10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                     to                    

Commission File Number 1-08940

Altria Group, Inc.

(Exact name of registrant as specified in its charter)

Virginia			13-3260245
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
6601 West Broad Street,	Richmond,	Virginia	23230
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code (804) 274-2200 

 Former name, former address and former fiscal year, if changed since last report

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbols	Name of each exchange on which registered
Common Stock, $0.33 1/3 par value	MO	New York Stock Exchange
1.700% Notes due 2025	MO25	New York Stock Exchange
2.200% Notes due 2027	MO27	New York Stock Exchange
3.125% Notes due 2031	MO31	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes   þ     No   ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes   þ    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	þ	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		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. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes  ☐  No   þ

At October 17, 2023, there were 1,768,646,674 shares outstanding of the registrant’s common stock, par value $0.33 1/3 per share.

ALTRIA GROUP, INC.

TABLE OF CONTENTS

		Page No.
PART I -	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets at September 30, 2023 and December 31, 2022	3
	Condensed Consolidated Statements of Earnings for the Nine and Three Months Ended September 30, 2023 and 2022	5
	Condensed Consolidated Statements of Comprehensive Earnings for the Nine and Three Months Ended September 30, 2023 and 2022	6
	Condensed Consolidated Statements of Stockholders’ Equity (Deficit) for the Nine Months Ended September 30, 2023 and 2022	7
	Three Months Ended September 30, 2023 and 2022	8
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2023 and 2022	9
	Notes to Condensed Consolidated Financial Statements	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	37
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	70
Item 4.	Controls and Procedures	70
PART II -	OTHER INFORMATION
Item 1.	Legal Proceedings	70
Item 1A.	Risk Factors	71
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	71
Item 5.	Other Information	71
Item 6.	Exhibits	72
Signature	Signature	73

2

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Altria Group, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in millions of dollars)

(Unaudited)

______________________________

	September 30, 2023		December 31, 2022
Assets
Cash and cash equivalents	$	1,537	$	4,030
Receivables:
Receivable from the sale of IQOS System commercialization rights	—		1,721
Other	57		48
Inventories:
Leaf tobacco	606		704
Other raw materials	212		186
Work in process	29		24
Finished product	327		266
	1,174		1,180
Other current assets	622		241
Total current assets	3,390		7,220
Property, plant and equipment, at cost	4,526		4,427
Less accumulated depreciation	2,897		2,819
	1,629		1,608
Goodwill	6,791		5,177
Other intangible assets, net	13,727		12,384
Investments in equity securities ($0 million and $250 million at September 30, 2023 and December 31, 2022, respectively, measured at fair value)	9,907		9,600
Other assets	1,025		965
Total Assets	$	36,469	$	36,954

See notes to condensed consolidated financial statements.

3

Altria Group, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets (Continued)

(in millions of dollars, except share and per share data)

(Unaudited)

________________________________________________

	September 30, 2023		December 31, 2022
Liabilities
Current portion of long-term debt	$	1,121	$	1,556
Accounts payable	490		552
Accrued liabilities:
Marketing	663		599
Settlement charges	2,388		2,925
Other	1,277		1,299
Deferred gain from the sale of IQOS System commercialization rights	2,700		—
Dividends payable	1,742		1,685
Total current liabilities	10,381		8,616
Long-term debt	23,977		25,124
Deferred income taxes	2,527		2,897
Accrued pension costs	127		133
Accrued postretirement health care costs	1,096		1,083
Deferred gain from the sale of IQOS System commercialization rights	—		2,700
Other liabilities	1,718		324
Total liabilities	39,826		40,877
Contingencies (Note 13)
Stockholders’ Equity (Deficit)
Common stock, par value $0.33 1/3 per share (2,805,961,317 shares issued)	935		935
Additional paid-in capital	5,895		5,887
Earnings reinvested in the business	30,767		29,792
Accumulated other comprehensive losses	(2,471)		(2,771)
Cost of repurchased stock (1,036,080,497 shares at September 30, 2023 and 1,020,427,195 shares at December 31, 2022)	(38,533)		(37,816)
Total stockholders’ equity (deficit) attributable to Altria	(3,407)		(3,973)
Noncontrolling interests	50		50
Total stockholders’ equity (deficit)	(3,357)		(3,923)
Total Liabilities and Stockholders’ Equity (Deficit)	$	36,469	$	36,954

See notes to condensed consolidated financial statements.

4

Altria Group, Inc. and Subsidiaries

Condensed Consolidated Statements of Earnings

(in millions of dollars, except per share data)

(Unaudited)

_____________________________________ 

	For the Nine Months Ended September 30,				For the Three Months Ended September 30,
	2023		2022		2023		2022
Net revenues	$	18,508	$	18,985	$	6,281	$	6,550
Cost of sales	4,693		4,869		1,578		1,715
Excise taxes on products	3,030		3,380		1,004		1,138
Gross profit	10,785		10,736		3,699		3,697
Marketing, administration and research costs	2,034		1,635		610		585
Operating income	8,751		9,101		3,089		3,112
Interest and other debt expense, net	758		832		272		271
Net periodic benefit income, excluding service cost	(95)		(137)		(33)		(44)
(Income) losses from investments in equity securities	(105)		3,707		(58)		2,478
Loss on Cronos-related financial instruments	—		14		—		—
Earnings before income taxes	8,193		4,685		2,908		407
Provision for income taxes	2,123		1,611		742		183
Net earnings	$	6,070	$	3,074	$	2,166	$	224
Per share data:
Basic and diluted earnings per share	$	3.40	$	1.69	$	1.22	$	0.12

See notes to condensed consolidated financial statements.

5

Altria Group, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Earnings

(in millions of dollars)

(Unaudited)

_____________________

	For the Nine Months Ended September 30,				For the Three Months Ended September 30,
	2023		2022		2023		2022
Net earnings	$	6,070	$	3,074	$	2,166	$	224
Other comprehensive earnings (losses), net of deferred income taxes:
Benefit plans	(16)		48		(5)		17
ABI	302		637		236		(6)
Currency translation adjustments and other	14		(12)		7		(17)
Other comprehensive earnings (losses), net of deferred income taxes	300		673		238		(6)
Comprehensive earnings	$	6,370	$	3,747	$	2,404	$	218

See notes to condensed consolidated financial statements.

6

Altria Group, Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

for the Nine Months Ended September 30, 2023 and 2022

(in millions of dollars, except per share data)

(Unaudited)

_______________________________________

	Attributable to Altria
	Common Stock		Additional Paid-in Capital		Earnings Reinvested in the Business		Accumulated Other Comprehensive Losses		Cost of Repurchased Stock		Non- controlling Interests		Total Stockholders’ Equity (Deficit)
Balances, December 31, 2022	$	935	$	5,887	$	29,792	$	(2,771)	$	(37,816)	$	50	$	(3,923)
Net earnings	—		—		6,070		—		—		—		6,070
Other comprehensive earnings (losses), net of deferred income taxes	—		—		—		300		—		—		300
Stock award activity	—		8		—		—		20		—		28
Cash dividends declared ($2.86 per share)	—		—		(5,095)		—		—		—		(5,095)
Repurchases of common stock	—		—		—		—		(732)		—		(732)
Other	—		—		—		—		(5)		—		(5)
Balances, September 30, 2023	$	935	$	5,895	$	30,767	$	(2,471)	$	(38,533)	$	50	$	(3,357)

	Common Stock		Additional Paid-in Capital		Earnings Reinvested in the Business		Accumulated Other Comprehensive Losses		Cost of Repurchased Stock		Total Stockholders’ Equity (Deficit)
Balances, December 31, 2021	$	935	$	5,857	$	30,664	$	(3,056)	$	(36,006)	$	(1,606)
Net earnings	—		—		3,074		—		—		3,074
Other comprehensive earnings (losses), net of deferred income taxes	—		—		—		673		—		673
Stock award activity	—		16		—		—		15		31
Cash dividends declared ($2.74 per share)	—		—		(4,953)		—		—		(4,953)
Repurchases of common stock	—		—		—		—		(1,451)		(1,451)
Balances, September 30, 2022	$	935	$	5,873	$	28,785	$	(2,383)	$	(37,442)	$	(4,232)

See notes to condensed consolidated financial statements.

7

Altria Group, Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

for the Three Months Ended September 30, 2023 and 2022

(in millions of dollars, except per share data)

(Unaudited)

_______________________________________

	Attributable to Altria
	Common Stock		Additional Paid-in Capital		Earnings Reinvested in the Business		Accumulated Other Comprehensive Losses		Cost of Repurchased Stock		Non- controlling Interests		Total Stockholders’ Equity (Deficit)
Balances, June 30, 2023	$	935	$	5,880	$	30,340	$	(2,709)	$	(38,273)	$	50	$	(3,777)
Net earnings	—		—		2,166		—		—		—		2,166
Other comprehensive earnings (losses), net of deferred income taxes	—		—		—		238		—		—		238
Stock award activity	—		15		—		—		—		—		15
Cash dividends declared ($0.98 per share)	—		—		(1,739)		—		—		—		(1,739)
Repurchases of common stock	—		—		—		—		(260)		—		(260)
Balances, September 30, 2023	$	935	$	5,895	$	30,767	$	(2,471)	$	(38,533)	$	50	$	(3,357)

	Common Stock		Additional Paid-in Capital		Earnings Reinvested in the Business		Accumulated Other Comprehensive Losses		Cost of Repurchased Stock		Total Stockholders’ Equity (Deficit)
Balances, June 30, 2022	$	935	$	5,861	$	30,252	$	(2,377)	$	(37,074)	$	(2,403)
Net earnings	—		—		224		—		—		224
Other comprehensive earnings (losses), net of deferred income taxes	—		—		—		(6)		—		(6)
Stock award activity	—		12		—		—		—		12
Cash dividends declared ($0.94 per share)	—		—		(1,691)		—		—		(1,691)
Repurchases of common stock	—		—		—		—		(368)		(368)
Balances, September 30, 2022	$	935	$	5,873	$	28,785	$	(2,383)	$	(37,442)	$	(4,232)

See notes to condensed consolidated financial statements.

8

Altria Group, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in millions of dollars)

(Unaudited)

_____________________

For the Nine Months Ended September 30,	2023		2022
Cash Provided by (Used in) Operating Activities
Net earnings	$	6,070	$	3,074
Adjustments to reconcile net earnings to operating cash flows:
Depreciation and amortization	194		163
Deferred income tax provision (benefit)	(575)		(550)
Unrecognized tax benefit (1)	1,173		21
(Income) losses from investments in equity securities	(105)		3,707
Dividends from ABI	163		104
Loss on Cronos-related financial instruments	—		14
Cash effects of changes: (2)
Receivables	19		(5)
Inventories	26		88
Accounts payable	(47)		(27)
Income taxes	(210)		49
Accrued liabilities and other current assets	(210)		(382)
Accrued settlement charges	(537)		(618)
Pension plan contributions	(14)		(11)
Pension and postretirement, net	(97)		(110)
Other, net	210		120
Net cash provided by (used in) operating activities	6,060		5,637
Cash Provided by (Used in) Investing Activities
Capital expenditures	(143)		(147)
Proceeds from the sale of IQOS System commercialization rights	1,700		—
Acquisition of NJOY, net of cash acquired	(2,751)		—
Other, net	(23)		(68)
Net cash provided by (used in) investing activities	$	(1,217)	$	(215)

(1) 2023 relates to unrecognized tax benefit from the ordinary loss for cash tax purposes with respect to a portion of our tax basis associated with our former investment in JUUL. For further discussion, see Note 12. Income Taxes.

(2) 2023 amounts are net of the effects from the NJOY Transaction. For further details, see Note 2. Acquisition of NJOY.

See notes to condensed consolidated financial statements.

