ), Iowa ( 1 ), Kansas ( 1 ), Louisiana ( 1 ), Maryland ( 1 ), Michigan ( 1 ), Minnesota ( 1 ), Nevada ( 29 ), New Jersey ( 6 ), New York ( 2 ), Ohio ( 1 ), Oklahoma ( 1 ), Oregon ( 1 ), Pennsylvania ( 1 ), Puerto Rico ( 1 ), South Carolina ( 1 ), Texas ( 1 ) and Wisconsin ( 1 ).

Class certification has been denied or reversed by courts in approximately 60 smoking and health class actions involving PM USA.

See Certain Other Tobacco-Related Litigation below for a discussion of “Lights” and “Ultra Lights” class action cases and medical monitoring class action cases pending against PM USA.

As of October 27, 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.

As of April 27, 2026, PM USA and Altria are named as defendants, along with other cigarette manufacturers, in six class actions filed in the Canadian provinces of Alberta, Manitoba, Nova Scotia, Saskatchewan and British Columbia.

In Saskatchewan and British Columbia ( two separate cases), plaintiffs seek class certification on behalf of individuals who suffer or have suffered from various diseases, including chronic obstructive pulmonary disease, emphysema, heart disease or cancer, after smoking defendants’ cigarettes.

actions filed in Alberta, Manitoba and Nova Scotia, plaintiffs seek certification of classes of all individuals who smoked defendants’ cigarettes.

In March 2019, all of these class actions were stayed as a result of three Canadian tobacco manufacturers ( no ne of which is related to us) seeking protection under Canada’s Companies’ Creditors Arrangement Act (which is similar to Chapter 11 bankruptcy in the United States).

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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 October 27, 2025, PM USA is named as a defendant in one case brought by a flight attendant against United States cigarette manufacturers seeking compensatory damages for personal injuries allegedly caused by exposure to environmental tobacco smoke (“ETS”).

The flight attendant alleges that they are a member of an ETS smoking and health class action in Florida that was settled in 1997 ( Broin ).

The terms of the court-approved settlement in that case allowed class members to file individual lawsuits seeking compensatory damages but prohibited them from seeking punitive damages.

Class members were prohibited from filing individual lawsuits after 2000 under the court-approved settlement.

In July 2024, we reached agreement on terms to resolve approximately 627 individual Broin lawsuits.

Accordingly, in the second quarter of 2024, we recorded a pre-tax provision of $ 4 million related to the settlement of these cases, which we paid in the third quarter of 2024.

Health Care Cost Recovery Litigation

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Supreme Court has refused to consider plaintiffs’ appeals from the cases decided by five federal circuit courts of appeal.

In addition to the cases brought in the United States, health care cost recovery actions have been brought against tobacco industry participants, including PM USA and Altria, in Canada ( 10 cases), and other entities have stated that they are considering filing such actions.

Since the beginning of 2008, the Canadian Provinces of British Columbia, New Brunswick, Ontario, Newfoundland and Labrador, Quebec, Alberta, Manitoba, Saskatchewan, Prince Edward Island and Nova Scotia have brought health care reimbursement claims against cigarette manufacturers.

PM USA is named as a defendant in the British Columbia and Quebec cases, while both Altria and PM USA are named as defendants in the New Brunswick, Ontario, Newfoundland and Labrador, Alberta, Manitoba, Saskatchewan, Prince Edward Island and Nova Scotia cases.

In addition to the cases brought in the United States, health care cost recovery actions have been brought against tobacco industry participants, including PM USA and Altria, in Canada ( nine cases), and other entities have stated that they are considering filing such actions.

Since the beginning of 2008, the Canadian Provinces of British Columbia, New Brunswick, Newfoundland and Labrador, Quebec, Alberta, Manitoba, Saskatchewan, Prince Edward Island and Nova Scotia have brought health care reimbursement claims against cigarette manufacturers.

PM USA is named as a defendant in the British Columbia and Quebec cases, while both Altria and PM USA are named as defendants in the New Brunswick, Newfoundland and Labrador, Alberta, Manitoba, Saskatchewan, Prince Edward Island and Nova Scotia cases.

The Nunavut Territory and Northwest Territory have passed legislation permitting similar claims, but lawsuits based on this legislation have not been filed.

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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.

