Philip Morris International Inc 8-K, filed Oct 21, 2026
Philip Morris International Inc. (PM)
8-K
2026-10-21
For: 2026-10-21
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October 21, 2026
About this 8-K
Philip Morris International Inc filed this 8-K on October 21, 2026.
Philip Morris International reported Q3 operating income up 14.1% and adjusted diluted EPS of $2.36, up 5.4%; it forecast 2026 adjusted diluted EPS growth of 9.9% to 11.9% and raised the dividend 8.8% to $1.60 per share. AI summary
Items reported
- Item 2.02: Financial results
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 21, 2026
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
| (Address of principal executive offices) | (Zip Code) | ||||||||||||||||
Registrant's telephone number, including area code: (203 ) 905-2410
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). | |||||
Emerging growth company | |||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ☐ | ||||
| Item 2.02. | Results of Operations and Financial Condition. | ||||
On October 21, 2026, Philip Morris International Inc. (the “Company”) issued a press release announcing its financial results for the third quarter and the nine months ended September 30, 2026, as well as the accompanying glossary of key terms, definitions, explanatory notes, select financial information and reconciliations of non-GAAP financial measures. The earnings release is attached as Exhibit 99.1 to this Current Report on Form 8-K and incorporated by reference to this Item 2.02. The glossary of key terms, definitions, explanatory notes, select financial information and reconciliations of non-GAAP financial measures is attached as Exhibit 99.2 to this Current Report on Form 8-K and incorporated by reference to this Item 2.02.
In accordance with General Instruction B.2 of Form 8-K, the information in Item 2.02 of this Current Report on Form 8-K, including Exhibits 99.1 and 99.2, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The information in Item 2.02 of this Current Report on Form 8-K shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as may be expressly set forth by specific reference in such filing or document.
| Item 9.01. | Financial Statements and Exhibits. | ||||
| (d) | Exhibits. | ||||
| 104 | Cover Page Interactive Data File (formatted in Inline XBRL). | ||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| PHILIP MORRIS INTERNATIONAL INC. | ||||||||
| By: | /s/ DARLENE QUASHIE HENRY | |||||||
| Name: | Darlene Quashie Henry | |||||||
| Title: | Vice President, Associate General Counsel & Corporate Secretary | |||||||
Date: October 21, 2026
Exhibit 99.1
| PRESS RELEASE |  | ||||
Philip Morris International Reports 2026 Third-Quarter & First Nine-Months Results
and Updates 2026 Full-Year Adjusted Diluted EPS Forecast for Currency Only;
Third-Quarter Reported Diluted EPS declined by 4.9% to $2.12;
Adjusted Diluted EPS grew by 5.4% to $2.36; and by 5.8% excluding currency;
STAMFORD, CT, October 21, 2026 – Philip Morris International Inc. (PMI) (NYSE: PM) today announces its 2026 third-quarter results.1
"We delivered another excellent quarter, with growing total volumes, double-digit organic operating income growth and robust margin expansion," said Jacek Olczak, Group CEO PMI.
"With continued strong offtake momentum for our smoke-free brands and the exceptional results of our combustible business, we are in a strong position to continue delivering best-in-class performance, and firmly on track for a sixth consecutive year of volume growth."
| Results Highlights - Third Quarter 2026 | ||
Shipments increased by 0.6% in the quarter, driven by a 2.7% increase in smoke-free products (SFP), with shipment growth across all categories, supported by high single-digit growth in SFP adjusted in-market sales (IMS), which is the closest proxy to consumer offtake. This was complemented by the continuing resilience of the combustible segment, notably in markets where SFPs are banned or have a limited market presence.
Net revenues increased by 5.5% (7.1% organically) to $11.4 billion, with growth across both smoke-free (up by 4.1%, 6.3% organically) and combustibles (up by 6.4%, 7.7% organically). Our smoke-free business accounted for more than 40% of total net revenues in the third quarter, and around 42% on a year-to-date basis, with more than 30 markets above 50%. PMI smoke-free products are now available in 110 markets.
Gross profit increased by 6.7% (8.3% organically), expanding gross margins through strong combustible pricing, scale and SFP mix benefits. Operating income increased by 14.1% (10.5% organically), reflecting the underlying strength of the business. This strong financial performance represents a new record quarterly high of net revenue, gross profit and operating income for the group.
Reported diluted EPS of $2.12 declined by 4.9%, mainly due to the non-cash fair value adjustment for equity security investments. Adjusted diluted EPS grew by 5.4%, or by 5.8% excluding a one cent unfavorable currency impact to reach $2.36, another quarterly all-time high.
International Smoke-Free Segment
Net revenue growth of 0.7% (3.4% organically) was driven by 2.7% volume growth, against the backdrop of a challenging HTU comparison due to the phasing of shipments between periods, notably in Japan. Strong adjusted IMS momentum continued, with an acceleration to 8.0% growth. Gross profit grew by 0.8% (3.3% organically).
1 Explanation of PMI's use of non-GAAP measures cited in this document and reconciliations to the most directly comparable U.S. GAAP measures can be found in the “Non-GAAP Measures, Glossary and Explanatory Notes” section of this release, in Exhibit 99.2 to the company's Form 8-K dated October 21, 2026, and here.
- 1 -
Heat-not-burn SFP: IQOS continued to lead the growth of the global category, in which PMI holds around three-quarters of HTU volume share. IQOS HTUs gained 1.0pp to reach 9.9% of combined cigarette and HTU industry volumes in markets where present and grew shipment volumes by 1.5% to 41.5 billion units, at the high end of our previously disclosed expectations. HTU adjusted IMS grew by 7.1%. Excluding Japan and Poland, adjusted IMS continued to grow in the double digits, increasing by 10%, reflecting broad-based growth across a variety of markets, underscoring the increasing geographic diversification of IQOS.
•In Japan, PMI HTU adjusted IMS grew by 3.4%, or by 1.3% excluding the estimated consumer pantry-loading impact ahead of the October 1 excise-driven price increase (JPY20 per pack). This continues to be broadly in line with our expectations as consumers adjust following the first excise-driven price increase (JPY40 per pack) on April 1. IQOS maintained a strong category share at 68%, with SENTIA continuing to play a key role in capturing price-sensitive TEREA consumers.
•In Europe, IQOS HTU adjusted IMS growth strengthened to an estimated 6.0%, notwithstanding ongoing disruptions in Ukraine and the continued impact of the characterizing flavor ban in Poland. IQOS HTU adjusted market share increased by 0.9pp to 11.6%. This growth was led by strong performance in many markets, notably Germany, Greece, Spain and Romania. Adjusted IMS in Italy continued its strong growth trajectory, underscoring the category's significant potential across the region. Excluding Poland, adjusted IMS volumes grew by around 8%.
•Outside Europe and Japan, adjusted IMS grew by 12.7% and offtake share increased in key cities across the globe, including Riyadh, Kuala Lumpur, Mexico City, Jakarta and Taipei, underlining the global growth potential of the heat-not-burn category.
Oral SFP: Total oral SFP volumes turned positive, increasing by 0.5%, as growth in modern oral of 20.6% to 0.5 billion pouches more than offset declines in the legacy Nordic snus business. We continue to expand ZYN's footprint, with ZYN now available in 62 international markets and showing promising growth in geographies such as Global Travel Retail, Poland, and the Philippines, as well as sequential improvements in Sweden.
E-vapor SFP: We continue to drive outstanding growth in VEEV, with quarterly shipments up by 61.6%. VEEV further reinforced its leadership position in Europe, with strong growth across a range of markets, notably Romania, Greece, France and Spain. VEEV is also demonstrating promising results in markets outside of Europe, such as Indonesia, Global Travel Retail, Egypt, Malaysia and South Korea following the launch in August. PMI remains committed to building and commercializing the brand in a focused, responsible and profitable manner, leveraging its key role as part of our multicategory portfolio.
International Combustibles Segment
The combustibles segment delivered an exceptional quarter, with cigarette volume continuing to show strong resilience with broadly flat shipments. This was notably due to strong growth in markets such as Turkey, Indonesia and Egypt, which offset declines in other markets. Net revenues grew by 6.5% (7.8% organically), driven by another impressive quarter of 8.9% pricing, partly offset by geographic mix. This quarter also benefited from the favorable restructuring of distribution terms in certain markets, which is not expected to recur at the same level in future quarters. Gross profit grew by 8.6% (9.8% organically). Our cigarette category volume share stood at 25.9% (up by 0.4pp) despite adverse market mix. Marlboro continued to gain share (up by 0.5pp) reaching a record category share of 11.4%.
- 2 -
U.S. Segment
In the U.S., total ZYN shipments grew by 4.2% to 3.2 billion pouches, despite challenging comparisons against a special promotional campaign last year and supported by the ongoing launches of ZYN ULTRA, new flagship dry flavors, 1.5mg and 8mg flagship variants. These portfolio extensions enable ZYN to cover a broader range of consumer preferences and compete in the most dynamic growing segments of the category. Segment net revenues grew by 22.7% and gross profit by 24.2% (23.8% organically), driven by volume growth combined with favorable pricing comparisons due to prior year promotional activities. Operating companies income decreased by 3.3% (increased by 1.5% organically), including a significant increase in commercial investments to support the expansion of our ZYN portfolio, which increased its category share by over 100 basis points between June and September, as estimated by Nielsen.
As part of our previously announced plans to accelerate investments in the second half, and with distribution of the extended range of ZYN products continuing to progress, we plan to further increase investments to support the brand in the fourth quarter. This reflects a ramp-up in consumer communications, notably an expansion of the 'When It Clicks' brand campaign, and the transition of the majority of the ZYN flagship portfolio to 20-pouch cans (from 15-pouch cans today), including associated transitional support programs. The change to 20-pouch cans is designed to align the value proposition across the portfolio and optimize ZYN's price premium to support future growth in the dynamic U.S. nicotine pouch category.
On August 21, the FDA granted PMTA authorization to 11 variants of ZYN ULTRA, our higher-nicotine moist offering. ZYN now has PMTA authorization of 31 variants in total, more than any other nicotine brand on the market. This, combined with the MRTP authorization of 20 ZYN flagship variants on June 30, underlines the robustness of the science behind our products and their potential to reduce the harm caused by smoking.
Dividend: Increased regular quarterly dividend by 8.8% to $1.60 per share, or an annualized $6.40 per share.