9

Altria Group, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Continued)

(in millions of dollars)

(Unaudited)

_____________________

For the Nine Months Ended September 30,	2023		2022
Cash Provided by (Used in) Financing Activities
Proceeds from short-term borrowings	$	2,000	$	—
Repayment of short-term borrowings	(2,000)		—
Long-term debt repaid	(1,566)		(1,105)
Repurchases of common stock	(732)		(1,451)
Dividends paid on common stock	(5,040)		(4,908)
Other, net	(15)		(12)
Net cash provided by (used in) financing activities	(7,353)		(7,476)
Cash, cash equivalents and restricted cash:
Increase (decrease)	(2,510)		(2,054)
Balance at beginning of period	4,091		4,594
Balance at end of period	$	1,581	$	2,540
The following table provides a reconciliation of cash, cash equivalents and restricted cash (1) to the amounts reported on our condensed consolidated balance sheets:
	At September 30, 2023		At December 31, 2022
Cash and cash equivalents	$	1,537	$	4,030
Restricted cash included in other current assets	10		15
Restricted cash included in other assets	34		46
Cash, cash equivalents and restricted cash	$	1,581	$	4,091

(1) Restricted cash consisted primarily of cash deposits collateralizing appeal bonds posted by PM USA to obtain stays of judgments pending appeals. See Note 13. Contingencies.

See notes to condensed consolidated financial statements.

10

Altria Group, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 1. Background and Basis of Presentation

When used in these notes, the terms “Altria,” “we,” “us” and “our” refer to either (i) Altria Group, Inc. and its consolidated subsidiaries or (ii) Altria Group, Inc. only and not its consolidated subsidiaries, as appropriate in the context.

▪Background: At September 30, 2023, our wholly owned subsidiaries included Philip Morris USA Inc. (“PM USA”), which is engaged in the manufacture and sale of cigarettes in the United States; John Middleton Co. (“Middleton”), which is engaged in the manufacture and sale of machine-made large cigars and pipe tobacco and is a wholly owned subsidiary of PM USA; UST LLC (“UST”), which through its wholly owned subsidiary U.S. Smokeless Tobacco Company LLC (“USSTC”), is engaged in the manufacture and sale of moist smokeless tobacco products (“MST”) and snus products; Helix Innovations LLC (“Helix”), which operates in the United States and Canada, and Helix Innovations GmbH and its affiliates (“Helix ROW”), which operate internationally in the rest-of-world, are engaged in the manufacture and sale of oral nicotine pouches; and NJOY, LLC (“NJOY”), which is engaged in the manufacture and sale of e-vapor products. Other wholly owned subsidiaries included Altria Group Distribution Company (“AGDC”), which provides sales and distribution services to our domestic operating companies; and Altria Client Services LLC (“ALCS”), which provides various support services to our companies in areas such as legal, regulatory, research and product development, consumer engagement, finance, human resources and external affairs. Our access to the operating cash flows of our subsidiaries consists of cash received from the payment of dividends and distributions, and the payment of interest on intercompany loans by our subsidiaries. At September 30, 2023, our significant subsidiaries were not limited by contractual obligations in their ability to pay cash dividends or make other distributions with respect to their equity interests.

As discussed in Note 2. Acquisition of NJOY, on June 1, 2023, we completed our acquisition of NJOY Holdings, Inc. (“NJOY Holdings”), the parent of NJOY. As a result of the acquisition, NJOY became a wholly owned subsidiary of Altria.

At September 30, 2023, we also owned a 75% economic interest in Horizon Innovations LLC (“Horizon”), a joint venture with Japan Tobacco, Inc., which owned the remaining 25% economic interest. Horizon is structured to exist in perpetuity and is responsible for the U.S. marketing and commercialization of heated tobacco stick products.

In March 2023, we entered into a stock transfer agreement with JUUL Labs, Inc. (“Stock Transfer Agreement”) pursuant to which we transferred to JUUL Labs, Inc. (“JUUL”) all of our beneficially owned JUUL equity securities. In exchange, we received a non-exclusive, irrevocable global license to certain of JUUL’s heated tobacco intellectual property (“JUUL Heated Tobacco IP”). Prior to the exchange, we accounted for our investment in JUUL at fair value.

At September 30, 2023, we had investments in Anheuser-Busch InBev SA/NV (“ABI”) and Cronos Group Inc. (“Cronos”), which we account for under the equity method of accounting using a one-quarter lag.

For further discussion of our investments in equity securities, see Note 5. Investments in Equity Securities.

▪Dividends and Share Repurchases: In August 2023, our Board of Directors (“Board of Directors” or “Board”) approved a 4.3% increase in the quarterly dividend rate to $0.98 per share of our common stock versus the previous rate of $0.94 per share. The current annualized dividend rate is $3.92. Future dividend payments remain subject to the discretion of our Board.

In January 2021, our Board of Directors authorized a $2.0 billion share repurchase program that it expanded to $3.5 billion in October 2021 (as expanded, the “January 2021 share repurchase program”). We completed the January 2021 share repurchase program in December 2022.

In January 2023, our Board of Directors authorized a new $1.0 billion share repurchase program (the “January 2023 share repurchase program”). At September 30, 2023, we had $268 million remaining under the January 2023 share repurchase program. The timing of share repurchases under this program depends upon marketplace conditions and other factors, and the program remains subject to the discretion of our Board.

11

Our share repurchase activity was as follows:

	For the Nine Months Ended September 30,				For the Three Months Ended September 30,
(in millions, except per share data)	2023		2022		2023		2022
Total number of shares repurchased	16.3		29.9		5.9		8.5
Aggregate cost of shares repurchased	$	732	$	1,451	$	260	$	368
Average price per share of shares repurchased	$	44.97	$	48.60	$	44.26	$	43.68

▪Basis of Presentation: Our interim condensed consolidated financial statements are unaudited. Our management believes that all adjustments necessary for a fair statement of the interim results presented have been reflected in our interim condensed consolidated financial statements. All such adjustments were of a normal recurring nature. Net revenues and net earnings for any interim period are not necessarily indicative of results that may be expected for the entire year.

These statements should be read in conjunction with our audited consolidated financial statements and related notes, which appear in our Annual Report on Form 10-K for the year ended December 31, 2022.

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

On January 1, 2023, we adopted Accounting Standards Update (“ASU”) 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU No. 2021-08”). This guidance updates how an entity recognizes and measures contract assets and contract liabilities acquired in a business combination. Our adoption of ASU No. 2021-08 had no impact on our condensed consolidated financial statements or related disclosures.

Additionally, on January 1, 2023, we adopted ASU 2022-04, Liabilities- Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations (“ASU No. 2022-04”). This guidance requires that a buyer in a supplier finance program disclose sufficient qualitative and quantitative information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period and potential magnitude. As of and for the nine months ended September 30, 2023, our adoption of ASU No. 2022-04 had no material impact on our condensed consolidated financial statements or related disclosures.

For a description of issued accounting guidance applicable to, but not yet adopted by, us, see Note 14. New Accounting Guidance Not Yet Adopted.

Note 2. Acquisition of NJOY

On June 1, 2023, we acquired NJOY Holdings (“NJOY Transaction”), which provided us with full global ownership of NJOY’s e-vapor product portfolio, including NJOY ACE, currently the only pod-based e-vapor product with market authorizations from the U.S. Food and Drug Administration (“FDA”). The total consideration for the NJOY Transaction of approximately $2.9 billion, consisted of approximately $2.75 billion in cash payments (net of cash acquired) plus the fair value of up to $500 million in additional cash payments that are contingent on receipt of FDA authorizations with respect to certain NJOY products. The fair value of these contingent payments on the acquisition date, at June 30, 2023 and at September 30, 2023 was approximately $130 million, which is included in the total consideration.

We funded the NJOY Transaction cash payments through a combination of a $2.0 billion term loan facility, the issuance of commercial paper and available cash. For further discussion regarding the term loan facility, see Note 11. Debt.

We accounted for this acquisition as a business combination. NJOY’s financial position and results of operations beginning June 1, 2023 have been consolidated with our consolidated financial results and included in the all other category.

The fair value estimates of the assets acquired and liabilities assumed are preliminary and subject to adjustments during the measurement period (up to one year following the acquisition date). The primary areas of accounting for the NJOY Transaction that are not yet finalized relate to the fair value of certain intangible assets acquired, contingent liabilities, residual goodwill and any related tax impact. During the measurement period, we will adjust preliminary valuations assigned to assets and liabilities if new information is obtained about facts and circumstances that existed as of the NJOY Transaction date, that, if known, would have resulted in revised values for these items as of that date. The impact of all changes, if any, that do not qualify as measurement period adjustments will be included in current period earnings.

12

The following amounts represent the preliminary estimates for purchase price allocation to assets acquired and liabilities assumed in the NJOY Transaction, which will be finalized by the end of the measurement period:

(in millions)
Cash and cash equivalents	$	22
Receivables	7
Inventories	19
Other assets	7
Property, plant and equipment	16
Other intangible assets:
Developed technology (amortizable)	1,000
Trademarks (amortizable)	230
Supplier agreements (amortizable)	180
Accounts payable	(7)
Accrued liabilities	(20)
Deferred income taxes	(167)
Total identifiable net assets	1,287
Total consideration	2,901
Goodwill	$	1,614

The excess of the total consideration over the identifiable net assets acquired in the NJOY Transaction primarily reflects the value of future growth opportunities in the e-vapor category. None of the goodwill or other intangible assets will be deductible for tax purposes.

The significant assumptions used in determining the preliminary fair values of the identifiable intangible assets included revenue growth rates, operating margins, the assessment of acquired technology life cycles, discount rates, as well as other factors. We determined the preliminary fair values of the identifiable intangibles assets using an income approach. The fair value measurements were primarily based on significant inputs that are not observable in the market, such as discounted cash flow analyses, and thus are classified in Level 3 of the fair value hierarchy. We amortize the intangible assets over a weighted-average period of approximately 17 years.

In determining the estimated fair value of contingent payments, we made certain judgments, estimates and assumptions, the most significant of which was the likelihood of certain potential regulatory outcomes. Contingent payments are classified in Level 3 of the fair value hierarchy.

Costs incurred for the NJOY Transaction have been and will be recognized as expenses in the period in which the costs are incurred. We incurred costs related to the NJOY Transaction of $63 million and $14 million for the nine and three months ended September 30, 2023, respectively. For the nine months ended September 30, 2023, substantially all of these costs were acquisition-related costs, consisting primarily of transaction costs and financing fees, which were included in corporate expense and interest and other debt expense, net, respectively, in our condensed consolidated statement of earnings.

Note 3. Revenues from Contracts with Customers

We disaggregate net revenues based on product type. For further discussion, see Note 10. Segment Reporting.

We calculate substantially all cash discounts, offered to customers for prompt payment, as a flat rate per unit based on agreed-upon payment terms and record receivables net of the cash discounts on our condensed consolidated balance sheets.

We record payments received by our businesses in advance of product shipment as deferred revenue. These payments are included in other accrued liabilities on our condensed consolidated balance sheets until control of such products is obtained by the customer. Deferred revenue from contracts with customers was $284 million and $252 million at September 30, 2023 and December 31, 2022, respectively. When cash is received in advance of product shipment, our companies satisfy their performance obligations within three days of receiving payment. At September 30, 2023 and December 31, 2022, there were no differences between amounts recorded as deferred revenue from contracts with customers and amounts subsequently recognized as revenue.

Receivables were $57 million and $48 million (excluding the 2022 receivable from the sale of IQOS System commercialization rights) at September 30, 2023 and December 31, 2022, respectively. At September 30, 2023 and December 31, 2022, there were no expected differences between amounts recorded and subsequently received, and we did not record an allowance for credit losses against these receivables.