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 nine months ended September 30, 2025 and 2024, the aggregate amount recorded in cost of sales with respect to the State Settlement Agreements was approximately $ 2.3 billion and $ 2.7 billion, respectively.

For the three months ended September 30, 2025 and 2024, the aggregate amount recorded in cost of sales with respect to the State Settlement Agreements was approximately $ 800 million and $ 900 million, respectively.

For the three months ended March 31, 2026 and 2025, the aggregate amount recorded in cost of sales with respect to the State Settlement Agreements was approximately $ 700 million for each period.

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

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▪ Multi-State Settlement .

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

As of December 2025, a total of 39 states and territories had joined the multi-state settlement.

Pursuant to this settlement, PM USA has received $ 1.47 billion since 2014 and expects to receive annual credits applied against PM USA’s MSA payments through 2041.

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▪ Montana Settlement .

In 2020, PM USA entered into a separate NPM Adjustment settlement in which PM USA settled the NPM Adjustment disputes with the State of Montana through 2030, resulting in a payment from PM USA to the State of Montana for an immaterial amount.

▪ Massachusetts Settlement .

In 2024, PM USA entered into a separate NPM Adjustment settlement in which PM USA settled the NPM Adjustment disputes with the Commonwealth of Massachusetts through 2011.

As a result of this settlement, PM USA will receive $ 28 million.

Accordingly, PM USA recorded $ 28 million as a reduction in costs of sales in the third quarter of 2024.

As a result of this settlement, PM USA received $ 28 million as a credit against its April 2026 MSA payment to the Commonwealth of Massachusetts.

PM USA recorded $ 28 million as a reduction in costs of sales in the third quarter of 2024.

▪ Washington Settlement.

In 2025, PM USA entered into a separate NPM Adjustment settlement in which PM USA settled the NPM Adjustment disputes with the State of Washington through 2015.

As a result of this settlement, PM USA received $ 53 million as a credit against its April 2026 MSA payment to the State of Washington.

In addition to the amounts recorded in the fourth quarter of 2023 discussed below in connection with the 2005 through 2007 NPM Adjustments, PM USA recorded a $ 22 million reduction in costs of sales and $ 4 million of interest expense in the fourth quarter of 2025.

Territories Settlement .

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Virgin Islands through 2024.

As a result of this settlement, PM USA will receive a credit in an immaterial amount applied against its April 2026 MSA payment to those territories.

Accordingly, PM USA recorded an immaterial amount as a reduction in cost of sales in the third quarter of 2025.

As a result of this settlement, PM USA received a credit in an insignificant amount applied against its April 2026 MSA payment to those territories.

PM USA recorded an insignificant amount as a reduction in cost of sales in the third quarter of 2025.

Continuing NPM Adjustment Disputes with States That Have Not Settled .

▪ 2004 NPM Adjustment.

The PMs and the 10 states that had not settled the NPM Adjustment disputes for 2004 participated in a multi-state arbitration.

The PMs and 10 states that had not settled the NPM Adjustment disputes for 2004 participated in a multi-state arbitration.

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

The States of 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.

The State of New Mexico challenged the determination in its state court, and the trial court vacated the award.

PM USA appealed, and the New Mexico Court of Appeals reinstated the award.

▪ 2005-2007 NPM Adjustments.

The PMs and the six states that have not settled the NPM Adjustment disputes are currently arbitrating certain NPM Adjustment disputes before a single arbitration panel.

The PMs and six states that had not settled the NPM Adjustment disputes are currently arbitrating certain NPM Adjustment disputes before a single arbitration panel.

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

As of October 27, 2025, the arbitration panel had issued decisions for four of the six states (Maryland, Washington, Wisconsin and Ohio), finding the States of 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.

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

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.

As of April 27, 2026, the arbitration panel found the States of Maryland, Wisconsin and Ohio diligent for all three years , the State of Washington not diligent for all three years and the State of Missouri not diligent for 2005.

The State of Washington subsequently settled, as discussed above.

PM USA recorded $ 14 million as a reduction in costs of sales and $ 21 million as interest income in the fourth quarter of 2023 for its estimate of the minimum amount of the 2005 through 2007 NPM Adjustments it will receive related to the Washington finding.

PM USA recorded an insignificant amount as a reduction in cost of sales in the first quarter of 2026 related to the Missouri finding.

▪ Subsequent Years.

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

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

In September 2024, PM USA and the State of Mississippi settled their dispute over the profit adjustment payments.