- 3 -
Third-Quarter 2026 Performance Highlights | ||
Shipment Volume (billion equivalent units) | PMI | International Smoke-Free | International Combustibles | U.S. | ||||||||||||||||||||||||||||||||||
| Q3 | vs. PY | Q3 | vs. PY | Q3 | vs. PY | Q3 | vs. PY | |||||||||||||||||||||||||||||||
| Total | 206.2 | 0.6% | 44.5 | 2.7% | 158.0 | —% | 3.7 | 2.3% | ||||||||||||||||||||||||||||||
| Cigarettes | 158.0 | —% | 158.0 | —% | ||||||||||||||||||||||||||||||||||
| SFP | 48.2 | 2.7% | 44.5 | 2.7% | 3.7 | 2.3% | ||||||||||||||||||||||||||||||||
| HTU | 41.5 | 1.5% | 41.5 | 1.5% | – | (14.3)% | ||||||||||||||||||||||||||||||||
| Oral SFP | 5.3 | 1.8% | 1.6 | 0.5% | 3.7 | 2.3% | ||||||||||||||||||||||||||||||||
| E-Vapor | 1.4 | 61.6% | 1.4 | 61.6% | ||||||||||||||||||||||||||||||||||
| "-" indicates zero volumes or less than 50 million units | ||||||||||||||||||||||||||||||||||||||
| PMI | International Smoke-Free | International Combustibles | U.S. | |||||||||||||||||||||||
Net Revenues ($ bn) | $11.4 | $3.9 | $6.7 | $0.8 | ||||||||||||||||||||||
reported vs. Q3 2025 | 5.5% | 0.7% | 6.5% | 22.7% | ||||||||||||||||||||||
organic vs. Q3 2025 | 7.1% | 3.4% | 7.8% | 22.7% | ||||||||||||||||||||||
Gross Profit ($ bn) | $7.9 | $2.7 | $4.6 | $0.5 | ||||||||||||||||||||||
reported vs. Q3 2025 | 6.7% | 0.8% | 8.6% | 24.2% | ||||||||||||||||||||||
organic vs. Q3 2025 | 8.3% | 3.3% | 9.8% | 23.8% | ||||||||||||||||||||||
OCI ($ bn) | $4.9 | $4.9 | $— | |||||||||||||||||||||||
reported vs. Q3 2025 | 13.0% | 12.9% | (3.3)% | |||||||||||||||||||||||
organic vs. Q3 2025 | 10.5% | 10.8% | 1.5% | |||||||||||||||||||||||
Operating Income ($ bn) | $4.9 | |||||||||||||||||||||||||
reported vs. Q3 2025 | 14.1% | |||||||||||||||||||||||||
organic vs. Q3 2025 | 10.5% | |||||||||||||||||||||||||
| Note: Sums might not foot to total due to rounding. | ||||||||||||||||||||||||||
| 2026 | 2025 | Change | |||||||||||||||
| Reported Diluted EPS | $2.12 | $2.23 | (4.9)% | ||||||||||||||
| Amortization of intangibles | 0.13 | 0.13 | |||||||||||||||
| Fair value adjustment for equity security investments | 0.06 | (0.07) | |||||||||||||||
| Income tax impact associated with Swedish Match AB financing | 0.01 | – | |||||||||||||||
| Dutch pension plan buy-out loss | 0.04 | – | |||||||||||||||
| Germany excise tax classification litigation charge | – | 0.10 | |||||||||||||||
| RBH (Canada) Plan Implementation, including dividend income, net | – | (0.10) | |||||||||||||||
| Impairment of Wellness business related equity investment | – | 0.09 | |||||||||||||||
| Tax items | – | (0.14) | |||||||||||||||
| Adjusted Diluted EPS | $2.36 | $2.24 | 5.4% | ||||||||||||||
| Less: Currency | (0.01) | ||||||||||||||||
| Adjusted Diluted EPS, excluding Currency | $2.37 | $2.24 | 5.8% | ||||||||||||||
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First Nine-Months 2026 Performance Highlights | ||
Shipment Volume (billion equivalent units) | PMI | International Smoke-Free | International Combustibles | U.S. | ||||||||||||||||||||||||||||||||||
| YTD | vs. PY | YTD | vs. PY | YTD | vs. PY | YTD | vs. PY | |||||||||||||||||||||||||||||||
| Total | 595.6 | 0.5% | 133.3 | 7.4% | 452.2 | (1.2)% | 10.1 | (5.8)% | ||||||||||||||||||||||||||||||
| Cigarettes | 452.2 | (1.2)% | 452.2 | (1.2)% | ||||||||||||||||||||||||||||||||||
| SFP | 143.4 | 6.4% | 133.3 | 7.4% | 10.1 | (5.8)% | ||||||||||||||||||||||||||||||||
| HTU | 124.5 | 6.7% | 124.5 | 6.7% | – | +100% | ||||||||||||||||||||||||||||||||
| Oral SFP | 14.9 | (5.3)% | 4.8 | (4.0)% | 10.0 | (5.8)% | ||||||||||||||||||||||||||||||||
| E-Vapor | 4.0 | 68.1% | 4.0 | 68.1% | ||||||||||||||||||||||||||||||||||
| "-" indicates zero volumes or less than 50 million units | ||||||||||||||||||||||||||||||||||||||
| PMI | International Smoke-Free | International Combustibles | U.S. | |||||||||||||||||||||||
Net Revenues ($ bn) | $32.8 | $11.6 | $18.9 | $2.3 | ||||||||||||||||||||||
reported vs. YTD 2025 | 8.2% | 12.3% | 7.7% | (5.2)% | ||||||||||||||||||||||
organic vs. YTD 2025 | 5.9% | 9.9% | 5.2% | (5.5)% | ||||||||||||||||||||||
Gross Profit ($ bn) | $22.4 | $8.1 | $12.8 | $1.5 | ||||||||||||||||||||||
reported vs. YTD 2025 | 9.4% | 14.3% | 9.9% | (14.8)% | ||||||||||||||||||||||
organic vs. YTD 2025 | 7.1% | 11.8% | 7.4% | (14.6)% | ||||||||||||||||||||||
OCI ($ bn) | $13.6 | $13.7 | $(0.1) | |||||||||||||||||||||||
reported vs. YTD 2025 | 13.4% | 17.6% | -(100)% | |||||||||||||||||||||||
organic vs. YTD 2025 | 7.6% | 11.4% | (41.1)% | |||||||||||||||||||||||
Operating Income ($ bn) | $13.3 | |||||||||||||||||||||||||
reported vs. YTD 2025 | 15.4% | |||||||||||||||||||||||||
organic vs. YTD 2025 | 7.7% | |||||||||||||||||||||||||
| Note: Sums might not foot to total due to rounding. | ||||||||||||||||||||||||||
| 2026 | 2025 | Change | |||||||||||||||
| Reported Diluted EPS | $5.48 | $5.89 | (7.0)% | ||||||||||||||
| Amortization of intangibles | 0.37 | 0.37 | |||||||||||||||
| Fair value adjustment for equity security investments | 0.22 | (0.33) | |||||||||||||||
| Restructuring charges | 0.02 | 0.13 | |||||||||||||||
| Income tax impact associated with Swedish Match AB financing | 0.07 | (0.24) | |||||||||||||||
| Impairment related to the RBH equity investment | 0.33 | – | |||||||||||||||
| Egypt sales tax settlement adjustment | (0.01) | – | |||||||||||||||
| Dutch pension plan buy-out loss | 0.04 | – | |||||||||||||||
| Impairment of goodwill | – | 0.03 | |||||||||||||||
| Germany excise tax classification litigation charge | – | 0.10 | |||||||||||||||
| RBH (Canada) Plan Implementation, including dividend income, net | – | (0.10) | |||||||||||||||
| Impairment of Wellness business related equity investment | – | 0.09 | |||||||||||||||
| Tax items | – | (0.11) | |||||||||||||||
| Adjusted Diluted EPS | $6.52 | $5.83 | 11.8% | ||||||||||||||
| Less: Currency | 0.20 | ||||||||||||||||
| Adjusted Diluted EPS, excluding Currency | $6.32 | $5.83 | 8.4% | ||||||||||||||
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| Impact of Geopolitical Conflicts | ||
While the impact of the ongoing Middle East conflict on the group remains manageable, it has had an increasing effect on our business, with energy-related inflation driving incremental cost pressures in the third quarter. In our full-year forecast, we assume the observed rise in energy-related input prices to have a slightly higher impact in the fourth quarter, as a larger proportion of input price increases take effect. The long-term situation remains unpredictable, and it is difficult to assess the broader implications for consumers or the global cost environment.
In addition, the evolution of the situation in Ukraine has caused certain disruptions to our business this year, including the impact of strikes on our supply chain and logistics infrastructure in certain locations. We expect this disruption to have an impact on our operating income this year.
- 6 -
| 2026 Full-Year Forecast | ||
| 2026 Forecast | 2025 | Growth | ||||||||||||||||||||||||||||||
| Reported Diluted EPS | $7.11 | - | $7.26 | $ 7.26 | ||||||||||||||||||||||||||||
| Adjustments | ||||||||||||||||||||||||||||||||
| Amortization of intangibles | 0.50 | 0.50 | ||||||||||||||||||||||||||||||
| Fair value adjustment for equity security investments | 0.22 | (0.18) | ||||||||||||||||||||||||||||||
| Restructuring charges | 0.03 | 0.14 | ||||||||||||||||||||||||||||||
| Income tax impact associated with Swedish Match AB financing | 0.07 | (0.25) | ||||||||||||||||||||||||||||||
| Impairment related to the RBH equity investment | 0.33 | — | ||||||||||||||||||||||||||||||
| Egypt sales tax settlement adjustment | (0.01) | — | ||||||||||||||||||||||||||||||
| Dutch pension plan buy-out loss | 0.04 | — | ||||||||||||||||||||||||||||||
Other 2025 adjustments(1) | — | 0.07 | ||||||||||||||||||||||||||||||
| Total Adjustments | 1.18 | 0.28 | ||||||||||||||||||||||||||||||
| Adjusted Diluted EPS | $8.29 | - | $8.44 | $ 7.54 | 9.9% | - | 11.9% | |||||||||||||||||||||||||
| Less: Currency | 0.18 | |||||||||||||||||||||||||||||||
| Adjusted Diluted EPS, excluding currency | $8.11 | - | $8.26 | $ 7.54 | 7.5% | - | 9.5% | |||||||||||||||||||||||||
| (1) Includes: $0.10 Germany excise tax classification litigation charge; ($0.10) RBH (Canada) Plan Implementation, including dividend income, net; $0.09 Impairment of Wellness business related equity investment; $0.06 Loss on expected sale of consumer accessories and other businesses; $0.03 Impairment of goodwill; ($0.11) Tax items | ||||||||||||||||||||||||||||||||
Reported diluted EPS is forecast to be in a range of $7.11 to $7.26, at prevailing exchange rates. Excluding a total 2026 adjustment of $1.18 per share, this forecast represents a projected increase of 9.9% to 11.9% versus adjusted diluted EPS of $7.54 in 2025. This includes a favorable currency impact of $0.18, at prevailing exchange rates (previously $0.24). Excluding currency, this forecast represents a projected increase of 7.5% to 9.5% versus adjusted diluted EPS of $7.54 in 2025, as outlined in the above table.
2026 Full-Year Forecast Assumptions
•Growing (previously broadly stable to slightly growing) total PMI cigarette and SFP shipment volume, with high single-digit SFP shipment growth, led by high single-digit SFP adjusted IMS growth, and a cigarette shipment volume decline at a similar level to the year-to-date trend (previously around 2% to 3%);
•Net revenue growth of 5% to 7% on an organic basis; with a greater likelihood to be in the middle or upper-half of the range, supported by a fourth-quarter reacceleration in international smoke-free;
•Organic operating income growth of 7% to 9%; with a greater likelihood to be in the middle or lower-half of the range, with a corresponding flow through to our EPS forecast range, given the cost impacts of ongoing geopolitical tensions and the previously communicated step-up in U.S. growth investments;
•Full-year amortization of acquired intangibles of $0.50 per share;
•Broadly stable net financing costs;
•An effective tax rate, excluding discrete tax events, of around 21.5%;
•Operating cash flow around $13.5 billion at prevailing exchange rates, subject to year-end working capital requirements;
•Capital expenditures of $1.4 to $1.6 billion, predominantly supporting the smoke-free business;
•Further net debt to adjusted EBITDA ratio improvement as we target a ratio of close to 2.0x by the end of 2026, at prevailing exchange rates; and
•No share repurchases.
Factors described in the Forward-Looking and Cautionary Statements section of this release represent continuing risks to these projections.
- 7 -
Third-Quarter 2026 Operating Review | ||
Net Revenues (in millions) | PMI | International Smoke-Free | International Combustibles | U.S. | ||||||||||||||||||||||
| 2025 | $10,845 | $3,839 | $6,316 | $689 | ||||||||||||||||||||||
| Price | 739 | 21 | 565 | 153 | ||||||||||||||||||||||
| Volume/Mix/Other | 36 | 108 | (75) | 4 | ||||||||||||||||||||||
| Acquisitions & Divestitures | (27) | (27) | — | — | ||||||||||||||||||||||
| Currency | (155) | (74) | (81) | (1) | ||||||||||||||||||||||
| 2026 | $11,438 | $3,867 | $6,725 | $845 | ||||||||||||||||||||||
vs. Q3 2025 | 5.5% | 0.7% | 6.5% | 22.7% | ||||||||||||||||||||||
| Organic growth | 7.1% | 3.4% | 7.8% | 22.7% | ||||||||||||||||||||||
Gross Profit (in millions) | PMI | International Smoke-Free | International Combustibles | U.S. | ||||||||||||||||||||||
| 2025 | $7,361 | $2,683 | $4,244 | $434 | ||||||||||||||||||||||
| Price | 739 | 21 | 565 | 153 | ||||||||||||||||||||||
| Volume/Mix/Other | (23) | 87 | (99) | (9) | ||||||||||||||||||||||
| Cost | (104) | (18) | (48) | (39) | ||||||||||||||||||||||
| Acquisitions & Divestitures | (7) | (7) | — | — | ||||||||||||||||||||||
| Currency | (112) | (60) | (52) | — | ||||||||||||||||||||||
| 2026 | $7,854 | $2,705 | $4,610 | $539 | ||||||||||||||||||||||
vs. Q3 2025 | 6.7% | 0.8% | 8.6% | 24.2% | ||||||||||||||||||||||
Adjustments* | 6 | 1 | — | 5 | ||||||||||||||||||||||
| 2026 Adjusted Gross Profit | $7,860 | $2,705 | $4,610 | $544 | ||||||||||||||||||||||
vs. Q3 2025 | 6.7% | 0.8% | 8.6% | 23.9% | ||||||||||||||||||||||
| Organic growth | 8.3% | 3.3% | 9.8% | 23.8% | ||||||||||||||||||||||
| 2026 Adj. Gross Profit Margin | 68.7% | 70.0% | 68.5% | 64.4% | ||||||||||||||||||||||
vs. Q3 2025 | 0.8pp | 0.1pp | 1.3pp | 0.7pp | ||||||||||||||||||||||
| Organic growth | 0.8pp | —pp | 1.3pp | 0.6pp | ||||||||||||||||||||||
| (*) For a list of adjusting items refer to the “Non-GAAP Measures, Glossary and Explanatory Notes” section of this release, in Exhibit 99.2 to the company's Form 8-K dated October 21, 2026. | ||||||||||||||||||||||||||
PMI (in millions) | Variance Favorable / (Unfavorable) | |||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | Change | Total | Price | Volume / Mix / Other | Cost | Acq. / Divest. | Currency | ||||||||||||||||||||||||||||||
| Net Revenues | 11,438 | 10,845 | 5.5% | 593 | 739 | 36 | – | (27) | (155) | |||||||||||||||||||||||||||||
Cost of Sales(1) | (3,584) | (3,484) | (2.9)% | (100) | – | (59) | (104) | 20 | 43 | |||||||||||||||||||||||||||||
| Gross Profit | 7,854 | 7,361 | 6.7% | 493 | 739 | (23) | (104) | (7) | (112) | |||||||||||||||||||||||||||||
Marketing, Administration and Research Costs(2) | (2,993) | (3,058) | 2.1% | 65 | – | – | 40 | 4 | 21 | |||||||||||||||||||||||||||||
| Corporate Expenses & Other | 5 | (40) | +100% | 45 | – | – | (7) | – | 52 | |||||||||||||||||||||||||||||
| Operating Income | 4,866 | 4,263 | 14.1% | 603 | 739 | (23) | (71) | (3) | (39) | |||||||||||||||||||||||||||||
| Adjustments* | (251) | (407) | 38.3% | 156 | – | – | 156 | – | – | |||||||||||||||||||||||||||||
| Adj. Operating Income | 5,117 | 4,670 | 9.6% | 447 | 739 | (23) | (227) | (3) | (39) | |||||||||||||||||||||||||||||
| Adj. OI Margin | 44.7 | % | 43.1 | % | 1.6pp | |||||||||||||||||||||||||||||||||
(1) Includes $6 million in 2026 and $5 million in 2025 related to the adjusting items shown below Operating Income | ||||||||||||||||||||||||||||||||||||||
(2) Includes $245 million in 2026 and $402 million in 2025 related to the adjusting items shown below Operating Income | ||||||||||||||||||||||||||||||||||||||
| (*) For a list of adjusting items refer to the “Non-GAAP Measures, Glossary and Explanatory Notes” section of this release, in Exhibit 99.2 to the company's Form 8-K dated October 21, 2026. | ||||||||||||||||||||||||||||||||||||||
Note: Sums might not foot to total due to rounding.