13

We record an allowance for returned goods, which is included in other accrued liabilities on our condensed consolidated balance sheets. It is USSTC’s policy to accept authorized sales returns from its customers for products that have passed the freshness date printed on product packaging due to the limited shelf life of USSTC’s MST and snus products. We record estimated sales returns, which are based principally on historical volume and return rates, as a reduction to revenues. Actual sales returns will differ from estimated sales returns to the extent actual results differ from estimated assumptions. We reflect differences between actual and estimated sales returns in the period in which the actual amounts become known. These differences, if any, have not had a material impact on our condensed consolidated financial statements. All returned goods are destroyed upon return and not included in inventory. Consequently, we do not record an asset for USSTC’s right to recover goods from customers upon return.

Sales incentives include variable payments related to goods sold by our businesses. We include estimates of variable consideration as a reduction to revenues upon shipment of goods to customers. The sales incentives that require significant estimates and judgments are as follows:

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

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

These estimates primarily include estimated wholesale to retail sales volume and historical acceptance rates. Actual payments will differ from estimated payments to the extent actual results differ from estimated assumptions. Differences between actual and estimated payments are reflected in the period such information becomes available. These differences, if any, have not had a material impact on our condensed consolidated financial statements.

Note 4. Goodwill and Other Intangible Assets, net

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

	Goodwill				Other Intangible Assets, net
(in millions)	September 30, 2023		December 31, 2022		September 30, 2023		December 31, 2022
Smokeable products segment	$	99	$	99	$	2,970	$	2,989
Oral tobacco products segment	5,078		5,078		9,073		9,097
Other	1,614		—		1,684		298
Total	$	6,791	$	5,177	$	13,727	$	12,384

Other intangible assets consisted of the following:

	September 30, 2023				December 31, 2022
(in millions)	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Indefinite-lived intangible assets	$	11,443	$	—	$	11,443	$	—
Definite-lived intangible assets	2,841		557		1,411		470
Total other intangible assets	$	14,284	$	557	$	12,854	$	470

At September 30, 2023, substantially all of our indefinite-lived intangible assets consisted of our trademarks from our 2009 acquisition of UST ($8.8 billion) and 2007 acquisition of Middleton ($2.6 billion). Definite-lived intangible assets, consisting primarily of intellectual property (which includes developed technology), certain cigarette trademarks, e-vapor trademarks, customer relationships and supplier agreements are amortized over a weighted-average period of approximately 18 years. Pre-tax amortization expense for definite-lived intangible assets was $87 million and $54 million for the nine months ended September 30, 2023 and 2022, respectively, and $42 million and $19 million for the three months ended September 30, 2023 and 2022, respectively. We estimate our annualized amortization expense, which includes the impact of the NJOY Transaction, for each of the next five years to be approximately $170 million, assuming no additional transactions occur that require the amortization of intangible assets.

In July 2023, we received the remaining payment of approximately $1.8 billion (including interest) from Philip Morris International Inc. (“PMI”) as part of the agreement with PMI to, among other things, transition and ultimately conclude our relationship with respect to the IQOS Tobacco Heating System (“IQOS System”) in the United States (“Remaining PMI Payment”). In 2022, we received $1.0 billion from PMI upon entering into the agreement. For the nine and three months ended September 30, 2023, we recorded disposition-related interest income for the Remaining PMI Payment of $54 million and $3 million, respectively, in our condensed consolidated statements of earnings. At September 30, 2023, our condensed

14

consolidated balance sheet included a pre-tax $2.7 billion deferred gain, which we expect to recognize in earnings when we relinquish our rights to the IQOS System effective April 30, 2024.

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

	For the Nine Months Ended				For the Year Ended
	September 30, 2023				December 31, 2022
(in millions)	Goodwill		Other Intangible Assets, net		Goodwill		Other Intangible Assets, net
Balance at January 1	$	5,177	$	12,384	$	5,177	$	12,306
Changes due to:
Acquisitions (1)	1,614		1,430		—		151
Amortization	—		(87)		—		(73)
Balance at end of period	$	6,791	$	13,727	$	5,177	$	12,384

(1) Substantially all of the 2023 amounts are attributable to the NJOY Transaction. For additional information regarding the NJOY Transaction, see Note 2. Acquisition of NJOY. 2022 amounts attributable to certain intellectual property for other tobacco products.

We conduct a required annual review of goodwill and indefinite-lived intangibles for potential impairment, and more frequently if an event occurs or circumstances change that would require us to perform an interim review. There have been no events or changes in circumstances that indicate an interim impairment review was required as of September 30, 2023. We will perform our annual impairment testing during the fourth quarter of 2023.

Note 5. Investments in Equity Securities

The carrying amount of our current and former investments consisted of the following:

(in millions)	September 30, 2023		December 31, 2022
ABI	$	9,563	$	8,975
Cronos	344		375
JUUL	—		250
Total	$	9,907	$	9,600

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

	For the Nine Months Ended September 30,						For the Three Months Ended September 30,
(in millions)	2023			2022			2023		2022
ABI (1)	$	(401)		$	2,155		$	(61)	$	2,367
Cronos (1)	46			197			3		11
(Income) losses from investments under equity method of accounting	(355)			2,352			(58)		2,378
JUUL	250		(2)	1,355		(3)	—		100		(3)
(Income) losses from investments in equity securities	$	(105)		$	3,707		$	(58)	$	2,478

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

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

(3) Represents the estimated change in fair value. Prior to the disposition of our JUUL equity securities on March 3, 2023, we accounted for our former investment in JUUL as an investment in an equity security measured at fair value.

Investment in ABI

At September 30, 2023, we had an approximate 10% ownership interest in ABI, consisting of 185 million restricted shares of ABI (the “Restricted Shares”) and 12 million ordinary shares of ABI. The Restricted Shares:

▪are unlisted and not admitted to trading on any stock exchange;

▪are convertible by us into ordinary shares of ABI on a one-for-one basis;

15

▪rank equally with ordinary shares of ABI with regards to dividends and voting rights; and

▪have director nomination rights with respect to ABI.

We have not elected to convert our Restricted Shares into ordinary shares of ABI.

We account for our investment in ABI under the equity method of accounting because we have the ability to exercise significant influence over the operating and financial policies of ABI, including having active representation on ABI’s board of directors and certain ABI board committees. Through this representation, we participate in ABI’s policy making processes.

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

The fair value of our equity investment in ABI is based on (i) unadjusted quoted prices in active markets for ABI’s ordinary shares and was classified in Level 1 of the fair value hierarchy and (ii) observable inputs other than Level 1 prices, such as quoted prices for similar assets for the Restricted Shares and was classified in Level 2 of the fair value hierarchy. We can convert our Restricted Shares to ordinary shares at our discretion. Therefore, the fair value of each Restricted Share is based on the value of an ordinary share.

The fair value of our equity investment in ABI at September 30, 2023 and December 31, 2022 was $11.0 billion and $11.9 billion, respectively, which exceeded its carrying value of $9.6 billion and $9.0 billion by approximately 15% and 33%, respectively.

At September 30, 2022, the fair value of our equity investment in ABI had declined below its carrying value by $2.5 billion or approximately 22%. We determined the decline in fair value to be other than temporary and recorded a non-cash, pre-tax impairment charge of $2.5 billion for the nine and three months ended September 30, 2022, which was recorded to (income) losses from investments in equity securities in our condensed consolidated statements of earnings.

Investment in Cronos

At September 30, 2023, we had a 41.1% ownership interest in Cronos, consisting of 156.6 million shares, which we account for under the equity method of accounting. We report our share of Cronos’s results using a one-quarter lag because Cronos’s results are not available in time for us to record them in the concurrent period.

The fair value of our equity method investment in Cronos is based on unadjusted quoted prices in active markets for Cronos’s common shares and was classified in Level 1 of the fair value hierarchy. At December 31, 2022, the fair value of our equity method investment in Cronos exceeded its carrying value by $22 million or approximately 6%.

At September 30, 2023, the fair value of our equity method investment in Cronos was less than its carrying value by $31 million or approximately 9%. Based on our evaluation of the duration and magnitude of the fair value decline, our evaluation of Cronos’s financial condition (including its strong cash position) and near-term prospects, and our intent and ability to hold our investment in Cronos until recovery, we concluded that the decline in fair value of our equity method investment in Cronos below its carrying value is temporary and, therefore, no impairment was recorded.

As part of our investment in Cronos, at September 30, 2023, we also owned anti-dilution protections to purchase Cronos common shares, exercisable each quarter upon dilution, to maintain our ownership percentage. Certain of the anti-dilution protections provide us the ability to purchase additional Cronos common shares at a per share exercise price of Canadian dollar (“CAD”) $16.25 upon the occurrence of specified events (“Fixed-price Preemptive Rights”). The Fixed-price Preemptive Rights had no value at September 30, 2023 and December 31, 2022.

Former Investment in JUUL

In March 2023, we entered into the Stock Transfer Agreement with JUUL pursuant to which, among other things, we transferred to JUUL all of our beneficially owned JUUL equity securities. Concurrently with and in connection with the execution of the Stock Transfer Agreement, JUUL entered into an agreement with us that provides us with a non-exclusive, irrevocable global license to certain of the JUUL Heated Tobacco IP. In addition, all other agreements between us, on the one hand, and JUUL, on the other hand, were terminated or we were removed as parties thereto, other than certain litigation-related agreements and a license agreement relating to our non-trademark licensable intellectual property rights in the e-vapor field, which remain in force solely with respect to our e-vapor intellectual property as of or prior to March 3, 2023.

As a result of transferring to JUUL all of our beneficially owned JUUL equity securities pursuant to the Stock Transfer Agreement, for the three months ended March 31, 2023, we recorded a non-cash, pre-tax loss on the disposition of our JUUL equity securities of $250 million. Additionally, we considered specific facts and circumstances around the nature of the JUUL Heated Tobacco IP and determined that the fair value of such intellectual property was not material to our consolidated financial statements as of the date of the transaction. As a result, we did not record an asset associated with this intellectual property on our condensed consolidated balance sheet at March 31, 2023. The primary drivers of this conclusion were (i) our rights to the JUUL Heated Tobacco IP being non-exclusive, (ii) there being no product or technology transferred to us

16

associated with the JUUL Heated Tobacco IP and (iii) there being no connection between the JUUL Heated Tobacco IP and our current product development plans.

Note 6. Financial Instruments

We enter into derivative financial instruments to mitigate the potential impact of certain market risks, including foreign currency exchange rate risk. We use various types of derivative financial instruments, including forward contracts, options and swaps. We do not enter into or hold derivative financial instruments for trading or speculative purposes.

Our investment in ABI, whose functional currency is the Euro, exposes us to foreign currency exchange risk on the carrying value of our investment. To manage this risk, we may designate certain foreign exchange contracts, including cross-currency swap contracts and forward contracts (collectively, “foreign currency contracts”), and Euro denominated unsecured long-term notes (“foreign currency denominated debt”) as net investment hedges of our investment in ABI.

At September 30, 2023 and December 31, 2022, we had no outstanding foreign currency contracts. When we have foreign currency contracts in effect, counterparties are domestic and international financial institutions. Under these contracts, we are exposed to potential losses in the event of non-performance by these counterparties. We manage our credit risk by entering into transactions with counterparties that have investment grade credit ratings, limiting the amount of exposure we have with each counterparty and monitoring the financial condition of each counterparty. The counterparty agreements contain provisions that require us to maintain an investment grade credit rating. In the event our credit rating falls below investment grade, counterparties to our foreign currency contracts can require us to post collateral.