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The State of Texas filed a cross-motion to enforce, and the court found in favor of the State of Texas.

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.

In March 2025, the court issued a final order in the matter, finding that PM USA owes $ 31 million to the State of Texas, plus pre- and post-judgment interest.

PM USA has appealed, and the appeal remains pending.

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The court found in favor of the State of Minnesota.

In October 2025, the court issued an order as to damages, finding that PM USA owes the State of Minnesota $ 10 million plus pre-judgment and post-judgment interest.

PM USA intends to appeal.

Federal Government’s Lawsuit:

In 1999, the U.S.

government filed a lawsuit in the U.S.

District Court for the District of Columbia against various cigarette manufacturers, including PM USA, and others, including Altria, asserting claims under three federal statutes.

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.

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.

Corrective statements appeared in newspapers and on television for four months and one year , respectively, beginning in the fourth quarter of 2017, and the onserts appeared for two weeks at a time for a total of twelve weeks over two years beginning in the fourth quarter of 2018.

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, which appeared through June 2025.

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

In October 2025, the court issued an order as to damages, finding that PM USA owes the State of Minnesota $ 10 million plus pre- and post-judgment interest.

PM USA has appealed, and the appeal remains pending.

E-vapor Product Litigation

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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.

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

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

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.

The parties separately agreed that Fuma would dismiss its patent infringement claims in exchange for $ 10 million, and such claims were dismissed in August 2023.

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.

E-vapor Patent Litigation

JUUL Patent Litigation:

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

(“NJOY Holdings”) and NJOY in the U.S.

District Court for the District of Arizona asserting claims of patent

infringement based on the sale of NJOY ACE in the United States.

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 .

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No damages are recoverable in the proceedings before the ITC.

In August 2024, the Administrative Law Judge (“ALJ”) issued an initial determination supporting the plaintiffs’ allegations with respect to four patents and recommending an exclusion order.

In September 2024, NJOY petitioned the ITC to review the ALJ’s initial determination.

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

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.

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.

In January 2025, following an initial determination by the Administrative Law Judge (“ALJ”), the ITC issued its final determination finding that NJOY ACE infringes the four patents plaintiffs asserted and issued an exclusion order and cease-and-desist orders prohibiting the importation and sale of NJOY ACE in the United States.

The orders became effective on March 31, 2025.

We have appealed the orders to the U.S.

Court of Appeals for the Federal Circuit.

The final exclusion order and cease-and-desist orders will remain in effect during the pendency of the appeal.

The orders will remain in effect during the pendency of the appeal.

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

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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.

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

The lawsuit was stayed pending the final determination of an ITC investigation NJOY filed against JUUL in August 2023 (discussed below).

In October 2025, after the final determination of the corresponding ITC investigation, NJOY moved to lift the stay, and the court granted the motion.

JUUL subsequently moved to re-stay the case, which was denied.

Trial currently is set for June 2027.

Also in August 2023, NJOY filed a related action against JUUL with the ITC alleging patent infringement and seeking a ban on the importation and sale of the same JUUL products in the United States.

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

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, research and development 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.

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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.

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

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

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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 discussed above, 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, 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.

In August 2025, JUUL filed an additional lawsuit against Altria and our affiliates AGDC, ALCS, NJOY Holdings and NJOY in the U.S.

District Court for the District of Arizona asserting claims of patent infringement based on the sale of NJOY Daily in the United States.

Plaintiffs seek various remedies, including damages and an injunction on sales of NJOY Daily and any other products NJOY may be developing or preparing for commercialization in the United States that would infringe JUUL’s patent.

Plaintiff seeks various remedies, including damages and an injunction on sales of NJOY Daily and any other products NJOY may be developing or preparing for commercialization in the United States that would infringe JUUL’s patent.

Also in August 2025, JUUL filed a related action against the same defendants with the ITC.

There, JUUL also alleges patent infringement, but the remedies sought include an exclusion order that would prohibit the importation into the United States of NJOY Daily and any other products NJOY may be developing or preparing for commercialization in the United States that

would infringe JUUL’s patent.

No damages are recoverable in the proceedings before the ITC.

A hearing before the ALJ is scheduled for April 2026, and we expect an initial determination from the ALJ in September 2026, subject to the ALJ’s ability to grant herself an extension.