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| Total PMI | ||
•Estimated industry volume (excluding China and the U.S.) for cigarettes and HTUs was broadly stable, decreasing by 0.1%.
•Net revenues increased by 7.1% organically, mainly reflecting: a favorable pricing variance driven by international combustibles and the U.S. segment.
•Operating income increased by 10.5% on an organic basis, largely reflecting the same factors as for net revenues.
| International Smoke-Free Segment | ||
•Shipment volume grew by 2.7%, with broad-based growth across markets, notably Taiwan, Global Travel Retail, Greece, Germany, and Bulgaria, notwithstanding a challenging HTU comparison due to phasing of shipments between periods.
•Net revenues increased by 3.4% on an organic basis, reflecting: a favorable volume/mix driven by higher HTU and e-vapor volumes and a favorable pricing variance due to HTUs.
•Gross profit increased by 3.3% organically mainly due to the same factors as for net revenues.
| International Combustibles Segment | ||
•Shipment volumes were broadly flat with notable increases in Turkey, Indonesia, and Egypt, offsetting declines in markets such as Russia, Poland and Japan.
•Net revenues increased by 7.8% on an organic basis, reflecting: a favorable pricing variance, the restructuring of distribution terms in certain markets, and partially offset by unfavorable geographic mix.
•Gross profit increased by 9.8% organically due to the same factors as for net revenues, slightly offset by higher costs due to increases in energy-related input prices.
| U.S. Segment | ||
•Net revenues increased by 22.7%, primarily reflecting: growing ZYN shipments of 4.2%, and a favorable price variance against prior year promotions, supported by growth in the Wellness business and cigars.
•Gross profit increased by 23.8% on an organic basis reflecting the same factors as for net revenues, partly offset by higher manufacturing costs linked to the expansion of our footprint.
•Adjusted OCI increased by 1.5% organically, to $171 million, reflecting the same factors as for adjusted gross profit and the start of increased marketing investments to support the expanded ZYN portfolio.
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First Nine-Months 2026 Operating Review | ||
Net Revenues (in millions) | PMI | International Smoke-Free | International Combustibles | U.S. | ||||||||||||||||||||||
| 2025 | $30,286 | $10,310 | $17,525 | $2,451 | ||||||||||||||||||||||
| Price | 1,889 | 195 | 1,607 | 88 | ||||||||||||||||||||||
| Volume/Mix/Other | (89) | 823 | (689) | (222) | ||||||||||||||||||||||
| Acquisitions & Divestitures | (44) | (44) | — | — | ||||||||||||||||||||||
| Currency | 734 | 297 | 429 | 8 | ||||||||||||||||||||||
| 2026 | $32,776 | $11,580 | $18,872 | $2,324 | ||||||||||||||||||||||
| vs. YTD 2025 | 8.2% | 12.3% | 7.7% | (5.2)% | ||||||||||||||||||||||
| Organic growth | 5.9% | 9.9% | 5.2% | (5.5)% | ||||||||||||||||||||||
Gross Profit (in millions) | PMI | International Smoke-Free | International Combustibles | U.S. | ||||||||||||||||||||||
| 2025 | $20,497 | $7,088 | $11,679 | $1,729 | ||||||||||||||||||||||
| Price | 1,889 | 195 | 1,607 | 88 | ||||||||||||||||||||||
| Volume/Mix/Other | (261) | 575 | (621) | (214) | ||||||||||||||||||||||
| Cost | (179) | 65 | (116) | (128) | ||||||||||||||||||||||
| Acquisitions & Divestitures | (11) | (11) | — | — | ||||||||||||||||||||||
| Currency | 483 | 194 | 290 | (1) | ||||||||||||||||||||||
| 2026 | $22,418 | $8,105 | $12,839 | $1,473 | ||||||||||||||||||||||
| vs. YTD 2025 | 9.4% | 14.3% | 9.9% | (14.8)% | ||||||||||||||||||||||
| Adjustments* | 18 | 2 | — | 16 | ||||||||||||||||||||||
| 2026 Adjusted Gross Profit | $22,436 | $8,107 | $12,839 | $1,489 | ||||||||||||||||||||||
| vs. YTD 2025 | 9.4% | 14.3% | 9.9% | (14.6)% | ||||||||||||||||||||||
| Organic growth | 7.1% | 11.8% | 7.4% | (14.6)% | ||||||||||||||||||||||
| 2026 Adj. Gross Profit Margin | 68.5% | 70.0% | 68.0% | 64.1% | ||||||||||||||||||||||
| vs. YTD 2025 | 0.8pp | 1.2pp | 1.4pp | (7.1)pp | ||||||||||||||||||||||
| Organic growth | 0.8pp | 1.2pp | 1.4pp | (6.9)pp | ||||||||||||||||||||||
| (*) For a list of adjusting items refer to the “Non-GAAP Measures, Glossary and Explanatory Notes” section of this release, in Exhibit 99.2 to the company's Form 8-K dated October 21, 2026. | ||||||||||||||||||||||||||
PMI (in millions) | Variance Favorable / (Unfavorable) | |||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | Change | Total | Price | Volume / Mix / Other | Cost | Acq. / Divest. | Currency | ||||||||||||||||||||||||||||||
| Net Revenues | 32,776 | 30,286 | 8.2% | 2,490 | 1,889 | (89) | – | (44) | 734 | |||||||||||||||||||||||||||||
Cost of Sales(1) | (10,358) | (9,789) | (5.8)% | (569) | – | (172) | (179) | 33 | (251) | |||||||||||||||||||||||||||||
| Gross Profit | 22,418 | 20,497 | 9.4% | 1,921 | 1,889 | (261) | (179) | (11) | 483 | |||||||||||||||||||||||||||||
Marketing, Administration and Research Costs(2) | (8,831) | (8,474) | (4.2)% | (357) | – | – | (76) | 6 | (287) | |||||||||||||||||||||||||||||
| Impairment of Goodwill | — | (41) | +100% | 41 | – | – | 41 | – | – | |||||||||||||||||||||||||||||
| Corporate Expenses & Other | (298) | (463) | 35.6% | 165 | – | – | (18) | – | 183 | |||||||||||||||||||||||||||||
| Operating Income | 13,289 | 11,519 | 15.4% | 1,770 | 1,889 | (261) | (232) | (5) | 379 | |||||||||||||||||||||||||||||
| Adjustments* | (769) | (1,187) | 35.2% | 418 | – | – | 418 | – | – | |||||||||||||||||||||||||||||
| Adj. Operating Income | 14,058 | 12,706 | 10.6% | 1,352 | 1,889 | (261) | (650) | (5) | 379 | |||||||||||||||||||||||||||||
| Adj. OI Margin | 42.9 | % | 42.0 | % | 0.9pp | |||||||||||||||||||||||||||||||||
(1) Includes $18 million in 2026 and $16 million in 2025 related to the adjusting items shown below Operating Income | ||||||||||||||||||||||||||||||||||||||
(2) Includes $751 million in 2026 and $1,130 million in 2025 related to the adjusting items shown below Operating Income | ||||||||||||||||||||||||||||||||||||||
| (*) For a list of adjusting items refer to the “Non-GAAP Measures, Glossary and Explanatory Notes” section of this release, in Exhibit 99.2 to the company's Form 8-K dated October 21, 2026. | ||||||||||||||||||||||||||||||||||||||
Note: Sums might not foot due to rounding.
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| Total PMI | ||
•Estimated industry volume (excluding China and the U.S.) for cigarettes and HTUs declined by 0.4%.
•Net revenues increased by 5.9% organically, mainly reflecting: a favorable pricing variance mainly driven by international combustibles; higher international smoke-free volumes; partly offset by unfavorable volume/mix, mainly driven by lower international combustibles and U.S. volumes in the first quarter.
•Operating income increased by 7.7% on an organic basis, reflecting the same factors as for net revenues, partially offset by higher marketing, administration and research costs.
International Smoke-Free Segment | ||
•Shipment volume grew by 7.4%, notably due to Taiwan, Greece, Italy, and Global Travel Retail.
•Net revenues increased by 9.9% on an organic basis, reflecting: a favorable volume/mix driven by higher HTU and e-vapor volumes and a favorable pricing variance due to higher HTU pricing.
•Gross profit increased by 11.8% organically mainly due to the same factors as for net revenues, supported by favorable manufacturing efficiencies.
International Combustibles Segment | ||
•Shipment volume declined by 1.2% with notable decreases in Russia, Mexico, and Germany, partly offset by Turkey and Egypt.
•Net revenues increased by 5.2% on an organic basis, reflecting: a favorable pricing variance and the previously mentioned restructuring of distribution terms in certain markets, partially offset by unfavorable volume/mix.
•Gross profit increased by 7.4% organically due to the same factors as for net revenues, and slightly offset by increases in energy-related input prices.
| U.S. Segment | ||
•Net revenues decreased by 5.5% organically, reflecting: unfavorable dynamics in the first quarter with ZYN volumes impacted by distributor and trade inventory movements, slightly offset by favorable price comparisons against higher promotional activities in the third quarter last year.
•Gross profit decreased by 14.6% on an organic basis reflecting the same factors as for net revenues and higher manufacturing costs.
•Adjusted OCI decreased by 41.1% organically, to $550 million, reflecting the same factors as for gross profit and increased investments in marketing, administration and research costs.
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| Conference Call | ||
A conference call hosted by Massimo Andolina, Group Chief Financial Officer, will be webcast at 9:00 a.m., Eastern Time, on October 21, 2026. The webcast can be accessed here. Further market data will be provided in an appendix to the webcast presentation.
| Investor Relations: | Media: | ||||
| InvestorRelations@pmi.com | Corey.Henry@pmi.com | ||||
| Stamford, CT: +1 (203) 905 2413 | Stamford, CT: +1 (203) 905 2410 | ||||
| Lausanne: +41 582 424 500 | |||||
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Philip Morris International: A Global Smoke-Free Champion
Philip Morris International is a leading international consumer goods company, actively delivering a smoke-free future and evolving its portfolio for the long term to include products outside of the tobacco and nicotine sector. The company’s current product portfolio primarily consists of cigarettes and smoke-free products, including heat-not-burn, nicotine pouch and e-vapor products. Our smoke-free products are available for sale in 110 markets as of September 30, 2026. As of December 31, 2025 PMI estimates they were used by over 43 million legal-age consumers around the world, many of whom have moved away from cigarettes or significantly reduced their consumption. The smoke-free business accounted for more than 40% of PMI’s third-quarter 2026 total net revenues. Since 2008, PMI has invested over $16 billion to develop, scientifically substantiate and commercialize innovative smoke-free products for legal-age adults who would otherwise smoke or use other nicotine-containing consumer products, with the goal of completely ending the sale of cigarettes. This includes the building of world-class scientific assessment capabilities, notably in the areas of pre-clinical systems toxicology, clinical and behavioral research, as well as post-market studies. Following a robust science-based review, the U.S. Food and Drug Administration has authorized the marketing of Swedish Match’s General snus and ZYN nicotine pouches and versions of PMI’s IQOS devices and consumables - the first-ever such authorizations in their respective categories. Versions of IQOS devices and consumables, General snus and 20 ZYN nicotine pouch variants also obtained the first-ever Modified Risk Tobacco Product authorizations from the FDA. With a strong foundation and significant expertise in life sciences, PMI has a long-term ambition to expand into wellness areas. References to “PMI”, “we”, “our” and “us” mean Philip Morris International Inc., and its subsidiaries. For more information, please visit www.pmi.com and www.pmiscience.com.
Forward-Looking and Cautionary Statements
This release contains projections of future results and goals and other forward-looking statements, including statements regarding expected financial or operational performance; capital allocation plans; investment strategies; regulatory outcomes; market expectations; business plans and strategies. Achievement of future results is subject to risks, uncertainties and inaccurate assumptions. In the event that risks or uncertainties materialize, or underlying assumptions prove inaccurate, actual results could vary materially from those contained in such forward-looking statements. Pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, PMI is identifying important factors that, individually or in the aggregate, could cause actual results and outcomes to differ materially from those contained in any forward-looking statements made by PMI.
PMI's business risks include: marketing and regulatory restrictions that could reduce our competitiveness, disrupt our SFP commercialization efforts, eliminate our ability to communicate with adult consumers, or ban certain of our products in certain markets or countries; excise tax increases and discriminatory tax structures; health concerns relating to the use of tobacco and other nicotine-containing products; litigation related to tobacco and/or nicotine products and intellectual property rights; intense competition; inability to anticipate changes in adult consumer preferences; use and reliance on third-parties; the adverse effects of global and individual country economic, regulatory and political developments, natural disasters and conflicts; geopolitical instability; the impact and consequences of Russia's invasion of Ukraine; changes in legal-age adult smoker behavior; continued decline of tax-paid cigarettes; lost revenues as a result of counterfeiting, contraband and cross-border purchases; governmental investigations; unfavorable currency exchange rates and currency devaluations, sustained periods of elevated inflation, and limitations on the ability to repatriate funds; adverse changes in applicable corporate tax laws; disruptions in the credit markets or changes to its credit ratings; recent and
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potential future tariffs imposed by the U.S. and other countries; adverse changes in the cost, availability, and quality of tobacco and other agricultural products and raw materials, as well as product components for its electronic devices; and the integrity of its information systems and effectiveness of its data privacy policies. PMI's future profitability may also be adversely affected should it be unsuccessful, in key markets or systemically, in its efforts to introduce, commercialize, and grow smoke-free products or if regulation or taxation do not differentiate between such products and cigarettes; if it is unable to successfully introduce new products, and promote brand equity; if there are prolonged disruptions of facilities used to produce its products; if it is unable to enter new markets or improve its margins through increased prices and productivity gains; if other market participants are more successful in their SFP commercialization efforts; if it is unable to attract and retain the best global talent; or if it is unable to successfully integrate and realize the expected benefits from recent transactions and acquisitions. Future results are also subject to the lower predictability of our smoke-free products performance.