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

(in millions)	September 30, 2023		December 31, 2022
Carrying value	$	25,098	$	26,680
Fair value	21,325		22,928
Foreign currency denominated debt included in long-term debt:
Carrying value	3,164		4,540
Fair value	2,867		4,165

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

Net Investment Hedging

We recognized changes in the carrying value of the foreign currency denominated debt due to changes in the Euro to U.S. dollar exchange rate in accumulated other comprehensive losses related to ABI.

We recognized pre-tax (gains) of our net investment hedges of $(32) million and $(664) million for the nine months ended September 30, 2023 and 2022, respectively, and $(101) million and $(289) million for the three months ended September 30, 2023 and 2022, respectively, in accumulated other comprehensive losses.

Note 7. Benefit Plans

Components of Net Periodic Benefit Cost (Income)

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

	Pension				Postretirement				Pension				Postretirement
	For the Nine Months Ended September 30,								For the Three Months Ended September 30,
(in millions)	2023		2022		2023		2022		2023		2022		2023		2022
Service cost	$	29	$	48	$	11	$	17	$	9	$	16	$	3	$	7
Interest cost	250		155		49		31		84		51		15		11
Expected return on plan assets	(364)		(370)		(5)		(10)		(121)		(123)		(1)		(4)
Amortization:
Net loss (gain)	3		72		(2)		14		1		24		(2)		6
Prior service cost (credit)	4		5		(30)		(34)		1		2		(10)		(11)
Net periodic benefit cost (income)	$	(78)	$	(90)	$	23	$	18	$	(26)	$	(30)	$	5	$	9

17

Employer Contributions

We make contributions to our pension plans to the extent that the contributions are tax deductible and pay benefits that relate to plans for salaried employees that cannot be funded under Internal Revenue Service (“IRS”) regulations. We made employer contributions of $14 million to our pension plans and did not make any contributions to our postretirement plans during the nine months ended September 30, 2023. Currently, we anticipate making additional employer contributions of up to approximately $10 million to our pension plans and no contributions to our postretirement plans in 2023. However, the foregoing estimates of 2023 contributions to our pension and postretirement plans are subject to change as a result of changes in tax and other benefit laws, changes in interest rates, as well as asset performance significantly above or below the assumed long-term rate of return for each respective plan.

Note 8. Earnings per Share

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

	For the Nine Months Ended September 30,				For the Three Months Ended September 30,
(in millions)	2023		2022		2023		2022
Net earnings	$	6,070	$	3,074	$	2,166	$	224
Less: Distributed and undistributed earnings attributable to share-based awards	(12)		(9)		(5)		(3)
Earnings for basic and diluted EPS	$	6,058	$	3,065	$	2,161	$	221
Weighted-average shares for basic and diluted EPS	1,780		1,808		1,773		1,799

Note 9. Other Comprehensive Earnings/Losses

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

	For the Nine Months Ended September 30, 2023
(in millions)	Benefit Plans		ABI			Currency Translation Adjustments and Other		Accumulated Other Comprehensive Losses
Balances, December 31, 2022	$	(1,436)	$	(1,369)		$	34	$	(2,771)
Other comprehensive earnings (losses) before reclassifications	—		388			14		402
Deferred income taxes	—		(82)			—		(82)
Other comprehensive earnings (losses) before reclassifications, net of deferred income taxes	—		306			14		320
Amounts reclassified to net earnings	(21)		(5)			—		(26)
Deferred income taxes	5		1			—		6
Amounts reclassified to net earnings, net of deferred income taxes	(16)		(4)			—		(20)
Other comprehensive earnings (losses), net of deferred income taxes	(16)		302		(1)	14		300
Balances, September 30, 2023	$	(1,452)	$	(1,067)		$	48	$	(2,471)

18

	For the Three Months Ended September 30, 2023
(in millions)	Benefit Plans		ABI			Currency Translation Adjustments and Other		Accumulated Other Comprehensive Losses
Balances, June 30, 2023	$	(1,447)	$	(1,303)		$	41	$	(2,709)
Other comprehensive earnings (losses) before reclassifications	—		316			7		323
Deferred income taxes	—		(69)			—		(69)
Other comprehensive earnings (losses) before reclassifications, net of deferred income taxes	—		247			7		254
Amounts reclassified to net earnings	(7)		(14)			—		(21)
Deferred income taxes	2		3			—		5
Amounts reclassified to net earnings, net of deferred income taxes	(5)		(11)			—		(16)
Other comprehensive earnings (losses), net of deferred income taxes	(5)		236		(1)	7		238
Balances, September 30, 2023	$	(1,452)	$	(1,067)		$	48	$	(2,471)

	For the Nine Months Ended September 30, 2022
(in millions)	Benefit Plans		ABI			Currency Translation Adjustments and Other		Accumulated Other Comprehensive Losses
Balances, December 31, 2021	$	(1,612)	$	(1,512)		$	68	$	(3,056)
Other comprehensive earnings (losses) before reclassifications	—		902			(11)		891
Deferred income taxes	—		(206)			—		(206)
Other comprehensive earnings (losses) before reclassifications, net of deferred income taxes	—		696			(11)		685
Amounts reclassified to net earnings	65		(74)			(1)		(10)
Deferred income taxes	(17)		15			—		(2)
Amounts reclassified to net earnings, net of deferred income taxes	48		(59)			(1)		(12)
Other comprehensive earnings (losses), net of deferred income taxes	48		637		(1)	(12)		673
Balances, September 30, 2022	$	(1,564)	$	(875)		$	56	$	(2,383)

19

	For the Three Months Ended September 30, 2022
(in millions)	Benefit Plans		ABI			Currency Translation Adjustments and Other		Accumulated Other Comprehensive Losses
Balances, June 30, 2022	$	(1,581)	$	(869)		$	73	$	(2,377)
Other comprehensive earnings (losses) before reclassifications	—		18			(16)		2
Deferred income taxes	—		(11)			—		(11)
Other comprehensive earnings (losses) before reclassifications, net of deferred income taxes	—		7			(16)		(9)
Amounts reclassified to net earnings	24		(16)			(1)		7
Deferred income taxes	(7)		3			—		(4)
Amounts reclassified to net earnings, net of deferred income taxes	17		(13)			(1)		3
Other comprehensive earnings (losses), net of deferred income taxes	17		(6)		(1)	(17)		(6)
Balances, September 30, 2022	$	(1,564)	$	(875)		$	56	$	(2,383)

(1) Primarily reflects our share of ABI’s currency translation adjustments and the impact of our designated net investment hedges related to our equity investment in ABI. For further discussion of designated net investment hedges, see Note 6. Financial Instruments.

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

	For the Nine Months Ended September 30,				For the Three Months Ended September 30,
(in millions)	2023		2022		2023		2022
Benefit Plans: (1)
Net loss	$	5	$	94	$	2	$	33
Prior service cost/credit	(26)		(29)		(9)		(9)
	(21)		65		(7)		24
ABI (2)	(5)		(74)		(14)		(16)
Currency Translation Adjustments (2)	—		(1)		—		(1)
Pre-tax amounts reclassified from accumulated other comprehensive losses to net earnings	$	(26)	$	(10)	$	(21)	$	7

(1) Amounts are included in net defined benefit plan costs. For further details, see Note 7. Benefit Plans.

(2) Amounts are included in (income) losses from investments in equity securities. For further information, see Note 5. Investments in Equity Securities.

Note 10. Segment Reporting

At September 30, 2023 our reportable segments were smokeable products and oral tobacco products, which include (i) smokeable tobacco products, consisting of combustible cigarettes manufactured and sold by PM USA, and machine-made large cigars and pipe tobacco manufactured and sold by Middleton; and (ii) oral tobacco products, consisting of MST and snus products manufactured and sold by USSTC, and oral nicotine pouches manufactured and sold by Helix.

The all other category included (i) the financial results of NJOY (beginning June 1, 2023); (ii) Helix ROW; (iii) our former financial services business, which completed the wind-down of its portfolio of finance assets in 2022; and (iv) the IQOS System heated tobacco business.

Our chief operating decision maker (“CODM”) reviews operating companies income (loss) (“OCI”) to evaluate the performance of, and allocate resources to, our segments. OCI for our segments is defined as operating income before general corporate expenses and amortization of intangibles. Interest and other debt expense, net, along with net periodic benefit income, excluding service cost, and provision for income taxes are centrally managed at the corporate level and, accordingly, such items are not presented by segment since they are excluded from the measure of segment profitability reviewed by our CODM.

20

Segment data were as follows:

	For the Nine Months Ended September 30,				For the Three Months Ended September 30,
(in millions)	2023		2022		2023		2022
Net revenues:
Smokeable products	$	16,482	$	17,020	$	5,572	$	5,882
Oral tobacco products	1,993		1,948		685		670
All other	33		17		24		(2)
Net revenues	$	18,508	$	18,985	$	6,281	$	6,550
Earnings before income taxes:
OCI:
Smokeable products	$	8,092	$	8,112	$	2,743	$	2,791
Oral tobacco products	1,314		1,262		455		425
All other	(17)		(27)		(4)		(7)
Amortization of intangibles	(87)		(54)		(42)		(19)
General corporate expenses	(551)		(192)		(63)		(78)
Operating income	8,751		9,101		3,089		3,112
Interest and other debt expense, net	758		832		272		271
Net periodic benefit income, excluding service cost	(95)		(137)		(33)		(44)
(Income) losses from investments in equity securities	(105)		3,707		(58)		2,478
Loss on Cronos-related financial instruments	—		14		—		—
Earnings before income taxes	$	8,193	$	4,685	$	2,908	$	407

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

▪Non-Participating Manufacturer (“NPM”) Adjustment Items: We recorded pre-tax income for NPM adjustment items of $15 million for the nine and three months ended September 30, 2023 and $60 million for the nine months ended September 30, 2022 in our smokeable products segment. We recorded these items as reductions to cost of sales in our condensed consolidated statements of earnings, which resulted in increased OCI in our smokeable products segment. NPM adjustment items result from the resolutions of certain disputes with states and territories related to the NPM adjustment provision under the Master Settlement Agreement (“NPM Adjustment Items”). For additional information, see Health Care Cost Recovery Litigation in Note 13. Contingencies.

▪Tobacco and Health and Certain Other Litigation Items: We recorded pre-tax charges related to tobacco and health and certain other litigation items as follows:

	For the Nine Months Ended September 30,				For the Three Months Ended September 30,
(in millions)	2023		2022		2023		2022
Smokeable products segment	$	65	$	71	$	13	$	21
General corporate expenses	348		27		10		20
Interest and other debt expense, net	11		3		—		2
Total	$	424	$	101	$	23	$	43

We recorded the amounts shown in the table above for the smokeable products segment and general corporate expenses in marketing, administration and research costs in our condensed consolidated statements of earnings. For further discussion, see Note 13. Contingencies.

Note 11. Debt

Short-term Borrowings and Borrowing Arrangements

At September 30, 2023 and December 31, 2022, we had no short-term borrowings.

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

21

the term loan facility in full. For additional information regarding the NJOY Transaction and the Remaining PMI Payment, see Note 2. Acquisition of NJOY and Note 4. Goodwill and Other Intangible Assets, net, respectively.

At September 30, 2023, we had a $3.0 billion senior unsecured 5-year revolving credit agreement (as amended, the “Prior Credit Agreement”), which we used for general corporate purposes and was scheduled to expire on August 1, 2025.

At September 30, 2023, we had availability under the Prior Credit Agreement for borrowings of up to an aggregate principal amount of $3.0 billion and the applicable percentage for borrowings under the Prior Credit Agreement at that date was 1.0% based on our long-term senior unsecured debt ratings on that date. At September 30, 2023, we were in compliance with our covenants in the Prior Credit Agreement.

On October 24, 2023, we entered into a new senior unsecured 5-year revolving credit agreement (the “New Credit Agreement”) and terminated the Prior Credit Agreement. The terms of the New Credit Agreement are substantially similar to those of the Prior Credit Agreement.