The ALJ’s recommendation will be reviewed by the ITC, and we expect the ITC’s final determination in January 2027, subject to the ITC’s right to grant itself an extension.

In September 2025, NJOY filed an additional complaint against JUUL in the U.S.

Also in September 2025, NJOY, ALCS, and AGDC 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.

Reynolds Litigation

In April 2020, RAI Strategic Holdings, Inc.

Reynolds Vapor Co., which are affiliates of R.J.

Reynolds, filed a lawsuit against Altria, PM USA, ALCS, PMI and its affiliate, Philip Morris Products S.A., in the U.S.

District Court for the Eastern District of Virginia asserting claims of patent infringement based on the sale of the IQOS System electronic device and Marlboro HeatSticks in the United States.

Plaintiffs sought various remedies, including preliminary and permanent injunctive relief, treble damages and attorneys’ fees.

Altria and PMI were previously dismissed from the lawsuit, and plaintiffs’ claims against the other defendants were dismissed in August 2025.

PM USA, ALCS and Philip Morris Products S.A.

filed counterclaims against plaintiffs in the Eastern District of Virginia lawsuit alleging patent infringement by R.J.

Reynolds’ e-vapor products.

In June 2022, PM USA and ALCS reached an agreement with R.J.

Reynolds resulting in dismissal of their counterclaims.

In addition, ALCS filed a separate lawsuit against R.J.

In April 2026, the ALJ granted NJOY’s motion for summary determination, finding that the sole patent that forms the basis of JUUL’s action is invalid.

JUUL has petitioned the ITC to review the ALJ’s initial determination.

In November 2025, Altria, AGDC, ALCS, NJOY Holdings and NJOY sued the ITC and the ALJ in the U.S.

District Court for the Eastern District of Virginia, seeking to enjoin the ITC and ALJ from adjudicating JUUL’s action.

The lawsuit asserts that Altria and our affiliates are entitled to have JUUL’s claims heard in a federal court and be tried to a jury, and that the ALJ is unconstitutionally appointed and shielded from removal by the President.

Altria and our affiliates have moved for summary judgment and a preliminary injunction.

Also in November 2025, NJOY Holdings and NJOY filed a petition with PTAB challenging the validity of the patent underlying JUUL’s August 2025 actions.

In April 2026, PTAB issued a discretionary denial of that petition, refusing to reach the merits of whether JUUL’s patent is valid.

In September 2025, NJOY, ALCS, and AGDC filed an action against JUUL with the ITC alleging patent infringement and seeking a ban on the importation and sale of the same JUUL products in the United States.

A hearing before the ALJ is scheduled for September 2026, and we expect an initial determination from the ALJ in December 2026, subject to the ALJ’s ability to grant himself an extension.

The ALJ’s recommendation will be reviewed by the ITC, and we expect the ITC’s final determination in April 2027, subject to the ITC’s right to grant itself an extension.

Reynolds Patent Litigation:

ALCS filed a lawsuit against R.J.

Reynolds in the U.S.

District Court for the Middle District of North Carolina also alleging patent infringement by R.J.

District Court for the Middle District of North Carolina alleging patent infringement by R.J.

Reynolds’ e-vapor products.

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Reynolds moved the district court to vacate the judgment, including the damages awards and ongoing royalties, on the grounds that R.J.

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

Reynolds obtained a sublicense to the asserted patents from JUUL in December 2023.

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

The district court also found that additional proceedings were warranted on the part of the motion regarding royalties after R.J.

Reynolds obtained the sub-license.

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

Reynolds obtained the sublicense.

The district court’s evidentiary hearing occurred in April 2026.

Any gains related to this lawsuit remain subject to these district court proceedings.

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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 October 27, 2025, 17 putative class action lawsuits have been filed against Altria and JUUL in the U.S.

As of April 27, 2026, 17 putative class action lawsuits have been filed against Altria and JUUL in the U.S.

District Court for the Northern District of California.

In November 2020, these lawsuits were consolidated into three complaints (one on behalf of direct purchasers, one on behalf of indirect purchasers and one on behalf of indirect resellers).

The consolidated lawsuits, as amended, allege that Altria and JUUL violated Sections 1, 2 and/or 3 of the Sherman Antitrust Act of 1890 and Section 7 of the Clayton Antitrust Act and various state antitrust, consumer protection and unjust enrichment laws by restraining trade and/or substantially lessening competition in the U.S.