PMI is further subject to other risks detailed from time to time in its publicly filed documents, including PMI's Annual Report on Form 10-K for the fourth quarter and year ended December 31, 2025, and the Quarterly Report on Form 10-Q for the third quarter ended September 30, 2026, which will be filed in the coming days. PMI cautions that the foregoing list of important factors is not a complete discussion of all potential risks and uncertainties. PMI does not undertake to update any forward-looking statement that it may make from time to time, except in the normal course of its public disclosure obligations.
Non-GAAP Measures, Glossary and Explanatory Notes
Reconciliations of non-GAAP measures in this release to the most directly comparable U.S. GAAP measures can be found in Exhibit 99.2 to the Form 8-K dated October 21, 2026, and here. A glossary of key terms, definitions and explanatory notes is available in the aforementioned Exhibit 99.2 and on the same webpage, where additional financial schedules, as well as adjustments and other calculations have also been made available.
Management reviews net revenues, gross profit, operating companies income, operating income, operating cash flow and earnings per share, or "EPS," on an adjusted basis, which may exclude the impact of currency and other items such as acquisitions, divestitures, restructuring costs, tax items and other adjusting items. Additionally, starting in 2022 and on a comparative basis, for these measures other than net revenues and operating cash flow, PMI includes adjustments to add back amortization expense on acquisition related intangible assets that are recorded as part of purchase accounting and contribute to PMI’s revenue generation, as well as impairment of intangible assets, if any. While amortization expense on acquisition related intangible assets is excluded in these adjusted measures, the net revenues generated from these acquired intangible assets are included in the company's adjusted measures, unless otherwise stated. Currency-neutral and organic growth rates reflect the way management views underlying performance for these measures. PMI believes that such measures provide useful insight into underlying business trends and results. Management reviews these measures because they exclude changes in currency exchange rates and other factors that may distort underlying business trends, thereby improving the comparability of PMI’s business performance between reporting periods. Furthermore, PMI uses several of these measures in its management compensation program to promote internal fairness and a disciplined assessment of performance against company targets. PMI discloses these measures to enable investors to view the business through the eyes of management.
Non-GAAP measures used in this release should neither be considered in isolation nor as a substitute for the financial measures prepared in accordance with U.S. GAAP.
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Exhibit 99.2
Philip Morris International Inc.
Glossary of Key Terms, Definitions
and Explanatory Notes; and
Select Financial Information and Reconciliations of
Non-GAAP Financial Measures
2026 Third-Quarter Results
October 21, 2026
1
Glossary of Key Terms, Definitions
and Explanatory Notes
2
General
•"PMI" refers to Philip Morris International Inc. and its subsidiaries. Trademarks and service marks that are the registered property of, or licensed by, the subsidiaries of PMI, are italicized.
•With our smoke-free business now operating at scale across our regions, including substantial growth from our U.S. business, PMI has implemented an evolved organizational model with two primary business units: International and U.S. This change was implemented effective January 1, 2026, and as a result PMI realigned its reportable segments accordingly. The four geographic segments have been replaced with three new reportable segments: International Smoke-Free, International Combustibles, and U.S. (including our wellness business unit, Aspeya).
•Comparisons are made to the same prior-year period unless otherwise stated.
•References to total industry and PMI market share performance reflect cigarettes and heated tobacco units, unless otherwise stated.
•Illicit products are products resulting from any practice or conduct prohibited by law relating to the production, shipment, receipt, possession, distribution, sale, or purchase of goods, including any practice or conduct intended to facilitate such activity.
•Total industry volume, PMI in-market sales volume, and PMI market share for the total international market and Japanese domestic market, include the cigarillo category in Japan.
•References to total international market, defined as worldwide cigarette and heated tobacco unit volume excluding the U.S., total industry (or total market) and market shares are PMI estimates for tax-paid and Global Travel Retail products based on data from a number of internal and external sources and may, in defined instances, exclude the People's Republic of China. Past reported periods may be updated to ensure comparability and to incorporate the most current information for industry and market share reporting.
•"Combustible tobacco products" is the term PMI uses to refer to cigarettes and other tobacco products that are combusted.
•In-market sales or "IMS" is defined as sales to the trade channels, which serve the end legal age nicotine users. Depending on the market and distribution model, IMS may represent an estimate. Consequently, past reported periods may be updated to ensure comparability and to incorporate the most current information.
•From time to time, PMI’s shipment volumes and IMS are subject to the impact of distributor inventory movements (or wholesaler inventory movements in certain markets where PMI does not sell to distributors), and estimated total industry/market volumes are subject to the impact of inventory movements in various trade channels that include estimated trade inventory movements of PMI’s competitors arising from market-specific factors that significantly distort reported volume disclosures. Such factors may include changes to the manufacturing supply chain, shipment methods, consumer demand, timing of excise tax increases or other influences that may affect the timing of sales to customers. In such instances, in addition to reviewing PMI shipment volumes, IMS, certain estimated total industry/market volumes and estimated market share on a reported basis, management reviews these measures on an adjusted basis that excludes the impact of distributor and/or estimated trade inventory movements. Management also believes that disclosing PMI's shipment volumes, IMS, estimated total industry/market volumes and estimated market share in such circumstances on a basis that excludes the impact of distributor and/or estimated trade inventory movements, improves the comparability of performance and trends for these measures over different reporting periods.
•Adjusted in-market sales or "adjusted IMS" is defined as in-market sales excluding distributor and/or trade inventory movements, which are estimated using a number of internal and external sources. Past reported periods may be updated to ensure comparability and to incorporate the most current information.
•Consumer offtake or offtake is the term PMI uses to refer to an approximation of purchases by consumers based on various market specific sources (e.g., Nielsen).
•"Total shipment volume" is defined as the combined total of cigarette, heated tobacco, oral smoke-free products (excluding snuff, snuff leaf and U.S. chew) and
e-vapor shipment volume in equivalent units, unless otherwise stated.
e-vapor shipment volume in equivalent units, unless otherwise stated.
3
•Following the deconsolidation of PMI's Canadian subsidiary, Rothmans, Benson & Hedges, Inc. (RBH) on March 22, 2019, PMI continues to report the volume and corresponding royalty revenues of brands sold by RBH for which other PMI subsidiaries are the trademark owner. These include Next, Parliament, TEREA and VEEV. The volume and corresponding royalty revenues for these brands sold by RBH were not material to PMI for all periods presented.
•Within the tables and schedules presented throughout this earnings release, certain columns and rows may not add due to the use of rounded numbers for disclosure purposes.
Financial
•"Cost of sales" consists principally of: tobacco leaf, non-tobacco raw materials, labor and manufacturing costs; shipping and handling costs; and the cost of devices produced by third-party electronics manufacturing service providers. Estimated costs associated with device warranty programs are generally provided for in cost of sales in the period the related revenues are recognized.
•"Adjusted Gross Profit Margin" is calculated as adjusted gross profit divided by adjusted net revenues.
•"Marketing, administration and research costs" include the costs of marketing and selling our products, other costs generally not related to the manufacture of our products (excluding corporate expenses and other), and costs incurred to develop new products. The most significant components of our marketing, administration and research costs are marketing and sales expenses and general and administrative expenses.
•"Adjusted Operating Companies Income Margin" is calculated as adjusted operating companies income divided by adjusted net revenues.
•In the first quarter of 2026, "Corporate expenses and other" include our general corporate related costs and certain other expenses, which previously were included in cost of sales and marketing, administration and research costs. Other expenses includes foreign currency gains/losses and compensation expense related to restricted share units and performance share units awards.
•"Cost" in the Consolidated Financial Summary table of total PMI reflects the currency neutral variances of: cost of sales (excluding the volume/mix cost component) and, where applicable, marketing, administration and research costs (including restructuring costs); corporate expenses and other; and amortization and impairment of intangibles.
•"Other" in the Consolidated Financial Summary table of total PMI Volume/Mix/Other includes the currency neutral net revenue variance, unrelated to volume/mix and price components, attributable to: fees for certain distribution rights billed to customers in certain markets.
•In the first quarter of 2026, PMI introduced Operating Companies Income (OCI) as an additional profitability measure for our U.S. and International business units. OCI is calculated as Operating Income (OI) less corporate expenses and other. Other includes foreign currency gains/losses and compensation expense related to restricted share units and performance share units awards, which were reclassified from Cost of Sales and Marketing, Administration and Research costs.
•"Adjusted Operating Income Margin" is calculated as adjusted operating income, divided by adjusted net revenues.
•"Adjusted EBITDA" is defined as earnings before interest, taxes, depreciation, amortization and equity (income)/loss in unconsolidated subsidiaries, excluding restructuring costs, impairment of intangibles, and unusual items.
•"Net debt" is defined as total debt, less cash and cash equivalents.
•Growth rates presented on an organic basis reflect adjusted results, excluding currency, acquisitions and divestitures.
•Management reviews net revenues, gross profit, operating companies income, operating income, operating cash flow and earnings per share, or "EPS," on an adjusted basis, which may exclude the impact of currency and other items such as acquisitions, divestitures, restructuring costs, tax items and other adjusting items. Additionally, starting in 2022 and on a comparative basis, for these measures other than net revenues and operating cash flow, PMI includes adjustments to add back amortization expense on acquisition related intangible assets that are recorded as part of purchase accounting and contribute to PMI’s revenue generation, as well as impairment of intangible assets, if any. While amortization expense on acquisition related intangible assets is excluded in these adjusted measures, the net
4
revenues generated from these acquired intangible assets are included in the company's adjusted measures, unless otherwise stated. Currency-neutral and organic growth rates reflect the way management views underlying performance for these measures. PMI believes that such measures provide useful insight into underlying business trends and results. Management reviews these measures because they exclude changes in currency exchange rates and other factors that may distort underlying business trends, thereby improving the comparability of PMI’s business performance between reporting periods. Furthermore, PMI uses several of these measures in its management compensation program to promote internal fairness and a disciplined assessment of performance against company targets. PMI discloses these measures to enable investors to view the business through the eyes of management.
•When PMI provides its expectation for adjusted net revenues, adjusted operating income and margin, adjusted earnings per share and adjusted operating cash flow on a forward-looking basis, a reconciliation of the differences between the non-GAAP expectations and the corresponding GAAP measures, as described above, generally is not available without unreasonable effort due to potentially high variability, complexity, and low visibility as to the items that would be excluded from the GAAP measure in the relevant future period, such as restructuring costs, amortization and impairment of acquired intangibles and other adjusting items, changes in currency exchange rates, the impact and timing of potential acquisitions and divestitures, and other structural changes or their probable significance. The variability of the excluded items may have a significant, and potentially unpredictable, impact on our future GAAP results.
•Non-GAAP measures used by PMI should neither be considered in isolation nor as a substitute for the financial measures prepared in accordance with U.S. GAAP. For a reconciliation of non-GAAP measures to the most directly comparable U.S. GAAP measures, see the "Select Financial Information and Reconciliations of Non-GAAP Financial Measures" section of this document.
•U.S. GAAP Treatment of a country as a Highly Inflationary Economy: following the categorization of a country by the International Practices Task Force of the Center for Audit Quality as having a three-year cumulative inflation rate greater than 100%, the country is considered highly inflationary in accordance with U.S. GAAP. For such countries, PMI accounts for the operations of its local affiliates as highly inflationary, and to treat the U.S. dollar as the functional currency of the affiliates. Such treatment was effective July 1, 2018, for Argentina, April 1, 2022, for Turkey, and October 1, 2024 for Egypt.
•"Fair value adjustment for equity security investments" reflects the adjustment resulting from share price movements in passive investments for publicly traded entities that are not controlled or influenced by PMI. Under U.S. GAAP, such adjustments are required to be reflected directly in the income statement. Adjustments reflect share price movements in PMI's investments in India and Sri Lanka.
•"Income tax impact associated with Swedish Match AB financing" reflects a deferred tax benefit (cost) for unrealized foreign currency losses (gains) on intercompany loans related to the Swedish Match acquisition financing reflected in PMI's consolidated statements of earnings. The underlying pre-tax foreign currency movements fully offset in the consolidated statements of earnings and were reflected as currency translation adjustments in PMI's consolidated statements of stockholders' (deficit) equity.
Smoke-Free
•Smoke-free business ("SFB”) is the term PMI uses to refer to all of its smoke-free products. SFB also includes wellness products, as well as consumer accessories.
•Smoke-free products ("SFPs”) is the term PMI uses to refer to all of its products that provide nicotine without combusting tobacco, such as heat-not-burn, e-Vapor, and oral smokeless, and that therefore generate far lower levels of harmful chemicals. As such, these products have the potential to present less risk of harm versus continued smoking.
•Wellness products primarily refer to products associated with oral and intra-oral delivery systems.
•"Heated tobacco units" or "HTU" is the term PMI uses to refer to heated tobacco consumables, which include our BLENDS, DELIA, HEETS and HEETS Creations (defined collectively as "HEETS"), SENTIA, TEREA, TEREA CRAFTED, and TEREA Dimensions, as well as the KT&G-licensed brands, Fiit and Miix (outside of South Korea). HTU's also include zero tobacco heat-not-burn consumables (BEYOND, and LEVIA).
•Unless otherwise stated, market share for HTUs is defined as the in-market sales volume for HTUs as a percentage of the total estimated industry sales volume for cigarettes and HTUs. For Japan, total estimated industry sales volume also includes cigarillos.
5
•"Adjusted market share for HTUs" is defined as the total in-market sales volume for PMI HTUs as a percentage of the total estimated sales volume for cigarettes and HTUs, excluding the impact of estimated distributor and wholesaler inventory movements.
•Unless otherwise stated, all references to IQOS are to PMI's IQOS and BONDS devices and heated tobacco consumables.
•IQOS heat-not-burn devices are precisely controlled heating devices into which specially designed and proprietary tobacco units are inserted and heated to generate an aerosol.
•"PMI heat-not-burn products" or "PMI HTUs" or "IQOS HTUs" include licensed KT&G heat-not-burn products.
•“Total PMI SFPs users” is defined as the sum of “Total IQOS users”, “Total oral smokeless users", “Total e-Vapor users” of PMI products and considering “Poly-users across PMI SFPs categories”.
