菲利普莫里斯国际（PM）Q3调整后EPS增长5.4%但全年指引仅按汇率微调、Q4加大美国ZYN投入，盘前跌约2.5%

----- pm-20261021.htm -----
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
Philip Morris International Inc.
(Exact name of registrant as specified in its charter)
Virginia
1-33708
13-3435103
(State or other jurisdiction
of incorporation)
(Commission File Number)
(I.R.S. Employer
Identification No.)
677 Washington Blvd, Ste. 1100
Stamford
Connecticut
06901
(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
Common Stock, no par value
PM
New York Stock Exchange
3.125% Notes due 2027
PM27
New York Stock Exchange
3.125% Notes due 2028
PM28
New York Stock Exchange
2.875% Notes due 2029
PM29
New York Stock Exchange
3.375% Notes due 2029
PM29A
New York Stock Exchange
2.750% Notes due 2029
PM29D
New York Stock Exchange
3.750% Notes due 2031
PM31B
New York Stock Exchange
0.800% Notes due 2031
PM31
New York Stock Exchange
3.250% Notes due 2032
PM32
New York Stock Exchange
3.125% Notes due 2033
PM33
New York Stock Exchange
2.000% Notes due 2036
PM36
New York Stock Exchange
1.875% Notes due 2037
PM37A
New York Stock Exchange
6.375% Notes due 2038
PM38
New York Stock Exchange
1.450% Notes due 2039
PM39
New York Stock Exchange
4.375% Notes due 2041
PM41
New York Stock Exchange
4.500% Notes due 2042
PM42
New York Stock Exchange
3.875% Notes due 2042
PM42A
New York Stock Exchange
4.125% Notes due 2043
PM43
New York Stock Exchange
4.875% Notes due 2043
PM43A
New York Stock Exchange
4.250% Notes due 2044
PM44
New York Stock Exchange
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.
99.1
Philip Morris International Inc. Press Release, dated October 21, 2026 (furnished pursuant to Item 2.02)
.
99.2
Glossary of Key Terms, Definitions, Explanatory Notes, Select Financial Information and Reconciliations of Non-GAAP Financial Measures (furnished pursuant to Item 2.02)
.
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

----- earningsreleasepm-ex991xq3.htm -----
EX-99.1
2
earningsreleasepm-ex991xq3.htm
EX-99.1
Document
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
$2.24
5.8%
- 4 -
First Nine-Months 2026 Performance Highlights
Shipment Volume
(billion equivalent units)
PMI
International Smoke-Free
International Combustibles
U.S.
YTD
vs. PY
YTD
vs. PY
YTD
vs. PY
YTD
vs. PY
Total
595.6
0.5%
133.3
7.4%
452.2
(1.2)%
10.1
(5.8)%
Cigarettes
452.2
(1.2)%
452.2
(1.2)%
SFP
143.4
6.4%
133.3
7.4%
10.1
(5.8)%
HTU
124.5
6.7%
124.5
6.7%
–
+100%
Oral SFP
14.9
(5.3)%
4.8
(4.0)%
10.0
(5.8)%
E-Vapor
4.0
68.1%
4.0
68.1%
"-" indicates zero volumes or less than 50 million units
PMI
International Smoke-Free
International Combustibles
U.S.
Net Revenues
($ 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%
- 5 -
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.
- 8 -
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.
- 9 -
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.
- 10 -
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.
- 11 -
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
- 12 -
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
- 13 -
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.
- 14 -

----- glossaryselectfininfoandno.htm -----
EX-99.2
3
glossaryselectfininfoandno.htm
EX-99.2
Document
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.
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 years
1
) 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 years
1
1
outside 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 years
1
) users of e-Vapor products, who consumed at least one of PMI
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 years
1
) 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.
1
1
Minimum 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