The New Credit Agreement provides for borrowings up to an aggregate principal amount of $3.0 billion, expires on October 24, 2028 and includes an option, subject to certain conditions, for us to extend the New Credit Agreement for two additional one-year periods. We intend to use borrowings under the New Credit Agreement for general corporate purposes.

Pricing for interest and fees under the New Credit Agreement may be modified in the event of a change in the rating of our long-term senior unsecured debt. We expect interest rates on borrowings under the New Credit Agreement to be based on the Term Secured Overnight Financing Rate plus a percentage based on the higher of the ratings of our long-term senior unsecured debt from Moody’s Investors Service, Inc. and Standard & Poor’s Financial Services LLC. The New Credit Agreement does not include any other rating triggers or any provisions that could require the posting of collateral.

The New Credit Agreement includes various covenants, one of which requires us to maintain a ratio of consolidated earnings before interest, taxes, depreciation and amortization (“EBITDA”) to Consolidated Interest Expense of not less than 4.0 to 1.0, calculated as of the end of the applicable quarter on a rolling four quarters basis. The terms “Consolidated EBITDA” and “Consolidated Interest Expense,” each as defined in the New Credit Agreement, include certain adjustments.

Any commercial paper issued by us and any borrowings under the New Credit Agreement are guaranteed by PM USA.

Long-term Debt

The aggregate carrying value of our total long-term debt at September 30, 2023 and December 31, 2022 was $25.1 billion and $26.7 billion, respectively.

In May 2023, we repaid in full our 2.950% senior unsecured notes in the aggregate principal amount of $218 million at maturity. In addition, during the first quarter of 2023, we repaid in full our 1.000% senior unsecured Euro notes in the aggregate principal amount of $1.3 billion (€1.25 billion) at maturity.

At September 30, 2023 and December 31, 2022, accrued interest on our total debt of $190 million and $411 million, respectively, was included in other accrued liabilities on our condensed consolidated balance sheets.

For a discussion of the fair value of our long-term debt and the designation of our Euro denominated senior unsecured notes as a net investment hedge of our investment in ABI, see Note 6. Financial Instruments.

Note 12. Income Taxes

In August 2022, the U.S. Government enacted legislation commonly referred to as the Inflation Reduction Act that became effective January 1, 2023. The main provisions of the Inflation Reduction Act that impact us are: (i) a 15% corporate alternative minimum tax (“Corporate AMT”) and (ii) a 1% excise tax on share repurchases, which is recorded in equity on our consolidated statements of stockholders’ equity (deficit).

We are considered an “applicable corporation” for purposes of Corporate AMT. We expect our regular federal income tax liability will generally exceed our Corporate AMT liability; however, certain unique circumstances may result in our Corporate AMT liability exceeding our regular federal income tax liability, including when tax losses are reported in a different year than book losses.

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

	For the Nine Months Ended September 30,						For the Three Months Ended September 30,
(in millions)	2023			2022			2023			2022
Earnings before income taxes	$	8,193		$	4,685		$	2,908		$	407
Provision for income taxes	2,123			1,611			742			183
Income tax rate	25.9		%	34.4		%	25.5		%	45.0		%

22

Our income tax rate for the nine months ended September 30, 2023 differs from the U.S. federal statutory rate of 21%, due primarily to state tax expense and a valuation allowance recorded against a deferred tax asset related to the disposition of our former investment in JUUL. Our income tax rate for the three months ended September 30, 2023 differs from the U.S. federal statutory rate of 21%, due primarily to state tax expense.

Our income tax rates for the nine and three months ended September 30, 2022 differ from the U.S. federal statutory rate of 21%, due primarily to state tax expense, including the state tax treatment of the impairment charge on our equity investment in ABI, and a valuation allowance recorded against a deferred tax asset related to the decrease in the estimated fair value of our former investment in JUUL, partially offset by the release of a valuation allowance related to our Cronos warrant and tax accruals no longer required.

We are subject to income taxation in many jurisdictions. Unrecognized tax benefits reflect the differences between tax positions we have taken or expect to take on income tax returns and the amounts recognized in the financial statements. Resolution of the related tax positions with the relevant tax authorities may take many years to complete, and such timing is not entirely within our control.

For the year ending December 31, 2023, we expect to recognize an approximate $6.5 billion ordinary loss for cash tax purposes with respect to a portion of our tax basis associated with our former investment in JUUL. For financial statement purposes, we expect to fully reserve for the tax benefit associated with this ordinary loss by recording an unrecognized tax benefit of approximately $1.6 billion in 2023 on a pro-rata basis, pending the IRS’s review of our tax position. For the nine months ended September 30, 2023, we recognized a pro-rata portion of this ordinary loss, which resulted in a tax benefit of $1,141 million and a reduction to our current income taxes payable. For the nine months ended September 30, 2023, we also recognized a $1,173 million increase in a long-term liability for unrecognized tax benefits related to this tax position, partially offset by a $32 million deferred federal benefit for state taxes. There was no impact to our condensed consolidated statement of earnings for the nine and three months ended September 30, 2023. For further discussion of our former investment in JUUL, see Note 5. Investments in Equity Securities.

At September 30, 2023, our total unrecognized tax benefits were $1,233 million. The amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate at September 30, 2023, was $35 million, along with $1,198 million affecting deferred taxes. The amount of unrecognized tax benefit that, if recognized, would impact the effective tax rate at December 31, 2022, was $44 million, along with $25 million affecting deferred taxes. Unrecognized tax benefits increased by $1,164 million from December 31, 2022 due primarily to the tax position established with respect to the character of losses from our former investment in JUUL as discussed above.

As a result of the recognition of the approximate $6.5 billion ordinary loss for cash tax purposes discussed above, we expect to be subject to Corporate AMT in 2023.

The following chart provides a reconciliation of the beginning and ending valuation allowances for the nine months ended September 30, 2023:

(in millions)
Balance at beginning of year	$	2,800
Additions to valuation allowance charged to income tax expense	76
Releases to valuation allowance credited to income tax benefit	(6)
Foreign currency translation	(2)
Additions to valuation allowance due to NJOY Transaction (no impact to earnings)	12
Reductions to valuation allowance offset to deferred tax asset (no impact to earnings)	(663)
Balance at end of period	$	2,217

We determine deferred tax assets and liabilities based on the differences between the financial statement and tax bases of assets and liabilities, using enacted tax rates in effect for the year in which the differences are expected to reverse. We record a valuation allowance when it is more likely than not that some portion or all of a deferred tax asset will not be realized. We determine the realizability of deferred tax assets based on the weight of all available positive and negative evidence. In reaching this determination, we consider the character of the assets and the possible sources of taxable income of the appropriate character within the available carryback and carryforward periods available under the tax law.

For the nine months ended September 30, 2023, we reduced the deferred tax asset and corresponding valuation allowance for the portion of our JUUL capital losses that is now part of our tax basis in the shares of a foreign subsidiary. This outside basis difference of the foreign subsidiary is not recognized as a deferred tax asset since we do not expect the temporary difference to reverse in the foreseeable future. The cumulative valuation allowance at September 30, 2023 was primarily attributable to

23

deferred tax assets recorded in connection with the portion of our JUUL capital losses that is now included in our tax basis in the shares of a domestic subsidiary and our investment in Cronos.

Note 13. Contingencies

Legal proceedings covering a wide range of matters are pending or threatened in various United States and foreign jurisdictions against Altria and certain of our subsidiaries, including PM USA and USSTC, as well as our indemnitees. Various types of claims may be raised in these proceedings, including product liability, unfair trade practices, antitrust, income tax liability, contraband shipments, patent infringement, employment matters, claims alleging violation of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), claims for contribution and claims of competitors, shareholders or distributors. Legislative action, such as changes to tort law, also may expand the types of claims and remedies available to plaintiffs.

Litigation is subject to uncertainty and it is possible that there could be adverse developments in pending or future cases. An unfavorable outcome or settlement of pending tobacco-related or other litigation could encourage the commencement of additional litigation. Damages claimed in some tobacco-related and other litigation are or can be significant and, in certain cases, have ranged in the billions of dollars. The variability in pleadings in multiple jurisdictions, together with the actual experience of management in litigating claims, demonstrates that the monetary relief that may be specified in a lawsuit bears little relevance to the ultimate outcome. In certain cases, plaintiffs claim that defendants’ liability is joint and several. In such cases, we may face the risk that one or more co-defendants decline or otherwise fail to participate in the bonding required for an appeal or to pay their proportionate or jury-allocated share of a judgment. As a result, under certain circumstances, we may have to pay more than our proportionate share of any bonding- or judgment-related amounts. Furthermore, in those cases where plaintiffs are successful, we also may be required to pay interest and attorneys’ fees.

Although PM USA has historically been able to obtain required bonds or relief from bonding requirements in order to prevent plaintiffs from seeking to collect judgments while adverse verdicts have been appealed, there remains a risk that such relief may not be obtainable in all cases. This risk has been substantially reduced given that 47 states and Puerto Rico limit the dollar amount of bonds or require no bond at all. As discussed below, however, tobacco litigation plaintiffs have challenged the constitutionality of Florida’s bond cap statute in several cases and plaintiffs may challenge state bond cap statutes in other jurisdictions as well. Such challenges may include the applicability of state bond caps in federal court. States, including Florida, also may seek to repeal or alter bond cap statutes through legislation. Although we cannot predict the outcome of such challenges, it is possible that our condensed consolidated results of operations, cash flows or financial position could be materially affected in a particular fiscal quarter or fiscal year by an unfavorable outcome of one or more such challenges.

We record provisions in our condensed consolidated financial statements for pending litigation when we determine that an unfavorable outcome is probable and the amount of the loss can be reasonably estimated. At the present time, while it is reasonably possible that an unfavorable outcome in a case may occur, except to the extent discussed elsewhere in this Note 13. Contingencies: (i) management has concluded that it is not probable that a loss has been incurred in any of the pending cases; (ii) management is unable to estimate the possible loss or range of loss that could result from an unfavorable outcome in any of the pending cases; and (iii) accordingly, management has not provided any amounts in our condensed consolidated financial statements for unfavorable outcomes, if any. Litigation defense costs are expensed as incurred.

We have achieved substantial success in managing litigation. Nevertheless, litigation is subject to uncertainty and significant challenges remain. It is possible that our condensed consolidated results of operations, cash flows or financial position could be materially affected in a particular fiscal quarter or fiscal year by an unfavorable outcome or settlement of certain pending litigation. We believe, and have been so advised by counsel handling the respective cases, that we have valid defenses to the litigation pending against us, as well as valid bases for appeal of adverse verdicts. We have defended, and will continue to defend, vigorously against litigation challenges. However, we may enter into settlement discussions in particular cases if we believe it is in our best interests to do so.

24

Judgments Paid and Provisions for Tobacco and Health (Including Engle Progeny Litigation) and Certain Other Litigation Items: The changes in our accrued liability for tobacco and health and certain other litigation items, including related interest costs, for the periods specified below are as follows:

	For the Nine Months Ended September 30,				For the Three Months Ended September 30,
(in millions)	2023		2022		2023		2022
Accrued liability for tobacco and health and certain other litigation items at beginning of period	$	71	$	91	$	381	$	25
Pre-tax charges for:
Tobacco and health and certain other litigation (1)	75		71		23		21
Shareholder derivative lawsuits (2)	98		27		—		20
JUUL-related settlements (3)	240		—		—		—
Related interest costs	11		3		—		2
Payments	(122)		(137)		(31)		(13)
Accrued liability for tobacco and health and certain other litigation items at end of period	$	373	$	55	$	373	$	55

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

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

(3) Includes the settlement of certain e-vapor product litigation relating to JUUL e-vapor products and the e-vapor product litigation brought by the Minnesota attorney general. See E-vapor Product Litigation below for a discussion of these settlements.