•“Total IQOS users” is defined as the estimated number of Legal Age (minimum 18 years1) users of PMI heat-not-burn products, for which PMI HTUs represented at least a portion of their daily tobacco consumption over the past seven days.
The estimated number of adults who have "switched to IQOS and stopped smoking" reflects:
•for markets where there are no heat-not-burn products other than PMI heat-not-burn products: daily individual consumption of PMI HTUs represents the totality of their daily tobacco consumption in the past seven days;
•for markets where PMI heat-not-burn products are among other heat-not-burn products: daily individual consumption of HTUs represents the totality of their daily tobacco consumption in the past seven days, of which at least 70% is PMI HTUs.
•“Total PMI oral smokeless users” are defined as the estimated number of Legal Age (minimum 21 years in the U.S and minimum 18 years11outside the U.S) users of oral smokeless products who consumed at least one of PMI oral smokeless products (nicotine pouches in the U.S., and nicotine pouches or snus outside the U.S) over the past seven days.
•“Total PMI e-Vapor users” is defined as the estimated number of Legal Age (minimum 18 years1) users of e-Vapor products, who consumed at least one of PMI
e-Vapor products in the past seven days.
e-Vapor products in the past seven days.
•“Poly-users across PMI SFPs categories” are defined as the estimated number of Legal Age (minimum 18 years1) users who used multiple PMI SFPs over the past seven days.
•The above SFPs user metrics reflect PMI estimates, which are based on PMI's proprietary Nicotine Containing Products Tracker (NCPT) in combination with SFP offtake volume trends. The NCPT methodology estimates rely on NCPT e-Vapor, oral smokeless (except the U.S.) and poly-usage data, which is calibrated using Total IQOS user data, leveraging our deep understanding of PMI’s heat-not-burn category and its size. Total PMI oral smokeless users in the U.S. are approximated through volume-based estimations, as NCPT data for the U.S. is not currently available.
Note: NCPT sample-based estimations use a 95% Confidence Interval. The accuracy and reliability of the estimates may vary based on sample size, market maturity and availability of information.
•"Oral smoke-free product volume" excludes snuff, snuff leaf and U.S. chew.
•“Modern oral” pouches mainly refer to pre-portioned pouches containing nicotine, flavors, and cellulose substrate. In some markets, modern oral pouches may also contain small amounts of tobacco.
•Oral smoke-free products conversion: 1 pouch equals 1 unit.
•E-vapor products conversion: one milliliter of e-vapor liquid equivalent to 10 units.
11Minimum 18 years or older depending on market regulation
6
Select Financial Information and Reconciliations of Non-GAAP Financial Measures
7
| Schedule 1 (1/2) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Diluted Earnings Per Share (EPS) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| ($ in millions, except per share data) / (Unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Quarters Ended | Diluted EPS | Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| $ 2.12 | 2026 Diluted Earnings Per Share (1) | $ 5.48 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| $ 2.23 | 2025 Diluted Earnings Per Share (1) | $ 5.89 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| $ (0.11) | Change | $ (0.41) | |||||||||||||||||||||||||||||||||||||||||||||||||||
| (4.9)% | % Change | (7.0)% | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Reconciliation: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| $ 2.23 | 2025 Diluted Earnings Per Share (1) | $ 5.89 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| — | 2025 Restructuring charges | 0.13 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| — | 2025 Impairment of goodwill | 0.03 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| 0.13 | 2025 Amortization of intangibles | 0.37 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| (0.10) | 2025 RBH (Canada) Plan Implementation, including dividend income, net | (0.10) | |||||||||||||||||||||||||||||||||||||||||||||||||||
| — | 2025 Income tax impact associated with Swedish Match AB financing | (0.24) | |||||||||||||||||||||||||||||||||||||||||||||||||||
| (0.07) | 2025 Fair value adjustment for equity security investments | (0.33) | |||||||||||||||||||||||||||||||||||||||||||||||||||
| 0.09 | 2025 Impairment of Wellness business related equity investment | 0.09 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| 0.10 | 2025 Germany excise tax classification litigation charge | 0.10 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| (0.14) | 2025 Tax Items | (0.11) | |||||||||||||||||||||||||||||||||||||||||||||||||||
| — | 2026 Restructuring charges | (0.02) | |||||||||||||||||||||||||||||||||||||||||||||||||||
| (0.13) | 2026 Amortization of intangibles | (0.37) | |||||||||||||||||||||||||||||||||||||||||||||||||||
| (0.01) | 2026 Income tax impact associated with Swedish Match AB financing | (0.07) | |||||||||||||||||||||||||||||||||||||||||||||||||||
| — | 2026 Impairment related to the RBH equity investment | (0.33) | |||||||||||||||||||||||||||||||||||||||||||||||||||
| (0.06) | 2026 Fair value adjustment for equity security investments | (0.22) | |||||||||||||||||||||||||||||||||||||||||||||||||||
| — | 2026 Egypt sales tax settlement adjustment | 0.01 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| (0.04) | 2026 Dutch pension plan buy-out loss | (0.04) | |||||||||||||||||||||||||||||||||||||||||||||||||||
| (0.01) | Currency | 0.20 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| 0.02 | Interest | 0.03 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| (0.08) | Change in tax rate | 0.03 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| 0.19 | Operations (2) | 0.43 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| $ 2.12 | 2026 Diluted Earnings Per Share (1) | $ 5.48 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| (1) Basic and diluted EPS were calculated using the following (in millions): | |||||||||||||||||||||||||||||||||||||||||||||||||||||
8
| Schedule 1 (2/2) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Diluted Earnings Per Share (EPS) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| ($ in millions, except per share data) / (Unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Quarters Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| $ 3,313 | $ 3,478 | Net Earnings attributable to PMI | $ 8,568 | $ 9,207 | |||||||||||||||||||||||||||||||||||||||||||||||||
| 8 | 10 | Less: Distributed and undistributed earnings attributable to share-based payment awards (3) | 22 | 26 | |||||||||||||||||||||||||||||||||||||||||||||||||
| $ 3,305 | $ 3,468 | Net Earnings for basic and diluted EPS | $ 8,546 | $ 9,181 | |||||||||||||||||||||||||||||||||||||||||||||||||
| 1,559 | 1,557 | Weighted-average shares for basic EPS | 1,558 | 1,556 | |||||||||||||||||||||||||||||||||||||||||||||||||
| 1 | 1 | Plus Contingently Issuable Performance Stock Units (3) | 2 | 2 | |||||||||||||||||||||||||||||||||||||||||||||||||
| 1,560 | 1,558 | Weighted-average shares for diluted EPS | 1,560 | 1,558 | |||||||||||||||||||||||||||||||||||||||||||||||||
| (2) Includes the impact of shares outstanding and share-based payments | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| (3) Including rounding adjustment | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Note: EPS is computed independently for each of the periods presented. Accordingly, the sum of the quarterly EPS amounts may not agree to the total for the year | |||||||||||||||||||||||||||||||||||||||||||||||||||||
9
| Schedule 2 | ||||||||||||||||||||||||||||||||||||||||||||
| PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries | ||||||||||||||||||||||||||||||||||||||||||||
| Reconciliation of Non-GAAP Measures | ||||||||||||||||||||||||||||||||||||||||||||
| Reconciliation of Reported Diluted EPS to Reported Diluted EPS, excluding Currency, | ||||||||||||||||||||||||||||||||||||||||||||
| and Reconciliation of Reported Diluted EPS to Adjusted Diluted EPS, excluding Currency | ||||||||||||||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
| Quarters Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | % Change | 2026 | 2025 | % Change | |||||||||||||||||||||||||||||||||||||||
| $ 2.12 | $ 2.23 | (4.9) | % | Reported Diluted EPS | $ 5.48 | $ 5.89 | (7.0) | % | ||||||||||||||||||||||||||||||||||||
| (0.01) | Less: Currency | 0.20 | ||||||||||||||||||||||||||||||||||||||||||
| $ 2.13 | $ 2.23 | (4.5) | % | Reported Diluted EPS, excluding Currency | $ 5.28 | $ 5.89 | (10.4) | % | ||||||||||||||||||||||||||||||||||||
| Quarters Ended September 30, | Nine Months Ended September 30, | Year Ended | ||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | % Change | 2026 | 2025 | % Change | 2025 | ||||||||||||||||||||||||||||||||||||||
| $ 2.12 | $ 2.23 | (4.9) | % | Reported Diluted EPS | $ 5.48 | $ 5.89 | (7.0) | % | $ 7.26 | |||||||||||||||||||||||||||||||||||
| — | — | Restructuring charges | 0.02 | 0.13 | 0.14 | |||||||||||||||||||||||||||||||||||||||
| — | — | Impairment of goodwill | — | 0.03 | 0.03 | |||||||||||||||||||||||||||||||||||||||
| 0.13 | 0.13 | Amortization of intangibles | 0.37 | 0.37 | 0.50 | |||||||||||||||||||||||||||||||||||||||
| 0.06 | (0.07) | Fair value adjustment for equity security investments | 0.22 | (0.33) | (0.18) | |||||||||||||||||||||||||||||||||||||||
| 0.01 | — | Income tax impact associated with Swedish Match AB financing | 0.07 | (0.24) | (0.25) | |||||||||||||||||||||||||||||||||||||||
| — | — | Loss on expected sale of consumer accessories and other businesses | — | — | 0.06 | |||||||||||||||||||||||||||||||||||||||
| — | 0.10 | Germany excise tax classification litigation charge | — | 0.10 | 0.10 | |||||||||||||||||||||||||||||||||||||||
| — | (0.10) | RBH (Canada) Plan Implementation, including dividend income, net | — | (0.10) | (0.10) | |||||||||||||||||||||||||||||||||||||||
| — | 0.09 | Impairment of Wellness business related equity investment | — | 0.09 | 0.09 | |||||||||||||||||||||||||||||||||||||||
| — | — | Impairment related to the RBH equity investment | 0.33 | — | — | |||||||||||||||||||||||||||||||||||||||
| — | — | Egypt sales tax settlement adjustment | (0.01) | — | — | |||||||||||||||||||||||||||||||||||||||
| 0.04 | — | Dutch pension plan buy-out loss | 0.04 | — | — | |||||||||||||||||||||||||||||||||||||||
| — | (0.14) | Tax items | — | (0.11) | (0.11) | |||||||||||||||||||||||||||||||||||||||
| $ 2.36 | $ 2.24 | 5.4 | % | Adjusted Diluted EPS | $ 6.52 | $ 5.83 | 11.8 | % | $ 7.54 | |||||||||||||||||||||||||||||||||||
| (0.01) | Less: Currency | 0.20 | ||||||||||||||||||||||||||||||||||||||||||
| $ 2.37 | $ 2.24 | 5.8 | % | Adjusted Diluted EPS, excluding Currency | $ 6.32 | $ 5.83 | 8.4 | % | ||||||||||||||||||||||||||||||||||||
| Note: EPS is computed independently for each of the periods presented. Accordingly, the sum of the quarterly EPS amounts may not agree to the total for the year | ||||||||||||||||||||||||||||||||||||||||||||
10
| Schedule 3 | |||||||||||||||||||||||||||||||||||||||||
| PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries | |||||||||||||||||||||||||||||||||||||||||
| Reconciliation of Non-GAAP Measures | |||||||||||||||||||||||||||||||||||||||||
| Net Revenues by Product Category and Adjustments of Net Revenues for the Impact of Currency and Acquisitions / Divestitures | |||||||||||||||||||||||||||||||||||||||||
| ($ in millions) / (Unaudited) | |||||||||||||||||||||||||||||||||||||||||
| Net Revenues | Currency | Net Revenues excluding Currency | Acquisitions / Divestitures | Net Revenues excl. Currency & Acquisitions / Divestitures | Quarters Ended September 30, | Net Revenues | Total | Excluding Currency | Excluding Currency & Acquisitions / Divestitures | ||||||||||||||||||||||||||||||||
| 2026 | PMI | 2025 | % Change | ||||||||||||||||||||||||||||||||||||||