The consolidated lawsuits, as amended, allege that Altria and JUUL violated Sections 1, 2 and/or 3 of the Sherman Antitrust Act of 1890 and Section 7 of the Clayton Antitrust Act and various state antitrust and consumer protection laws by restraining trade and/or substantially lessening competition in the U.S.

closed-system electronic cigarette market.

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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

In October 2022, we agreed to settle a series of federal and state derivative cases brought by Altria shareholders on behalf of themselves and Altria against Altria and certain of our current and former executives and directors and JUUL, its founders and certain of its current and former executives.

The cases related to our former investment in JUUL and asserted claims of breach

of fiduciary duty by the Altria defendants and aiding and abetting in that alleged breach of fiduciary duty by the remaining defendants.

Under the terms of the settlement, which became effective in May 2023, among other things, we agreed to provide $ 100 million in funding over a five-year period to underage tobacco prevention and cessation programs, which may include positive youth development programs, led by independent third-party organizations.

We began providing funding in the third quarter of 2024.

In 2022, we recorded pre-tax provisions totaling $ 27 million for costs associated with the independent monitoring of our funding commitments and attorneys’ fees.

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.

In February 2026, the U.S.

District Court for the Northern District of California certified three classes of plaintiffs (one of direct purchasers, one of indirect purchasers and one of indirect resellers).

In March 2026, Altria and JUUL filed a petition with the Ninth Circuit Court of Appeals seeking discretionary review of the class certification decision, which the court granted in April 2026.

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

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 27, 2025, two “Lights/Ultra Lights” class actions are pending in U.S.

As of April 27, 2026, two “Lights/Ultra Lights” class actions are pending in U.S.

state courts.

Neither case is active.

As of October 27, 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 April 27, 2026, one smoking and health case alleging personal injury or seeking court-supervised programs or an ongoing medical monitoring program on behalf of individuals exposed to ETS and purporting to be brought on behalf of a class of individual plaintiffs, is pending in a U.S.

The case is currently inactive.

UST Litigation :

UST and/or its tobacco subsidiaries have been named in a number of individual tobacco and health lawsuits over time.

Plaintiffs’ allegations of liability in these cases have been based on various theories of recovery, such as negligence, strict liability, fraud, misrepresentation, design defect, failure to warn, breach of implied warranty, addiction and breach of consumer protection statutes.

Plaintiffs have typically sought various forms of relief, including compensatory and punitive damages, and certain equitable relief, including disgorgement.

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 27, 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, 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.

Additionally, we provide certain guarantees to a limited number of third parties related to contractual obligations.

At March 31, 2026, we had $ 43 million of unused letters of credit obtained in the ordinary course of business.

These items have not had, and are not expected to have, a significant impact on our liquidity.

Under the terms of a distribution agreement between Altria and PMI (“Distribution Agreement”), entered into as a result of our 2008 spin-off of our former subsidiary PMI, liabilities concerning tobacco products will be allocated based in substantial part on the manufacturer.

PMI will indemnify Altria and PM USA for liabilities related to tobacco products manufactured by PMI or contract manufactured for PMI by PM USA, and PM USA will indemnify PMI for liabilities related to tobacco products

manufactured by PM USA, excluding tobacco products contract manufactured for PMI.

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

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

We do not have a related liability recorded on our condensed consolidated balance sheet at March 31, 2026 as the fair value of this indemnification is insignificant.

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

PM USA guarantees our obligations under our outstanding debt securities, any borrowings under our $ 3.0 billion Credit Agreement and any amounts outstanding under our commercial paper program.

Additional Financial Statement Information

Share Repurchases

In January 2025, our Board of Directors (“Board” or “Board of Directors”) authorized a $ 1.0 billion share repurchase program that it expanded to $ 2.0 billion in October 2025.

At March 31, 2026, we had $ 720 million remaining under this program, which expires on December 31, 2026.

Share repurchases depend on marketplace conditions and other factors, and the program remains subject to the discretion of our Board.

Our share repurchase activity was as follows:

For the Three Months Ended March 31,

(in millions, except per share data) 2026

Total number of shares repurchased 4.5 5.7

Aggregate cost of shares repurchased $ 280 $ 326

Average price per share of shares repurchased $ 62.33 $ 56.97

Cash, Cash Equivalents and Restricted Cash

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

March 31, 2026 December 31, 2025

Cash and cash equivalents $ 3,531 $ 4,474

Restricted cash included in other current assets 5 7

Restricted cash included in other assets 14 11

Cash, cash equivalents and restricted cash $ 3,550 $ 4,492

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

Contingencies .