The accrued liability for tobacco and health and certain other litigation items, including related interest costs, was included in accrued liabilities and other liabilities on our condensed consolidated balance sheets. Pre-tax charges for tobacco and health and certain other litigation were included in marketing, administration and research costs on our condensed consolidated statements of earnings. Pre-tax charges for related interest costs were included in interest and other debt expense, net on our condensed consolidated statements of earnings.

After exhausting all appeals in those cases resulting in adverse verdicts associated with tobacco-related litigation, since October 2004, PM USA has paid judgments and settlements (including related costs and fees) totaling approximately $1 billion and interest totaling approximately $241 million as of September 30, 2023. These amounts include payments for Engle progeny judgments (and related costs and fees) totaling approximately $439 million and related interest totaling approximately $60 million.

Security for Judgments: To obtain stays of judgments pending appeal, PM USA has posted various forms of security. As of September 30, 2023, PM USA has posted appeal bonds totaling approximately $34 million, which have been collateralized with restricted cash and are included in assets on our condensed consolidated balance sheets.

Overview of Tobacco-Related Litigation

Types and Number of U.S. Cases: Claims related to tobacco products generally fall within the following categories: (i) smoking and health cases alleging personal injury brought on behalf of individual plaintiffs; (ii) health care cost recovery cases brought by governmental (both domestic and foreign) plaintiffs seeking reimbursement for health care expenditures allegedly caused by cigarette smoking and/or disgorgement of profits; (iii) e-vapor cases alleging violation of RICO, fraud, failure to warn, design defect, negligence, antitrust, patent infringement and unfair trade practices; and (iv) other tobacco-related litigation described below. Plaintiffs’ theories of recovery and the defenses raised in tobacco-related litigation are discussed below.

25

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

	October 23, 2023	October 24, 2022	October 25, 2021
Individual Smoking and Health Cases (1)	167	161	179
Health Care Cost Recovery Actions (2)	1	1	1
E-vapor Cases (3)	5,177	4,351	2,951
Other Tobacco-Related Cases (4)	3	3	3

(1) Includes as of October 23, 2023, 15 cases filed in Illinois, 17 cases filed in New Mexico, 53 cases filed in Massachusetts and 46 non-Engle cases filed in Florida. Does not include individual smoking and health cases brought by or on behalf of plaintiffs in Florida state and federal courts following the decertification of the Engle class (these Engle progeny cases are discussed below in Smoking and Health Litigation - Engle Class Action). Also does not include 1,386 cases brought by flight attendants seeking compensatory damages for personal injuries allegedly caused by exposure to environmental tobacco smoke (“ETS”). The flight attendants allege that they are members of an ETS smoking and health class action in Florida, which was settled in 1997 (Broin). The terms of the court-approved settlement in that case allowed class members to file individual lawsuits seeking compensatory damages but prohibited them from seeking punitive damages. Class members were prohibited from filing individual lawsuits after 2000 under the court-approved settlement.

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

(3) Includes as of October 23, 2023, 57 class action lawsuits, 3,614 individual lawsuits and 1,506 “third party” lawsuits relating to the Multidistrict Litigation discussed under E-vapor Product Litigation below. The 57 class action lawsuits include 32 cases in the Northern District of California involving plaintiffs whose claims were previously included in other class action complaints but were refiled as separate stand-alone class actions for procedural and other reasons. In May 2023, we reached agreement on terms to resolve the majority of the Multidistrict Litigation lawsuits. Also includes three patent infringement lawsuits filed against us and certain of our affiliates. For further discussion of the pending Multidistrict Litigation settlement and patent infringement litigation, see E-vapor Product Litigation below.

(4) Includes as of October 23, 2023, one inactive smoking and health case alleging personal injury and purporting to be brought on behalf of a class of individual plaintiffs and two inactive class action lawsuits alleging that use of the terms “Lights” and “Ultra Lights” constitute deceptive and unfair trade practices, common law or statutory fraud, unjust enrichment, breach of warranty or violations of RICO.

International Tobacco-Related Cases: As of October 23, 2023, (i) Altria is named as a defendant in three e-vapor class action lawsuits in Canada; (ii) PM USA is a named defendant in 10 health care cost recovery actions in Canada, eight of which also name Altria as a defendant; and (iii) PM USA and Altria are named as defendants in seven smoking and health class actions filed in various Canadian provinces. See Guarantees and Other Similar Matters below for a discussion of the Distribution Agreement (defined below) between Altria and PMI that provides for indemnities for certain liabilities concerning tobacco products.

Tobacco-Related Cases Set for Trial: As of October 23, 2023, two Engle progeny cases, one individual smoking and health case and no e-vapor cases are set for trial through December 31, 2023. Trial dates are subject to change.

Trial Results: Since January 1999, excluding the Engle progeny cases (separately discussed below), verdicts have been returned in 78 tobacco-related cases in which PM USA was a defendant. Verdicts in favor of PM USA and other defendants were returned in 48 of the 78 cases. These 48 cases were tried in Alaska (1), California (7), Connecticut (1), Florida (10), Louisiana (1), Massachusetts (6), Mississippi (1), Missouri (4), New Hampshire (1), New Mexico (2), New Jersey (1), New York (5), Ohio (2), Pennsylvania (2), Rhode Island (1), Tennessee (2) and West Virginia (2). One case in Massachusetts, Main, where the verdict was initially returned in favor of PM USA, was reversed on appeal and remanded for a new trial.

Of the 30 non-Engle progeny cases in which verdicts were returned in favor of plaintiffs, 26 have reached final resolution.

See Smoking and Health Litigation - Engle Progeny Trial Results below for a discussion of verdicts in state and federal Engle progeny cases involving PM USA as of October 23, 2023.

Smoking and Health Litigation

Overview: Plaintiffs’ allegations of liability in smoking and health cases are based on various theories of recovery, including negligence, gross negligence, strict liability, fraud, misrepresentation, design defect, failure to warn, nuisance, breach of express and implied warranties, breach of special duty, conspiracy, concert of action, violations of unfair trade practice laws and consumer protection statutes and claims under the federal and state anti-racketeering statutes. Plaintiffs in the smoking and health cases seek various forms of relief, including compensatory and punitive damages, treble/multiple damages and other statutory damages and penalties, creation of medical monitoring and smoking cessation funds, disgorgement of profits, and injunctive and equitable relief. Defenses raised in these cases include lack of proximate cause, assumption of the risk, comparative fault and/or contributory negligence, statutes of limitations and preemption by the Federal Cigarette Labeling and Advertising Act.

26

Non-Engle Progeny Litigation: Summarized below are the non-Engle progeny smoking and health cases pending during 2023 (or recently concluded) in which a verdict was returned in favor of plaintiff and against PM USA. Charts listing certain verdicts for plaintiffs in the Engle progeny cases can be found in Smoking and Health Litigation - Engle Progeny Trial Results below.

Ricapor-Hall: In August 2023, a jury in a Hawaii state court returned a verdict in favor of plaintiff and against PM USA, awarding $6 million in compensatory damages, which we expect to be reduced to $3 million based on the jury’s finding on comparative fault and a set-off against plaintiff’s settlements with other defendants, and $8 million in punitive damages. We will file post-trial motions challenging the verdict and will, if necessary, appeal.

Deswert: In May 2023, a jury in a Pennsylvania state court returned a verdict in favor of plaintiff and against PM USA, awarding less than $1 million in compensatory damages and allocating 50% of the fault to PM USA. Despite the comparative fault finding, the compensatory damages award would not have been reduced due to the jury’s finding for plaintiff on the strict liability claim. Plaintiff’s claim for punitive damages was dismissed prior to the trial. In lieu of appealing the trial court’s verdict, PM USA settled plaintiff’s claims in July 2023 and recorded a pre-tax charge of less than $1 million in the third quarter of 2023.

Woodley: In February 2023, a jury in a Massachusetts state court returned a verdict in favor of plaintiff and against PM USA, awarding $5 million in compensatory damages. There was no claim for punitive damages. Following the denial of PM USA’s post-trial motions, PM USA appealed the judgment to the Appeals Court of Massachusetts, and the appeal remains pending.

Fontaine: In September 2022, a jury in a Massachusetts state court returned a verdict in favor of plaintiff and against PM USA, awarding approximately $8 million in compensatory damages and $1 billion in punitive damages. In September 2023, the court denied PM USA’s motion for a new trial and partially granted PM USA’s motion for remittitur, reducing the punitive damages award to $56 million. PM USA will file post-trial motions for judgment notwithstanding the verdict and will, if necessary, appeal.

Greene: In September 2019, a jury in a Massachusetts state court returned a verdict in favor of plaintiffs and against PM USA, awarding approximately $10 million in compensatory damages. In May 2020, the court ruled on plaintiffs’ remaining claim and trebled the compensatory damages award to approximately $30 million. In February 2021, the trial court awarded plaintiffs attorneys’ fees and costs in the amount of approximately $2.3 million. PM USA appealed the judgment, and, in May 2023, the Massachusetts Supreme Judicial Court affirmed the trial court judgment and orders denying PM USA’s post-trial motions, concluding the case. We recorded a pre-tax charge of approximately $48 million and paid the recorded amount in the second quarter of 2023.

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

Engle Class Action: In July 2000, in the second phase of the Engle smoking and health class action in Florida, a jury returned a verdict assessing punitive damages totaling approximately $145 billion against various defendants, including $74 billion against PM USA. Following entry of judgment, PM USA appealed. In May 2003, the Florida Third District Court of Appeal reversed the judgment entered by the trial court and instructed the trial court to order the decertification of the class. Plaintiffs petitioned the Florida Supreme Court for further review.

In July 2006, the Florida Supreme Court ordered that the punitive damages award be vacated, that the class approved by the trial court be decertified and that members of the decertified class could file individual actions against defendants within one year of issuance of the mandate. The court further declared the following Phase I findings are entitled to res judicata effect in such individual actions brought within one year of the issuance of the mandate: (i) that smoking causes various diseases; (ii) that nicotine in cigarettes is addictive; (iii) that defendants’ cigarettes were defective and unreasonably dangerous; (iv) that defendants concealed or omitted material information not otherwise known or available knowing that the material was false or misleading or failed to disclose a material fact concerning the health effects or addictive nature of smoking; (v) that defendants agreed to misrepresent information regarding the health effects or addictive nature of cigarettes with the intention of causing the public to rely on this information to their detriment; (vi) that defendants agreed to conceal or omit information regarding the health effects of cigarettes or their addictive nature with the intention that smokers would rely on the information to their detriment; (vii) that all defendants sold or supplied cigarettes that were defective; and (viii) that defendants were negligent.

In August 2006, PM USA and plaintiffs sought rehearing from the Florida Supreme Court on parts of its July 2006 opinion. In December 2006, the Florida Supreme Court refused to revise its July 2006 ruling, except that it revised the set of Phase I findings entitled to res judicata effect by excluding finding (v) listed above (relating to agreement to misrepresent information), and added the finding that defendants sold or supplied cigarettes that, at the time of sale or supply, did not conform to the representations of fact made by defendants. In February 2008, the trial court decertified the class.

Pending Engle Progeny Cases: The deadline for filing Engle progeny cases expired in January 2008, at which point a total of approximately 9,300 federal and state claims were pending. As of October 23, 2023, approximately 381 state court cases were pending against PM USA or Altria asserting individual claims by or on behalf of approximately 484 state court plaintiffs.

27

Because of a number of factors, including docketing delays, duplicated filings and overlapping dismissal orders, these numbers are estimates. The 2015 federal Engle agreement resolved nearly all Engle progeny cases pending in federal court as of the date of the agreement, and each case excluded from that agreement subsequently has been resolved.