| $ 3,867 | $ (74) | $ 3,941 | $ (27) | $ 3,968 | International Smoke-Free | $ 3,839 | 0.7 | % | 2.7 | % | 3.4 | % | |||||||||||||||||||||||||||||
| 6,725 | (81) | 6,806 | — | 6,806 | International Combustibles | 6,316 | 6.5 | % | 7.8 | % | 7.8 | % | |||||||||||||||||||||||||||||
| 10,592 | (155) | 10,747 | (27) | 10,774 | Total International | 10,156 | 4.3 | % | 5.8 | % | 6.1 | % | |||||||||||||||||||||||||||||
| 845 | (1) | 846 | — | 846 | U.S. | 689 | 22.7 | % | 22.7 | % | 22.7 | % | |||||||||||||||||||||||||||||
| $ 11,438 | $ (155) | $ 11,593 | $ (27) | $ 11,620 | Total PMI | $ 10,845 | 5.5 | % | 6.9 | % | 7.1 | % | |||||||||||||||||||||||||||||
| 2026 | Smoke-Free | 2025 | % Change | ||||||||||||||||||||||||||||||||||||||
| $ 3,867 | $ (74) | $ 3,941 | $ (27) | $ 3,968 | International Smoke-Free | $ 3,839 | 0.7 | % | 2.7 | % | 3.4 | % | |||||||||||||||||||||||||||||
| 758 | (1) | 758 | — | 758 | U.S. | 605 | 25.2 | % | 25.3 | % | 25.3 | % | |||||||||||||||||||||||||||||
| 74 | (1) | 75 | — | 75 | of which, Wellness | 57 | 29.6 | % | 30.5 | % | 30.5 | % | |||||||||||||||||||||||||||||
| $ 4,625 | $ (75) | $ 4,700 | $ (27) | $ 4,727 | Total Smoke-Free | $ 4,445 | 4.1 | % | 5.7 | % | 6.3 | % | |||||||||||||||||||||||||||||
| 2026 | Combustible Tobacco | 2025 | % Change | ||||||||||||||||||||||||||||||||||||||
| $ 6,725 | $ (81) | $ 6,806 | $ — | $ 6,806 | International Combustibles | $ 6,316 | 6.5 | % | 7.8 | % | 7.8 | % | |||||||||||||||||||||||||||||
| 87 | — | 87 | — | 87 | U.S. | 84 | 4.2 | % | 4.2 | % | 4.2 | % | |||||||||||||||||||||||||||||
| $ 6,812 | $ (81) | $ 6,893 | $ — | $ 6,893 | Total Combustible Tobacco | $ 6,400 | 6.4 | % | 7.7 | % | 7.7 | % | |||||||||||||||||||||||||||||
| Note: Sum of product categories or segments might not foot to Total PMI due to roundings. "-" indicates amounts between -$0.5 million and +$0.5 million | |||||||||||||||||||||||||||||||||||||||||
11
| Schedule 4 | |||||||||||||||||||||||||||||||||||||||||
| PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries | |||||||||||||||||||||||||||||||||||||||||
| Reconciliation of Non-GAAP Measures | |||||||||||||||||||||||||||||||||||||||||
| Net Revenues by Product Category and Adjustments of Net Revenues for the Impact of Currency and Acquisitions / Divestitures | |||||||||||||||||||||||||||||||||||||||||
| ($ in millions) / (Unaudited) | |||||||||||||||||||||||||||||||||||||||||
| Net Revenues | Currency | Net Revenues excluding Currency | Acquisitions / Divestitures | Net Revenues excl. Currency & Acquisitions / Divestitures | Nine Months Ended September 30, | Net Revenues | Total | Excluding Currency | Excluding Currency & Acquisitions / Divestitures | ||||||||||||||||||||||||||||||||
| 2026 | PMI | 2025 | % Change | ||||||||||||||||||||||||||||||||||||||
| $ 11,580 | $ 297 | $ 11,283 | $ (44) | $ 11,328 | International Smoke-Free | $ 10,310 | 12.3 | % | 9.4 | % | 9.9 | % | |||||||||||||||||||||||||||||
| 18,872 | 429 | 18,443 | — | 18,443 | International Combustibles | 17,525 | 7.7 | % | 5.2 | % | 5.2 | % | |||||||||||||||||||||||||||||
| 30,452 | 726 | 29,726 | (44) | 29,770 | Total International | 27,835 | 9.4 | % | 6.8 | % | 7.0 | % | |||||||||||||||||||||||||||||
| 2,324 | 8 | 2,316 | — | 2,316 | U.S. | 2,451 | (5.2) | % | (5.5) | % | (5.5) | % | |||||||||||||||||||||||||||||
| $ 32,776 | $ 734 | $ 32,042 | $ (44) | $ 32,086 | Total PMI | $ 30,286 | 8.2 | % | 5.8 | % | 5.9 | % | |||||||||||||||||||||||||||||
| 2026 | Smoke-Free | 2025 | % Change | ||||||||||||||||||||||||||||||||||||||
| $ 11,580 | $ 297 | $ 11,283 | $ (44) | $ 11,328 | International Smoke-Free | $ 10,310 | 12.3 | % | 9.4 | % | 9.9 | % | |||||||||||||||||||||||||||||
| 2,069 | 8 | 2,062 | — | 2,062 | U.S. | 2,189 | (5.5) | % | (5.8) | % | (5.8) | % | |||||||||||||||||||||||||||||
| 193 | 8 | 185 | — | 185 | of which, Wellness | 166 | 16.1 | % | 11.5 | % | 11.5 | % | |||||||||||||||||||||||||||||
| $ 13,649 | $ 304 | $ 13,345 | $ (44) | $ 13,389 | Total Smoke-Free | $ 12,500 | 9.2 | % | 6.8 | % | 7.1 | % | |||||||||||||||||||||||||||||
| 2026 | Combustible Tobacco | 2025 | % Change | ||||||||||||||||||||||||||||||||||||||
| $ 18,872 | $ 429 | $ 18,443 | $ — | $ 18,443 | International Combustibles | $ 17,525 | 7.7 | % | 5.2 | % | 5.2 | % | |||||||||||||||||||||||||||||
| 254 | — | 254 | — | 254 | U.S. | 261 | (2.6) | % | (2.6) | % | (2.6) | % | |||||||||||||||||||||||||||||
| $ 19,126 | $ 429 | $ 18,697 | $ — | $ 18,697 | Total Combustible Tobacco | $ 17,786 | 7.5 | % | 5.1 | % | 5.1 | % | |||||||||||||||||||||||||||||
| Note: Sum of product categories or segments might not foot to Total PMI due to roundings. "-" indicates amounts between -$0.5 million and +$0.5 million | |||||||||||||||||||||||||||||||||||||||||
12
| Schedule 5 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Reconciliation of Non-GAAP Measures | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Reconciliation of Gross Profit to Adjusted Gross Profit, excluding Currency and Acquisitions / Divestitures | ||||||||||||||||||||||||||||||||||||||||||||||||||
| ($ in millions) / (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross Profit | Adjusting Items (1) | Adjusted Gross Profit | Currency | Adjusted Gross Profit excluding Currency | Acquisitions / Divestitures | Adjusted Gross Profit excl. Currency & Acquisitions / Divestitures | Gross Profit | Adjusting Items (1) | Adjusted Gross Profit | Total | Excluding Currency | Excluding Currency & Acquisitions / Divestitures | ||||||||||||||||||||||||||||||||||||||
| 2026 | Quarters Ended September 30, | 2025 | % Change | |||||||||||||||||||||||||||||||||||||||||||||||
| $ 2,705 | $ (1) | $ 2,705 | $ (60) | $ 2,766 | $ (7) | $ 2,773 | International Smoke-Free | $ 2,683 | $ (1) | $ 2,683 | 0.8 | % | 3.1 | % | 3.3 | % | ||||||||||||||||||||||||||||||||||
| 4,610 | — | 4,610 | (52) | 4,662 | — | 4,662 | International Combustibles | 4,244 | — | 4,244 | 8.6 | % | 9.8 | % | 9.8 | % | ||||||||||||||||||||||||||||||||||
| 7,315 | (1) | 7,315 | (112) | 7,428 | (7) | 7,435 | Total International | 6,927 | (1) | 6,928 | 5.6 | % | 7.2 | % | 7.3 | % | ||||||||||||||||||||||||||||||||||
| 539 | (5) | 544 | — | 544 | — | 544 | U.S. | 434 | (5) | 439 | 23.9 | % | 23.8 | % | 23.8 | % | ||||||||||||||||||||||||||||||||||
| $ 7,854 | $ (6) | $ 7,860 | $ (112) | $ 7,972 | $ (7) | $ 7,979 | Total PMI | $ 7,361 | $ (5) | $ 7,366 | 6.7 | % | 8.2 | % | 8.3 | % | ||||||||||||||||||||||||||||||||||
| 2026 | Nine Months Ended September 30, | 2025 | % Change | |||||||||||||||||||||||||||||||||||||||||||||||
| $ 8,105 | $ (2) | $ 8,107 | $ 194 | $ 7,913 | $ (11) | $ 7,925 | International Smoke-Free | $ 7,088 | $ (2) | $ 7,090 | 14.3 | % | 11.6 | % | 11.8 | % | ||||||||||||||||||||||||||||||||||
| 12,839 | — | 12,839 | 290 | 12,549 | — | 12,549 | International Combustibles | 11,679 | — | 11,679 | 9.9 | % | 7.4 | % | 7.4 | % | ||||||||||||||||||||||||||||||||||
| 20,944 | (2) | 20,946 | 484 | 20,462 | (11) | 20,474 | Total International | 18,767 | (2) | 18,769 | 11.6 | % | 9.0 | % | 9.1 | % | ||||||||||||||||||||||||||||||||||
| 1,473 | (16) | 1,489 | (1) | 1,490 | — | 1,490 | U.S. | 1,729 | (15) | 1,744 | (14.6) | % | (14.6) | % | (14.6) | % | ||||||||||||||||||||||||||||||||||
| $ 22,418 | $ (18) | $ 22,436 | $ 483 | $ 21,953 | $ (11) | $ 21,964 | Total PMI | $ 20,497 | $ (16) | $ 20,513 | 9.4 | % | 7.0 | % | 7.1 | % | ||||||||||||||||||||||||||||||||||
| (1) 2026 third-quarter and nine months ended September 30 reflect amortization of intangibles, all amounts are related to cost of goods sold. 2025 third-quarter and nine months ended September 30 reflect amortization of intangibles, all amounts are related to cost of goods sold. | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Note: Sum of segments might not foot to Total PMI due to roundings. "-" indicates amounts between -$0.5 million and +$0.5 million | ||||||||||||||||||||||||||||||||||||||||||||||||||
13
| Schedule 6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reconciliation of Non-GAAP Measures | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reconciliation of Adjusted Gross Profit Margin, excluding Currency and Acquisitions / Divestitures | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ($ in millions) / (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjusted Gross Profit (1) | Net Revenues (2) | Adjusted Gross Profit Margin | Adjusted Gross Profit excluding Currency (1) | Net Revenues excluding Currency (2) | Adjusted Gross Profit Margin excluding Currency | Adjusted Gross Profit excluding Currency & Acquisitions / Divestitures (1) | Net Revenues excluding Currency & Acquisitions / Divestitures (2) | Adjusted Gross Profit Margin excluding Currency & Acquisitions / Divestitures | Adjusted Gross Profit (1) | Net Revenues (2) | Adjusted Gross Profit Margin | Adjusted Gross Profit Margin | Adjusted Gross Profit Margin excluding Currency | Adjusted Gross Profit Margin excluding Currency & Acquisitions / Divestitures | ||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | Quarters Ended September 30, | 2025 | % Points Change | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| $ 2,705 | $ 3,867 | 70.0 | % | $ 2,766 | $ 3,941 | 70.2 | % | $ 2,773 | $ 3,968 | 69.9 | % | International Smoke-Free | $ 2,683 | $ 3,839 | 69.9 | % | 0.1 | 0.3 | — | |||||||||||||||||||||||||||||||||||||||||||
| 4,610 | 6,725 | 68.5 | % | 4,662 | 6,806 | 68.5 | % | 4,662 | 6,806 | 68.5 | % | International Combustibles | 4,244 | 6,316 | 67.2 | % | 1.3 | 1.3 | 1.3 | |||||||||||||||||||||||||||||||||||||||||||
| 7,315 | 10,592 | 69.1 | % | 7,428 | 10,747 | 69.1 | % | 7,435 | 10,774 | 69.0 | % | Total International | 6,928 | 10,156 | 68.2 | % | 0.9 | 0.9 | 0.8 | |||||||||||||||||||||||||||||||||||||||||||
| 544 | 845 | 64.4 | % | 544 | 846 | 64.3 | % | 544 | 846 | 64.3 | % | U.S. | 439 | 689 | 63.7 | % | 0.7 | 0.6 | 0.6 | |||||||||||||||||||||||||||||||||||||||||||
| $ 7,860 | $ 11,438 | 68.7 | % | $ 7,972 | $ 11,593 | 68.8 | % | $ 7,979 | $ 11,620 | 68.7 | % | Total PMI | $ 7,366 | $ 10,845 | 67.9 | % | 0.8 | 0.9 | 0.8 | |||||||||||||||||||||||||||||||||||||||||||
| 2026 | Nine Months Ended September 30, | 2025 | % Points Change | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| $ 8,107 | $ 11,580 | 70.0 | % | $ 7,913 | $ 11,283 | 70.1 | % | $ 7,925 | $ 11,328 | 70.0 | % | International Smoke-Free | $ 7,090 | $ 10,310 | 68.8 | % | 1.2 | 1.3 | 1.2 | |||||||||||||||||||||||||||||||||||||||||||
| 12,839 | 18,872 | 68.0 | % | 12,549 | 18,443 | 68.0 | % | 12,549 | 18,443 | 68.0 | % | International Combustibles | 11,679 | 17,525 | 66.6 | % | 1.4 | 1.4 | 1.4 | |||||||||||||||||||||||||||||||||||||||||||
| 20,946 | 30,452 | 68.8 | % | 20,462 | 29,726 | 68.8 | % | 20,474 | 29,770 | 68.8 | % | Total International | 18,769 | 27,835 | 67.4 | % | 1.4 | 1.4 | 1.4 | |||||||||||||||||||||||||||||||||||||||||||
| 1,489 | 2,324 | 64.1 | % | 1,490 | 2,316 | 64.3 | % | 1,490 | 2,316 | 64.3 | % | U.S. | 1,744 | 2,451 | 71.2 | % | (7.1) | (6.9) | (6.9) | |||||||||||||||||||||||||||||||||||||||||||
| $ 22,436 | $ 32,776 | 68.5 | % | $ 21,953 | $ 32,042 | 68.5 | % | $ 21,964 | $ 32,086 | 68.5 | % | Total PMI | $ 20,513 | $ 30,286 | 67.7 | % | 0.8 | 0.8 | 0.8 | |||||||||||||||||||||||||||||||||||||||||||
| (1) For the calculation of Adjusted Gross Profit and Adjusted Gross Profit excluding currency and acquisitions / divestitures refer to Schedule 5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (2) For the calculation of Net Revenues excluding currency and acquisitions / divestitures refer to Schedule 3 and Schedule 4 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
14
| Schedule 7 | |||||||||||||||||
| PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries | |||||||||||||||||
| Reconciliation of Non-GAAP Measures | |||||||||||||||||
| Reconciliation of Operating Income to Operating Companies Income (OCI) | |||||||||||||||||
| ($ in millions) / (Unaudited) | |||||||||||||||||
| Quarters Ended September 30, | |||||||||||||||||