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

At March 31, 2026, December 31, 2025 and December 31, 2024, receivables were $ 284 million, $ 263 million and $ 177 million, respectively.

Deferred Revenue

We record deferred revenue when our businesses receive payment in advance of product shipment, which we include in other accrued liabilities on our condensed consolidated balance sheets until revenue is recognized, and our companies typically satisfy their performance obligations within three days of receiving payment.

At March 31, 2026, December 31, 2025 and December 31, 2024, deferred revenue was $ 169 million, $ 231 million and $ 215 million, respectively.

At March 31, 2026, December 31, 2025 and December 31, 2024, there were no differences between amounts recorded as deferred revenue from contracts with customers and amounts subsequently recognized as revenue.

Supplier Financing

At March 31, 2026 and December 31, 2025, confirmed outstanding obligations under the supplier financing program, which are recorded in accounts payable on our condensed consolidated balance sheets, were $ 157 million and $ 159 million, respectively.

New Accounting Guidance Not Yet Adopted

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Standards Description Effective Date for Public Entity Effect on Financial Statements

Accounting Standards Update (“ASU”) No.

2023-09 Income Taxes (Topic 740):

Improvements to Income Tax Disclosures

The guidance will require additional income tax disclosures, primarily related to the rate reconciliation and income taxes paid information.

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, which we plan to adopt retrospectively.

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.

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.

2025-05 Financial Instruments-Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets

The guidance provides a practical expedient for the calculation of current expected credit losses on current accounts receivable and current contract assets that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset.

The guidance is effective for fiscal years beginning after December 15, 2025, and interim periods within those fiscal years.

We are in the process of evaluating the impact of this guidance on our consolidated financial statements and related disclosures.

2025-06 Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software

The guidance replaces the current framework that is based on software development project stages with updated criteria, focused on management’s authorization and the probability of project completion, to determine the timing for cost capitalization.

Targeted Improvements to the Accounting for Internal-Use Software The guidance replaces the current framework that is based on software development project stages with updated criteria, focused on management’s authorization and the probability of project completion, to determine the timing for cost capitalization.

The guidance is effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years.

We are in the process of evaluating the impact of this guidance on our consolidated financial statements and related disclosures.

Standards Description Effective Date for Public Entity Effect on Financial Statements

2025-07 Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606):

Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract

The guidance refines the scope of Topic 815 by excluding from derivative accounting non-exchange trading contracts that have underlyings based on operations or activities specific to one of the parties to the contract with certain exceptions and clarifies the applicability of Topic 606 to share-based noncash consideration received from a customer in exchange for goods or services.

Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract The guidance refines the scope of Topic 815 by excluding from derivative accounting non-exchange trading contracts that have underlyings based on operations or activities specific to one of the parties to the contract with certain exceptions and clarifies the applicability of Topic 606 to share-based noncash consideration received from a customer in exchange for goods or services.

The guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within those fiscal years.

We are in the process of evaluating the impact of this guidance on our consolidated financial statements and related disclosures.

2025-09 Derivatives and Hedging (Topic 815):

Hedge Accounting Improvements The guidance includes expanding eligibility for cash flow hedges of groups of forecasted transactions, introducing a model for hedging forecasted interest payments on “choose-your-rate” debt instruments, permitting designation of variable price components in forecasted purchases or sales of nonfinancial assets and clarifying guidance for net investment hedges and dual hedge strategies.

The guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within those fiscal years.

We are in the process of evaluating the impact of this guidance on our consolidated financial statements and related disclosures.

2025-11 Interim Reporting (Topic 270):

Narrow-Scope Improvements The guidance clarifies interim disclosure requirements, provides a comprehensive list of disclosures required by GAAP and includes a disclosure principle for events since the last annual reporting period to enhance consistency in interim reporting.

The guidance is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027.

We are in the process of evaluating the impact of this guidance on our interim condensed consolidated financial statements and related disclosures.

2025-12 Codification Improvements The guidance provides changes that clarify, correct errors or make minor improvements to GAAP.

The guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within those fiscal years.

We are in the process of evaluating the impact of this guidance on our consolidated financial statements and related disclosures.

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