Engle Progeny Trial Results: As of October 23, 2023, 144 federal and state Engle progeny cases involving PM USA have resulted in verdicts since the Florida Supreme Court Engle decision. Eighty verdicts were returned in favor of plaintiffs, and four verdicts (Calloway, Oshinsky-Blacker, McCoy and Mahfuz) that were initially returned in favor of plaintiffs were reversed post-trial or on appeal and remain pending. In Kaplan (McLaughlin), the punitive damages award was vacated on appeal and remanded for a new trial. In Sommers, plaintiff appealed a jury verdict awarding only compensatory damages. The Third District Court of Appeal affirmed the award and remanded for a new trial on entitlement to punitive damages and amount. On remand, the trial court granted PM USA’s motion for summary judgment and entered final judgment dismissing the plaintiff’s punitive damages claim with prejudice, and plaintiff has appealed.

Fifty-eight verdicts were returned in favor of PM USA, of which 48 were state cases. In addition, there have been a number of mistrials, only some of which have resulted in new trials as of October 23, 2023. The jury in one case, Garcia, awarded plaintiff compensatory damages and found plaintiff was entitled to punitive damages; however, the court declared a mistrial in the second phase of the trial regarding punitive damages because the jury was unable to determine the amount of the punitive damages. Following appeals by the plaintiff and PM USA, the appellate court in Garcia affirmed the compensatory damages judgment against PM USA and granted a new trial with respect to punitive damages. The plaintiff in Garcia subsequently filed a motion to voluntarily dismiss the punitive damages claim and to enter final judgment on the compensatory damages claim, which the court granted. PM USA’s appeal of the final judgment is pending. Two verdicts (Cohen and Collar) that were returned in favor of PM USA were subsequently reversed for new trials. Juries in two cases (Reider and Banks) returned zero damages verdicts in favor of PM USA. Juries in two other cases (Weingart and Hancock) returned verdicts against PM USA awarding no damages, but the trial court in each case decided to award plaintiffs damages. Two cases, Pollari and Neff, resulted in verdicts in favor of PM USA following a retrial of initial verdicts returned in favor of plaintiffs. In Pollari, plaintiff and defendants appealed the verdict and the appellate court affirmed the judgment in favor of the defendants. In Neff, the trial court denied plaintiff’s motion for a new trial, and plaintiff filed a notice of appeal. Two cases, Rintoul (Caprio) and Duignan, resulted in verdicts in favor of plaintiffs following retrial of initial verdicts returned in favor of plaintiffs. In Duignan, plaintiff’s motion for reconsideration with respect to the appellate court’s decision to vacate the punitive damages judgment, direct the trial court to apply the jury’s comparative fault assessments to the compensatory damages verdict and order the trial court to set aside the jury’s findings on plaintiff’s fraud claims was denied. The verdict in the retrial in Rintoul (Caprio) was reversed upon appeal and remanded for a new trial. Two cases, Freeman and Harris, resulted in an appellate reversal of a jury verdict in favor of plaintiff, and a judgment in favor of PM USA. One case, R. Douglas, was dismissed with prejudice following a verdict in favor of plaintiff.

The charts below list the verdicts and post-trial developments in certain Engle progeny cases in which verdicts were returned in favor of plaintiffs. The first chart lists cases that are pending as of October 23, 2023 where PM USA has determined an unfavorable outcome is not probable and the amount of loss cannot be reasonably estimated, and the second chart lists cases that have concluded in the past 12 months. Unless otherwise noted for a particular case, the jury’s award for compensatory damages will not be reduced by any finding of plaintiff’s comparative fault. Further, the damages noted reflect adjustments based on post-trial or appellate rulings.

References below to “R.J. Reynolds,” “Lorillard” and “Liggett Group” are to R.J. Reynolds Tobacco Company, Lorillard Tobacco Company and Liggett Group, LLC, respectively.

Currently Pending Engle Cases with Verdicts Against PM USA

(rounded to nearest $ million)

Plaintiff	Verdict Date	Defendant(s)	Court	Compensatory Damages (1)	Punitive Damages (PM USA)	Post-Trial Status
Chacon	October 2023	PM USA	Miami-Dade	<$1 million	<$1 million	Defendant’s post-trial motions pending.
Hoffman	January 2023	PM USA	Miami-Dade	$5 million ($3 million PM USA)	$0	Appeal by defendant to the Third District Court of Appeal pending.
Levine	September 2022	PM USA and R.J. Reynolds	Miami-Dade	$1 million	$0	Appeals by defendants and plaintiff to the Third District Court of Appeal pending.
Schertzer	April 2022	PM USA and R.J. Reynolds	Miami-Dade	$3 million	$0	Appeal by defendants to the Third District Court of Appeal pending.
Lipp	September 2021	PM USA	Miami-Dade	$15 million	$28 million	Appeal by defendant to the Third District Court of Appeal pending.

28

Plaintiff	Verdict Date	Defendant(s)	Court	Compensatory Damages (1)	Punitive Damages (PM USA)	Post-Trial Status
Garcia	May 2021	PM USA	Miami-Dade	$6 million ($3 million PM USA)	$0	Appeal by defendant to the Third District Court of Appeal pending.
Duignan	February 2020 (2)	PM USA and R.J. Reynolds	Pinellas	$3 million ($1 million PM USA)	$0	The Second District Court of Appeal vacated the final judgment entered in plaintiff’s favor following retrial, vacated the punitive damages judgment, directed the trial court to apply the jury’s comparative fault assessments to the compensatory damages verdict and ordered the trial court to set aside the jury’s findings on plaintiff’s fraud claims. In June 2023, plaintiff filed a motion for reconsideration, which the court denied in September 2023. The case will be returned to the trial court for further proceedings, including a retrial of plaintiff’s punitive damages claim.
McCall	March 2019	PM USA	Broward	<$1 million (<$1 million PM USA)	<$1 million	Defendant’s post-trial motions pending.
Chadwell	September 2018	PM USA	Miami-Dade	$2 million	$0	Third District Court of Appeal has received supplemental briefing in accordance with the decision in Prentice (3).
Kaplan (McLaughlin)	July 2018	PM USA and R.J. Reynolds	Broward	$2 million	$0	Florida Supreme Court vacated the punitive damages award in accordance with the decision in Sheffield (3). The Fourth District Court of Appeal affirmed the compensatory damages award and granted a new trial on punitive damages.
Cooper (Blackwood)	September 2015	PM USA and R.J. Reynolds	Broward	$5 million (<$1 million PM USA)	$0	Fourth District Court of Appeal affirmed the compensatory damages award and granted a new trial on punitive damages.

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

(2) Plaintiff’s verdict following a retrial of an initial verdict in favor of plaintiff.

(3) PM USA is not a defendant in Prentice or Sheffield, which are discussed below in Engle Progeny Appellate Issues.

Engle Cases Concluded Within Past 12 Months

(rounded to nearest $ million)

Plaintiff	Verdict Date	Defendant(s)	Court	Accrual Date	Payment Amount for Damages (if any)	Payment Date
Miller	September 2022	PM USA and R.J. Reynolds	Miami-Dade	Third quarter of 2022	<$1 million	December 2022
Tuttle	August 2022	PM USA	Duval	Third quarter of 2022	<$1 million	October 2022
Holliman	February 2019	PM USA	Miami-Dade	Fourth quarter of 2022	$3 million	January 2023
D. Brown	January 2015	PM USA	Federal Court - Middle District of Florida	Third quarter of 2022	$5 million	August 2022

Engle Progeny Appellate Issues: Appellate decisions in the following Engle progeny cases may have wide application to other Engle progeny cases:

In Mary Sheffield v. R.J. Reynolds Tobacco Company, an Engle progeny case against R.J. Reynolds only, the Florida Supreme Court resolved a conflict among Florida’s District Courts of Appeal finding that the 1999 amendments to Florida’s punitive damages statute (including its caps and bar on multiple punitive damages awards for the same course of conduct) apply in wrongful death cases where the decedent was injured prior to the October 1, 1999 effective date of the amendments but died from his or her injuries after such effective date.

29

In Linda Prentice v. R.J. Reynolds Tobacco Company, an Engle progeny case against R.J. Reynolds only, the Florida Supreme Court resolved a conflict among Florida’s District Courts of Appeal finding that in order for an Engle plaintiff to prevail on fraudulent concealment and conspiracy claims, plaintiff must prove that the smoker relied to his or her detriment on a statement that concealed or omitted material information about the health risks or addictiveness of smoking. The Florida Supreme Court declined to revisit its prior decisions giving preclusive effect to the Engle Phase I findings, described above in Engle Class Action.

Florida Bond Statute: In June 2009, Florida amended its existing bond cap statute by adding a $200 million bond cap that applies to all state Engle progeny lawsuits in the aggregate and establishes individual bond caps for individual Engle progeny cases in amounts that vary depending on the number of judgments in effect at a given time. Plaintiffs have been unsuccessful in various challenges to the bond cap statute in Florida state court.

No federal court has yet addressed the constitutionality of the bond cap statute or the applicability of the bond cap to Engle progeny cases tried in federal court.

From time to time, legislation has been presented to the Florida legislature that would repeal the bond cap statute; however to date, no legislation repealing the statute has passed.

Other Smoking and Health Class Actions: Since the dismissal in May 1996 of a purported nationwide class action brought on behalf of allegedly addicted smokers, plaintiffs have filed numerous putative smoking and health class action suits in various state and federal courts. In general, these cases have purported to be brought on behalf of residents of a particular state or states (although a few cases have purported to be nationwide in scope) and have raised addiction claims and, in many cases, claims of physical injury as well.

Class certification has been denied or reversed by courts in 61 smoking and health class actions involving PM USA in Arkansas (1), California (1), Delaware (1), the District of Columbia (2), Florida (2), Illinois (3), Iowa (1), Kansas (1), Louisiana (1), Maryland (1), Michigan (1), Minnesota (1), Nevada (29), New Jersey (6), New York (2), Ohio (1), Oklahoma (1), Oregon (1), Pennsylvania (1), Puerto Rico (1), South Carolina (1), Texas (1) and Wisconsin (1). See Certain Other Tobacco-Related Litigation below for a discussion of “Lights” and “Ultra Lights” class action cases and medical monitoring class action cases pending against PM USA.

As of October 23, 2023, PM USA and Altria are named as defendants, along with other cigarette manufacturers, in seven class actions filed in the Canadian provinces of Alberta, Manitoba, Nova Scotia, Saskatchewan, British Columbia and Ontario. In Saskatchewan, British Columbia (two separate cases) and Ontario, plaintiffs seek class certification on behalf of individuals who suffer or have suffered from various diseases, including chronic obstructive pulmonary disease, emphysema, heart disease or cancer, after smoking defendants’ cigarettes. In the actions filed in Alberta, Manitoba and Nova Scotia, plaintiffs seek certification of classes of all individuals who smoked defendants’ cigarettes. In March 2019, all of these class actions were stayed as a result of three Canadian tobacco manufacturers (none of which is related to us) seeking protection under Canada’s Companies’ Creditors Arrangement Act (which is similar to Chapter 11 bankruptcy in the United States). The companies entered into these proceedings following a Canadian appellate court upholding two smoking and health class action verdicts against those companies totaling approximately CAD $13 billion. See Guarantees and Other Similar Matters below for a discussion of the Distribution Agreement between Altria and PMI, which provides for indemnities for certain liabilities concerning tobacco products.