| 2026 | Total PMI | 2025 | |||||||||||||||
| $ 4,866 | Operating Income | $ 4,263 | |||||||||||||||
| 5 | Add back: Corporate Expenses and Other | (40) | |||||||||||||||
| $ 4,861 | Operating Companies Income (OCI) | $ 4,303 | |||||||||||||||
| Nine Months Ended September 30, | |||||||||||||||||
| 2026 | Total PMI | 2025 | |||||||||||||||
| $ 13,289 | Operating Income | $ 11,519 | |||||||||||||||
| (298) | Add back: Corporate Expenses and Other | (463) | |||||||||||||||
| $ 13,587 | Operating Companies Income (OCI) | $ 11,982 | |||||||||||||||
| Note: Sum of International and U.S. might not foot to Total PMI due to roundings. "-" indicates amounts between -$0.5 million and +$0.5 million | |||||||||||||||||
15
| Schedule 8 | |||||||||||||||||||||||||||||||||||||||||
| PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries | |||||||||||||||||||||||||||||||||||||||||
| Reconciliation of Non-GAAP Measures | |||||||||||||||||||||||||||||||||||||||||
| Adjustments of Operating Companies Income for the Impact of Currency and Acquisitions / Divestitures | |||||||||||||||||||||||||||||||||||||||||
| ($ in millions) / (Unaudited) | |||||||||||||||||||||||||||||||||||||||||
| Operating Companies Income | Currency | Operating Companies Income excluding Currency | Acquisitions / Divestitures | Operating Companies Income excluding Currency & Acquisitions / Divestitures | Operating Companies Income | Total | Excluding Currency | Excluding Currency & Acquisitions / Divestitures | |||||||||||||||||||||||||||||||||
| 2026 | Quarters Ended September 30, | 2025 | % Change | ||||||||||||||||||||||||||||||||||||||
| $ 4,894 | $ (92) | $ 4,986 | $ (2) | $ 4,988 | International | $ 4,335 | 12.9 | % | 15.0 | % | 15.1 | % | |||||||||||||||||||||||||||||
| (34) | 1 | (34) | — | (34) | U.S. | (33) | (3.3) | % | (5.5) | % | (5.5) | % | |||||||||||||||||||||||||||||
| $ 4,861 | $ (91) | $ 4,952 | $ (3) | $ 4,955 | Total PMI | $ 4,303 | 13.0 | % | 15.1 | % | 15.2 | % | |||||||||||||||||||||||||||||
| 2026 | Nine Months Ended September 30, | 2025 | % Change | ||||||||||||||||||||||||||||||||||||||
| $ 13,674 | $ 210 | $ 13,465 | $ (4) | $ 13,469 | International | $ 11,625 | 17.6 | % | 15.8 | % | 15.9 | % | |||||||||||||||||||||||||||||
| (87) | (14) | (73) | — | (73) | U.S. | 356 | -(100)% | -(100)% | -(100)% | ||||||||||||||||||||||||||||||||
| $ 13,587 | $ 196 | $ 13,391 | $ (5) | $ 13,396 | Total PMI | $ 11,982 | 13.4 | % | 11.8 | % | 11.8 | % | |||||||||||||||||||||||||||||
| Note: Sum of International and U.S. might not foot to Total PMI due to roundings. "-" indicates amounts between -$0.5 million and +$0.5 million | |||||||||||||||||||||||||||||||||||||||||
16
| Schedule 9 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Reconciliation of Non-GAAP Measures | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Reconciliation of Operating Companies Income to Adjusted Operating Companies Income, excluding Currency and Acquisitions / Divestitures | ||||||||||||||||||||||||||||||||||||||||||||||||||
| ($ in millions) / (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating Companies Income | Adjusting Items (1) | Adjusted Operating Companies Income | Currency | Adjusted Operating Companies Income excluding Currency | Acquisitions / Divestitures | Adjusted Operating Companies Income excl. Currency & Acquisitions / Divestitures | Operating Companies Income | Adjusting Items (1) | Adjusted Operating Companies Income | Total | Excluding Currency | Excluding Currency & Acquisitions / Divestitures | ||||||||||||||||||||||||||||||||||||||
| 2026 | Quarters Ended September 30, | 2025 | % Change | |||||||||||||||||||||||||||||||||||||||||||||||
| $ 4,894 | $ (46) | $ 4,940 | $ (92) | $ 5,033 | $ (2) | $ 5,035 | International | $ 4,335 | $ (207) | $ 4,542 | 8.8 | % | 10.8 | % | 10.8 | % | ||||||||||||||||||||||||||||||||||
| (34) | (205) | 171 | 1 | 170 | — | 170 | U.S. | (33) | (200) | 168 | 1.9 | % | 1.5 | % | 1.5 | % | ||||||||||||||||||||||||||||||||||
| $ 4,861 | $ (251) | $ 5,112 | $ (91) | $ 5,203 | $ (3) | $ 5,206 | Total PMI | $ 4,303 | $ (407) | $ 4,710 | 8.5 | % | 10.5 | % | 10.5 | % | ||||||||||||||||||||||||||||||||||
| 2026 | Nine Months Ended September 30, | 2025 | % Change | |||||||||||||||||||||||||||||||||||||||||||||||
| $ 13,674 | $ (132) | $ 13,806 | $ 210 | $ 13,596 | $ (4) | $ 13,600 | International | $ 11,625 | $ (586) | $ 12,211 | 13.1 | % | 11.3 | % | 11.4 | % | ||||||||||||||||||||||||||||||||||
| (87) | (637) | 550 | (14) | 564 | — | 564 | U.S. | 356 | (601) | 958 | (42.6) | % | (41.1) | % | (41.1) | % | ||||||||||||||||||||||||||||||||||
| $ 13,587 | $ (769) | $ 14,356 | $ 196 | $ 14,160 | $ (5) | $ 14,165 | Total PMI | $ 11,982 | $ (1,187) | $ 13,169 | 9.0 | % | 7.5 | % | 7.6 | % | ||||||||||||||||||||||||||||||||||
| (1) See Schedule 10 and Schedule 11 for Adjusting Items details | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Note: Sum of International and U.S. might not foot to Total PMI due to roundings. "-" indicates amounts between -$0.5 million and +$0.5 million | ||||||||||||||||||||||||||||||||||||||||||||||||||
17
| Schedule 10 | |||||||||||||||||||||||||||||||||||||||||||||||
| PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries | |||||||||||||||||||||||||||||||||||||||||||||||
| Reconciliation of Non-GAAP Measures | |||||||||||||||||||||||||||||||||||||||||||||||
| Reconciliation of Operating Companies Income to Adjusted Operating Companies Income | |||||||||||||||||||||||||||||||||||||||||||||||
| ($ in millions) / (Unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||
| Quarters Ended September 30, | Change Fav./(Unfav.) | Variance Fav./(Unfav.) | |||||||||||||||||||||||||||||||||||||||||||||
| PMI | 2026 | 2025 | Total | Excluding Currency & Acquisitions / Divestitures | Total | Currency | Acquisitions / Divestitures | Price | Vol / Mix/ Other | Cost | |||||||||||||||||||||||||||||||||||||
| Operating Companies Income | $ 4,861 | $ 4,303 | 13.0 | % | 15.2 | % | $ 558 | $ (91) | $ (3) | $ 739 | $ (23) | $ (64) | |||||||||||||||||||||||||||||||||||
| Amortization of intangibles | (247) | (250) | 1.2 | % | 1.2 | % | 3 | — | — | — | — | 3 | |||||||||||||||||||||||||||||||||||
| RBH (Canada) Plan Implementation | 0 | 19 | (100.0) | % | (100.0) | % | (19) | — | — | — | — | (19) | |||||||||||||||||||||||||||||||||||
| Germany excise tax classification litigation charge | — | (176) | 100.0 | % | 100.0 | % | 176 | — | — | — | — | 176 | |||||||||||||||||||||||||||||||||||
| Restructuring charges | (4) | — | — | % | — | % | (4) | — | — | — | — | (4) | |||||||||||||||||||||||||||||||||||
| Adjusted Operating Companies Income | $ 5,112 | $ 4,710 | 8.5 | % | 10.5 | % | $ 402 | $ (91) | $ (3) | $ 739 | $ (23) | $ (220) | |||||||||||||||||||||||||||||||||||
| International | |||||||||||||||||||||||||||||||||||||||||||||||
| Operating Companies Income | $ 4,894 | $ 4,335 | 12.9 | % | 15.1 | % | $ 559 | $ (92) | $ (2) | $ 586 | $ (13) | $ 80 | |||||||||||||||||||||||||||||||||||
| Amortization of intangibles | (46) | (50) | 7.6 | % | 7.6 | % | 4 | — | — | — | — | 4 | |||||||||||||||||||||||||||||||||||
| Germany excise tax classification litigation charge | — | (176) | 100.0 | % | 100.0 | % | 176 | — | — | — | — | 176 | |||||||||||||||||||||||||||||||||||
| Adjusted Operating Companies Income | $ 4,940 | $ 4,542 | 8.8 | % | 10.8 | % | $ 398 | $ (92) | $ (2) | $ 586 | $ (13) | $ (81) | |||||||||||||||||||||||||||||||||||
| U.S. | |||||||||||||||||||||||||||||||||||||||||||||||
| Operating Companies Income | $ (34) | $ (33) | (3.3) | % | (5.5) | % | $ (1) | $ 1 | $ — | $ 153 | $ (9) | $ (146) | |||||||||||||||||||||||||||||||||||
| Amortization of intangibles | (201) | (200) | (0.3) | % | (0.3) | % | (1) | — | — | — | — | (1) | |||||||||||||||||||||||||||||||||||
| Restructuring charges | (4) | — | — | % | — | % | (4) | — | — | — | — | (4) | |||||||||||||||||||||||||||||||||||
| Adjusted Operating Companies Income | $ 171 | $ 168 | 1.9 | % | 1.5 | % | $ 3 | $ 1 | $ — | $ 153 | $ (9) | $ (141) | |||||||||||||||||||||||||||||||||||
| Note: Sums of International and U.S. and adjusting items might not foot due to roundings. "-" indicates amounts between -$0.5 million and +$0.5 million. | |||||||||||||||||||||||||||||||||||||||||||||||
18
| Schedule 11 | |||||||||||||||||||||||||||||||||||||||||||||||
| PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries | |||||||||||||||||||||||||||||||||||||||||||||||
| Reconciliation of Non-GAAP Measures | |||||||||||||||||||||||||||||||||||||||||||||||
| Reconciliation of Reported Operating Companies Income to Adjusted Operating Companies Income | |||||||||||||||||||||||||||||||||||||||||||||||
| ($ in millions) / (Unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||
| Nine Months Ended September 30, | Change Fav./(Unfav.) | Variance Fav./(Unfav.) | |||||||||||||||||||||||||||||||||||||||||||||
| PMI | 2026 | 2025 | Total | Excluding Currency & Acquisitions / Divestitures | Total | Currency | Acquisitions / Divestitures | Price | Vol / Mix/ Other | Cost | |||||||||||||||||||||||||||||||||||||
| Operating Companies Income | $ 13,587 | $ 11,982 | 13.4 | % | 11.8 | % | $ 1,605 | $ 196 | $ (5) | $ 1,889 | $ (261) | $ (214) | |||||||||||||||||||||||||||||||||||
| Amortization of intangibles | (750) | (746) | (0.5) | % | (0.5) | % | (4) | — | — | — | — | (4) | |||||||||||||||||||||||||||||||||||
| RBH (Canada) Plan Implementation | — | 19 | (100.0) | % | (100.0) | % | (19) | — | — | — | — | (19) | |||||||||||||||||||||||||||||||||||
| Egypt sales tax settlement adjustment | 15 | — | — | % | — | % | 15 | — | — | — | — | 15 | |||||||||||||||||||||||||||||||||||
| Germany excise tax classification litigation charge | — | (176) | 100.0 | % | 100.0 | % | 176 | — | — | — | — | 176 | |||||||||||||||||||||||||||||||||||
| Impairment of goodwill | — | (41) | 100.0 | % | 100.0 | % | 41 | — | — | — | — | 41 | |||||||||||||||||||||||||||||||||||
| Restructuring charges | (34) | (243) | 86.0 | % | 86.0 | % | 209 | — | — | — | — | 209 | |||||||||||||||||||||||||||||||||||
| Adjusted Operating Companies Income | $ 14,356 | $ 13,169 | 9.0 | % | 7.6 | % | $ 1,187 | $ 196 | $ (5) | $ 1,889 | $ (261) | $ (632) | |||||||||||||||||||||||||||||||||||
| International | |||||||||||||||||||||||||||||||||||||||||||||||
| Operating Companies Income | $ 13,674 | $ 11,625 | 17.6 | % | 15.9 | % | $ 2,049 | $ 210 | $ (4) | $ 1,801 | $ (46) | $ 88 | |||||||||||||||||||||||||||||||||||
| Amortization of intangibles | (147) | (145) | (1.4) | % | (1.4) | % | (2) | — | — | — | — | (2) | |||||||||||||||||||||||||||||||||||
| Egypt sales tax settlement adjustment | 15 | — | — | % | — | % | 15 | — | — | — | — | 15 | |||||||||||||||||||||||||||||||||||
| Germany excise tax classification litigation charge | — | (176) | 100.0 | % | 100.0 | % | 176 | — | — | — | — | 176 | |||||||||||||||||||||||||||||||||||
| Impairment of goodwill | — | (41) | 100.0 | % | 100.0 | % | 41 | — | — | — | — | 41 | |||||||||||||||||||||||||||||||||||
| Restructuring charges | — | (243) | 100.0 | % | 100.0 | % | 243 | — | — | — | — | 243 | |||||||||||||||||||||||||||||||||||
| Adjusted Operating Companies Income | $ 13,806 | $ 12,211 | 13.1 | % | 11.4 | % | $ 1,594 | $ 210 | $ (4) | $ 1,801 | $ (46) | $ (366) | |||||||||||||||||||||||||||||||||||
| U.S. | |||||||||||||||||||||||||||||||||||||||||||||||
| Operating Companies Income | $ (87) | $ 356 | -(100)% | -(100)% | $ (444) | $ (14) | $ — | $ 88 | $ (214) | $ (303) | |||||||||||||||||||||||||||||||||||||
| Amortization of intangibles | (604) | (601) | (0.4) | % | (0.4) | % | (2) | — | — | — | — | (2) | |||||||||||||||||||||||||||||||||||
| Restructuring charges | (34) | — | — | % | — | % | (34) | — | — | — | — | (34) | |||||||||||||||||||||||||||||||||||
| Adjusted Operating Companies Income | $ 550 | $ 958 | (42.6) | % | (41.1) | % | $ (408) | $ (14) | $ — | $ 88 | $ (214) | $ (267) | |||||||||||||||||||||||||||||||||||
| Note: Sums of International and U.S. and adjusting items might not foot due to roundings. "-" indicates amounts between -$0.5 million and +$0.5 million. | |||||||||||||||||||||||||||||||||||||||||||||||
19
| Schedule 12 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Reconciliation of Non-GAAP Measures | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Reconciliation of Operating Income to Adjusted Operating Income, excluding Currency and Acquisitions / Divestitures | ||||||||||||||||||||||||||||||||||||||||||||||||||
| ($ in millions) / (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating Income | Adjusting Items (1) | Adjusted Operating Income | Currency | Adjusted Operating Income excluding Currency | Acquisitions / Divestitures | Adjusted Operating Income excl. Currency & Acquisitions / Divestitures | Operating Income | Adjusting Items (1) | Adjusted Operating Income | Total | Excluding Currency | Excluding Currency & Acquisitions / Divestitures | ||||||||||||||||||||||||||||||||||||||
| 2026 | Quarters Ended September 30, | 2025 | % Change | |||||||||||||||||||||||||||||||||||||||||||||||
| $ 4,866 | $ (251) | $ 5,117 | $ (39) | $ 5,156 | $ (3) | $ 5,159 | Total PMI | $ 4,263 | $ (407) | $ 4,670 | 9.6 | % | 10.4 | % | 10.5 | % | ||||||||||||||||||||||||||||||||||
| 2026 | Nine Months Ended September 30, | 2025 | % Change | |||||||||||||||||||||||||||||||||||||||||||||||
| $ 13,289 | $ (769) | $ 14,058 | $ 379 | $ 13,679 | $ (5) | $ 13,684 | Total PMI | $ 11,519 | $ (1,187) | $ 12,706 | 10.6 | % | 7.7 | % | 7.7 | % | ||||||||||||||||||||||||||||||||||
| (1) Adjusted Operating Income and Adjusted Operating Companies Income excluding currency and acquisitions / divestitures are calculated using the same adjusting items as Operating Companies Income, as presented in Schedule 10 and Schedule 11 | ||||||||||||||||||||||||||||||||||||||||||||||||||
20
| Schedule 13 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reconciliation of Non-GAAP Measures | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reconciliation of Adjusted Operating Income Margin, excluding Currency and Acquisitions / Divestitures | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ($ in millions) / (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjusted Operating Income (1) | Net Revenues (2) | Adjusted Operating Income Margin | Adjusted Operating Income excluding Currency (1) | Net Revenues excluding Currency (2) | Adjusted Operating Income Margin excluding Currency | Adjusted Operating Income excluding Currency & Acquisitions / Divestitures (1) | Net Revenues excluding Currency & Acquisitions / Divestitures (2) | Adjusted Operating Income Margin excluding Currency & Acquisitions / Divestitures | Adjusted Operating Income (1) | Net Revenues (2) | Adjusted Operating Income Margin | Adjusted Operating Income Margin | Adjusted Operating Income Margin excluding Currency | Adjusted Operating Income Margin excluding Currency & Acquisitions / Divestitures | ||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | Quarters Ended September 30, | 2025 | % Points Change | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| $ 5,117 | $ 11,438 | 44.7 | % | $ 5,156 | $ 11,593 | 44.5 | % | $ 5,159 | $ 11,620 | 44.4 | % | Total PMI | $ 4,670 | $ 10,845 | 43.1 | % | 1.6 | 1.4 | 1.3 | |||||||||||||||||||||||||||||||||||||||||||
| 2026 | Nine Months Ended September 30, | 2025 | % Points Change | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| $ 14,058 | $ 32,776 | 42.9 | % | $ 13,679 | $ 32,042 | 42.7 | % | $ 13,684 | $ 32,086 | 42.6 | % | Total PMI | $ 12,706 | $ 30,286 | 42.0 | % | 0.9 | 0.7 | 0.6 | |||||||||||||||||||||||||||||||||||||||||||
| (1) For the calculation of Adjusted Operating Income and Adjusted Operating Income excluding currency and acquisitions / divestitures refer to Schedule 12 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (2) For the calculation of Net Revenues excluding currency and acquisitions / divestitures refer to Schedule 3 and Schedule 4 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
21
| Schedule 14 | |||||||||||||||||||||||||||||||||||
| PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries | |||||||||||||||||||||||||||||||||||
| Condensed Statements of Earnings | |||||||||||||||||||||||||||||||||||
| ($ in millions, except per share data) / (Unaudited) | |||||||||||||||||||||||||||||||||||
| Quarters Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | Change Fav./(Unfav.) | 2026 | 2025 | Change Fav./(Unfav.) | ||||||||||||||||||||||||||||||
| $ 11,438 | $ 10,845 | 5.5 | % | Net Revenues | $ 32,776 | $ 30,286 | 8.2 | % | |||||||||||||||||||||||||||
| 3,584 | 3,484 | (2.9) | % | Cost of sales | 10,358 | 9,789 | (5.8) | % | |||||||||||||||||||||||||||
| 7,854 | 7,361 | 6.7 | % | Gross profit | 22,418 | 20,497 | 9.4 | % | |||||||||||||||||||||||||||
| 2,993 | 3,058 | 2.1 | % | Marketing, administration and research costs | 8,831 | 8,474 | (4.2) | % | |||||||||||||||||||||||||||
| — | — | — | % | Impairment of goodwill | — | 41 | 100.0 | % | |||||||||||||||||||||||||||
| (5) | 40 | +100% | Corporate expenses and other | 298 | 463 | 35.6 | % | ||||||||||||||||||||||||||||
| 4,866 | 4,263 | 14.1 | % | Operating Income | 13,289 | 11,519 | 15.4 | % | |||||||||||||||||||||||||||
| 199 | 230 | 13.5 | % | Interest expense, net | 679 | 748 | 9.2 | % | |||||||||||||||||||||||||||
| 73 | 14 | -(100)% | Pension and other employee benefit costs | 63 | 37 | (70.3) | % | ||||||||||||||||||||||||||||
| 4,594 | 4,019 | 14.3 | % | Earnings before income taxes | 12,547 | 10,734 | 16.9 | % | |||||||||||||||||||||||||||
| 986 | 751 | (31.3) | % | Provision for income taxes | 2,617 | 2,062 | (26.9) | % | |||||||||||||||||||||||||||
| — | — | — | % | Impairment related to the RBH equity investment | 511 | — | — | % | |||||||||||||||||||||||||||
| 86 | (345) | -(100)% | Equity investments and securities (income)/loss, net | 330 | (926) | -(100)% | |||||||||||||||||||||||||||||
| 3,522 | 3,613 | (2.5) | % | Net Earnings | 9,089 | 9,598 | (5.3) | % | |||||||||||||||||||||||||||
| 209 | 135 | (54.8) | % | Net Earnings attributable to noncontrolling interests | 521 | 391 | (33.2) | % | |||||||||||||||||||||||||||
| $ 3,313 | $ 3,478 | (4.7) | % | Net Earnings attributable to PMI | $ 8,568 | $ 9,207 | (6.9) | % | |||||||||||||||||||||||||||
| Per share data: (1) | |||||||||||||||||||||||||||||||||||
| $ 2.12 | $ 2.23 | (4.9) | % | Basic Earnings Per Share | $ 5.49 | $ 5.90 | (6.9) | % | |||||||||||||||||||||||||||
| $ 2.12 | $ 2.23 | (4.9) | % | Diluted Earnings Per Share | $ 5.48 | $ 5.89 | (7.0) | % | |||||||||||||||||||||||||||
| (1) Net Earnings and weighted-average shares used in the basic and diluted Earnings Per Share computations for the quarters ended September 30, 2026 and 2025 are shown on Schedule 1, Footnote 1 | |||||||||||||||||||||||||||||||||||
22
| Schedule 15 | ||||||||||||||||||||
| PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries | ||||||||||||||||||||
| Condensed Balance Sheets | ||||||||||||||||||||
| ($ in millions) / (Unaudited) | ||||||||||||||||||||
| September 30, | December 31, | |||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||
| Assets | ||||||||||||||||||||
| Cash and cash equivalents | $ | 6,683 | $ | 4,872 | ||||||||||||||||
| All other current assets | 19,105 | 19,491 | ||||||||||||||||||
| Property, plant and equipment, net | 8,369 | 8,397 | ||||||||||||||||||
| Goodwill | 16,789 | 17,264 | ||||||||||||||||||
| Other intangible assets, net | 9,824 | 10,884 | ||||||||||||||||||
| Equity investments | 1,975 | 2,891 | ||||||||||||||||||
| Other assets | 3,985 | 5,386 | ||||||||||||||||||
| Total assets | $ | 66,730 | $ | 69,185 | ||||||||||||||||
| Liabilities and Stockholders' (Deficit) Equity | ||||||||||||||||||||
| Short-term borrowings | $ | 2,525 | $ | 168 | ||||||||||||||||
| Current portion of long-term debt | 3,328 | 3,533 | ||||||||||||||||||
| All other current liabilities | 19,342 | 21,726 | ||||||||||||||||||
| Long-term debt | 41,709 | 45,134 | ||||||||||||||||||
| Deferred income taxes | 1,983 | 2,065 | ||||||||||||||||||
| Other long-term liabilities | 3,788 | 4,587 | ||||||||||||||||||
| Total liabilities | 72,675 | 77,213 | ||||||||||||||||||
| Total PMI stockholders' deficit | (7,937) | (9,994) | ||||||||||||||||||
| Noncontrolling interests | 1,992 | 1,966 | ||||||||||||||||||
| Total stockholders' (deficit) equity | (5,945) | (8,028) | ||||||||||||||||||
| Total liabilities and stockholders' (deficit) equity | $ | 66,730 | $ | 69,185 | ||||||||||||||||
23
| Schedule 16 | ||||||||||||||||||||||||||||||||||||||||||||
| PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries | ||||||||||||||||||||||||||||||||||||||||||||
| Reconciliation of Non-GAAP Measures | ||||||||||||||||||||||||||||||||||||||||||||
| Calculation of Total Debt to Adjusted EBITDA and Net Debt to Adjusted EBITDA Ratios | ||||||||||||||||||||||||||||||||||||||||||||
| ($ in millions, except ratios) / (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
| Year Ended September 30, 2026 | Year Ended December 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||
| October ~ December | January ~ September | 12 months | ||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2026 | rolling | ||||||||||||||||||||||||||||||||||||||||||
| Net Earnings | $ 2,250 | $ 9,089 | $ 11,339 | $ 11,848 | ||||||||||||||||||||||||||||||||||||||||
| Equity investments and securities (income)/loss, net | 221 | 330 | 551 | (705) | ||||||||||||||||||||||||||||||||||||||||
| Provision for income taxes | 675 | 2,617 | 3,292 | 2,737 | ||||||||||||||||||||||||||||||||||||||||
| Interest expense, net | 218 | 679 | 897 | 966 | ||||||||||||||||||||||||||||||||||||||||
| Impairment related to the RBH equity investment | — | 511 | 511 | — | ||||||||||||||||||||||||||||||||||||||||
| Depreciation, amortization and impairment of goodwill | 521 | 1,534 | 2,055 | 2,037 | ||||||||||||||||||||||||||||||||||||||||
| Restructuring charges and Others (1) | 92 | 93 | 185 | 492 | ||||||||||||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ 3,977 | $ 14,853 | $ 18,830 | $ 17,375 | ||||||||||||||||||||||||||||||||||||||||
| September 30, | December 31, | |||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||||||||||||||||||||
| Short-term borrowings | $ 2,525 | $ 168 | ||||||||||||||||||||||||||||||||||||||||||
| Current portion of long-term debt | 3,328 | 3,533 | ||||||||||||||||||||||||||||||||||||||||||
| Long-term debt | 41,709 | 45,134 | ||||||||||||||||||||||||||||||||||||||||||
| Total Debt | $ 47,562 | $ 48,835 | ||||||||||||||||||||||||||||||||||||||||||
| Cash and cash equivalents | 6,683 | 4,872 | ||||||||||||||||||||||||||||||||||||||||||
| Net Debt | $ 40,879 | $ 43,963 | ||||||||||||||||||||||||||||||||||||||||||
| Ratios: | ||||||||||||||||||||||||||||||||||||||||||||
| Total Debt to Adjusted EBITDA | 2.53 | 2.81 | ||||||||||||||||||||||||||||||||||||||||||
| Net Debt to Adjusted EBITDA | 2.17 | 2.53 | ||||||||||||||||||||||||||||||||||||||||||
| (1) For the period October 2025 to December 2025 "Others" include loss on expected sale of consumer accessories and other businesses ($94 million). For the period January 2026 to September 2026 "Others" include Dutch pension plan buy-out loss ($74 million) partly offset by Egypt sales tax settlement adjustment ($15 million). | ||||||||||||||||||||||||||||||||||||||||||||
24
| Schedule 17 | ||||||||||||||||||||||||||||||||||||||
| PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries | ||||||||||||||||||||||||||||||||||||||
| Operating Cash Flow | ||||||||||||||||||||||||||||||||||||||
| ($ in millions) / (Unaudited) | ||||||||||||||||||||||||||||||||||||||
| Quarters Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | % Change | 2026 | 2025 | % Change | |||||||||||||||||||||||||||||||||
| $ 5,352 | $ 4,462 | 19.9 | % | Net cash provided by operating activities (1) | $ 10,445 | $ 7,524 | 38.8 | % | ||||||||||||||||||||||||||||||
| (1) Operating cash flow | ||||||||||||||||||||||||||||||||||||||
25