Health Care Cost Recovery Litigation

Overview: In the health care cost recovery litigation, governmental entities seek reimbursement of health care cost expenditures allegedly caused by tobacco products and, in some cases, of future expenditures and damages. Relief sought by some but not all plaintiffs includes punitive damages, multiple damages and other statutory damages and penalties, injunctions prohibiting alleged marketing and sales to minors, disclosure of research, disgorgement of profits, funding of anti-smoking programs, additional disclosure of nicotine yields, and payment of attorney and expert witness fees.

Although there have been some decisions to the contrary, most judicial decisions in the United States have dismissed all or most health care cost recovery claims against cigarette manufacturers. Nine federal circuit courts of appeals and eight state appellate courts, relying primarily on grounds that plaintiffs’ claims were too remote, have ordered or affirmed dismissals of health care cost recovery actions. The U.S. Supreme Court has refused to consider plaintiffs’ appeals from the cases decided by five federal circuit courts of appeal.

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

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

30

cases, while both Altria and PM USA are named as defendants in the New Brunswick, Ontario, Newfoundland and Labrador, Alberta, Manitoba, Saskatchewan, Prince Edward Island and Nova Scotia cases. The Nunavut Territory and Northwest Territory have passed legislation permitting similar claims, but lawsuits based on this legislation have not been filed. All of these cases have been stayed pending resolution of proceedings in Canada involving three tobacco manufacturers (none of which are affiliated with us) under the Companies’ Creditors Arrangement Act discussed above. See Smoking and Health Litigation - Other Smoking and Health Class Actions above for a discussion of these proceedings. See Guarantees and Other Similar Matters below for a discussion of the Distribution Agreement between Altria and PMI that provides for indemnities for certain liabilities concerning tobacco products.

Settlements of Health Care Cost Recovery Litigation: In November 1998, PM USA and certain other tobacco product manufacturers entered into the Master Settlement Agreement (the “MSA”) with 46 states, the District of Columbia and certain United States territories to settle asserted and unasserted health care cost recovery and other claims. PM USA and certain other tobacco product manufacturers had previously entered into agreements to settle similar claims brought by Mississippi, Florida, Texas and Minnesota (together with the MSA, the “State Settlement Agreements”). The State Settlement Agreements require that the original participating manufacturers or “OPMs” (now PM USA, R.J. Reynolds and, with respect to certain brands, ITG Brands, LLC (“ITG”)) make annual payments of approximately $9.4 billion, subject to adjustments for several factors, including inflation, market share and industry volume. In addition, the OPMs are required to pay settling plaintiffs’ attorneys’ fees, subject to an annual cap of $500 million; these quarterly payments are expected to end in 2024. For the three months ended September 30, 2023 and 2022, the aggregate amount recorded in cost of sales with respect to the State Settlement Agreements was approximately $900 million and $1.1 billion, respectively. For the nine months ended September 30, 2023 and 2022, the aggregate amount recorded in cost of sales with respect to the State Settlement Agreements was approximately $2.8 billion and $3.0 billion, respectively. These amounts include PM USA’s estimate of amounts related to NPM Adjustments discussed below.

NPM Adjustment Disputes: The “NPM Adjustment” is a reduction in MSA payments made by the OPMs and those manufacturers that are subsequent signatories to the MSA (collectively, the “participating manufacturers” or “PMs”) that applies if the PMs collectively lose at least a specified level of market share to non-participating manufacturers since 1997, subject to certain conditions and defenses.

The independent auditor (“IA”) appointed under the MSA has calculated that PM USA’s share of the maximum potential NPM Adjustments for 2004-2022 is (exclusive of interest or earnings): $388 million for 2004; $181 million for 2005; $154 million for 2006; $185 million for 2007; $250 million for 2008; $211 million for 2009; $218 million for 2010; $166 million for 2011; $214 million for 2012; $224 million for 2013; $258 million for 2014; $313 million for 2015; $292 million for 2016; $285 million for 2017; $318 million for 2018; $415 million for 2019; $572 million for 2020; $675 million for 2021; and $571 million for 2022. These maximum amounts will be substantially reduced to reflect the NPM Adjustment settlements discussed below, and potentially for current and future calculation disputes and other developments. PM USA’s recovery for 2004 is addressed below. In addition, PM USA’s recovery of such reduced amounts for all subsequent years will be dependent upon subsequent determinations regarding state-specific defenses and disputes with other PMs.

Settlements of NPM Adjustment Disputes.

▪Multi-State Settlement. By the end of 2018, a total of 36 MSA states and territories had entered the multi-state settlement of NPM Adjustment disputes to which PM USA is a party. Of these 36 states and territories, 35 entered settlement through 2022, and one state entered settlement through 2024. In March 2022, Illinois joined the multi-state settlement, settling the NPM Adjustment disputes through 2028. As a result, PM USA will receive approximately $80 million for 2004 through 2021, $20 million of which relates to the 2019 through 2021 “transition years.” In connection with this development for Illinois, PM USA recorded $80 million as a reduction in cost of sales in the first quarter of 2022. In August 2023, Iowa also joined the multi-state settlement, settling the NPM Adjustment disputes through 2029 and, together with Illinois, bringing the total number of states and territories that have joined the multi-state settlement to 38. As a result, PM USA will receive approximately $19 million for 2005 through 2022, $4 million of which relates to the 2020 through 2022 “transition years.” As a result of Iowa joining the multi-state settlement, PM USA recorded $19 million as a reduction in cost of sales in the third quarter of 2023. Pursuant to the multi-state settlement, PM USA has received $1.24 billion since the first group of states entered the NPM Adjustment dispute settlement in 2014 and expects to receive approximately $353 million in credits to offset PM USA’s MSA payments through 2039.

▪New York Settlement. In 2015, PM USA entered into a separate NPM Adjustment settlement with New York in which PM USA settled the NPM Adjustment disputes with New York in perpetuity. PM USA has received $503 million pursuant to the New York settlement and expects to receive annual credits applied against the MSA payments due to New York going forward.

▪Montana Settlement. In 2020, PM USA entered into a separate NPM Adjustment settlement with Montana in which PM USA settled the NPM Adjustment disputes with Montana through 2030. This settlement resulted in a payment by PM USA of $4 million.

31

Continuing NPM Adjustment Disputes with States That Have Not Settled.

▪2004 NPM Adjustment. The PMs and the nine states that have not settled the NPM Adjustment disputes participated in a multi-state arbitration of NPM Adjustment disputes for 2004. A tenth state, Illinois, also participated in the arbitration, but joined the multi-state settlement after the arbitration panel issued its decisions described below. The arbitration panels issued decisions finding that three states, Missouri, New Mexico and Washington, were not diligent in their enforcement of their escrow statutes in 2004 and, therefore, are subject to the NPM adjustment for 2004. The arbitration panels further found that the remaining seven states were diligent in their enforcement and, therefore, are not subject to the NPM adjustment for 2004. PM USA received approximately $52 million on account of the 2004 NPM Adjustment as a credit against its April 2023 MSA payment. Washington, Missouri and New Mexico have challenged those determinations in their respective state courts and with the arbitration panels, and several issues remain to be resolved by the courts that may affect the final amount of the 2004 NPM adjustment PM USA and other PMs will receive. In September 2023, the New Mexico trial court vacated the arbitration panel’s decision finding that New Mexico was not diligent in 2004. PM USA and other PMs have appealed that decision, and the appeals remain pending. PM USA had recorded $21 million and $3 million as a reduction in cost of sales in the third quarter of 2021 and fourth quarter of 2022, respectively, for its estimate of the minimum principal amount of the 2004 NPM Adjustment it received. PM USA had recorded $23 million and $5 million as interest income in the third quarter of 2021 and fourth quarter of 2022, respectively, for its estimate of the interest amount it received in connection with the 2004 NPM Adjustment.

▪2005-2007 NPM Adjustments. The PMs and the eight states that have not settled the NPM Adjustment disputes are currently arbitrating NPM Adjustment disputes before a single arbitration panel. The arbitration encompasses three years, 2005-2007, for seven of the eight states, and one year, 2005, for one state. As of October 23, 2023, no decisions have resulted from the arbitration.

▪Subsequent Years. No assurance can be given as to when proceedings for 2008 and subsequent years will be scheduled or the precise form those proceedings will take.

▪In November 2022, the State of New Mexico filed a motion in New Mexico state court against the PMs, including PM USA, claiming that the PMs wrongfully disputed the applicability of NPM Adjustments to New Mexico and that all adjustment amounts to date should have been paid to New Mexico rather than deposited into the disputed payments account. PM USA has placed certain disputed NPM Adjustment amounts attributed to New Mexico in the disputed payments account established pursuant to the terms of the MSA. New Mexico seeks a total of approximately $84 million in disputed payments from all defendants combined, as well as treble and punitive damages, and other relief. The PMs filed a cross motion to compel arbitration in the New Mexico matter. No decisions have resulted from these motions.

Other Disputes Under the State Settlement Agreements: The payment obligations of the tobacco product manufacturers that are parties to the State Settlement Agreements, as well as the allocations of any NPM Adjustments and related settlements, have been and may continue to be affected by R.J. Reynolds’s acquisition of Lorillard in 2015 and its related sale of certain cigarette brands to ITG (the “ITG transferred brands”). PM USA filed motions to enforce the State Settlement Agreements in Florida, Minnesota, Texas and Mississippi in connection with various positions that R.J. Reynolds and ITG took with regard to the ITG transferred brands. After various court decisions in each of those states that were favorable to PM USA, those motions to enforce have now been resolved either through settlement or exhaustion of appeals, although further proceedings may occur based on the resolution of certain outstanding litigation between R.J. Reynolds and ITG. In May 2022, PM USA filed a motion to compel arbitration under the MSA regarding certain positions that R.J. Reynolds and ITG took with regard to the ITG transferred brands. In June 2022, the matter was resolved through mutual agreement of the parties. PM USA continues to dispute how the ITG transferred brands are treated in allocating the NPM Adjustments under the MSA and related settlements and may pursue such claims.

In December 2019, the State of Mississippi filed a motion in Mississippi state court seeking to enforce the Mississippi State Settlement Agreement against PM USA, R.J. Reynolds and ITG concerning the tax rates used in the annual calculation of the net operating profit adjustment payments starting in 2018. The Mississippi state court held a hearing in October 2021 and issued a decision in June 2022 granting the State’s motion. Further proceedings remain outstanding, and a final judgment has not yet been issued.

In May 2023, PM USA and R.J. Reynolds filed a motion in the United States District Court for the Eastern District of Texas seeking to enforce the Texas State Settlement Agreement against the State of Texas concerning the same tax rate issue raised by the State of Mississippi. The State of Texas filed a cross-motion to enforce, and the matter remains pending in the trial court.

In January 2021, PM USA and other PMs reached an agreement with several MSA states to waive the PMs’ claim under the most favored nation provision of the MSA in connection with a settlement between those MSA states and a non-participating manufacturer, S&M Brands, Inc. (“S&M Brands”), under which the states released certain claims against S&M Brands in exchange for receiving a portion of the funds S&M Brands deposited into escrow accounts in those states pursuant to the states’ escrow statutes. In consideration for waiving its most favored nation claim, PM USA received approximately $32 million from

32

the escrow funds paid to those MSA states under their settlement with S&M Brands. These funds were received in January 2021 and were recorded in our condensed consolidated statement of earnings (losses) for the first quarter of 2021 as a reduction in cost of sales.

Federal Government’s Lawsuit: In 1999, the U.S. government filed a lawsuit in the U.S. District Court for the District of Columbia against various cigarette manufacturers, including PM USA, and others, including Altria, asserting claims under three federal statutes. The case ultimately proceeded only under the civil provisions of RICO. In August 2006, the district court held that certain defendants, including Altria and PM USA, violated RICO and engaged in certain “sub-schemes” to defraud that the government had alleged.

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

Corrective statements began appearing in newspapers and on television in the fourth quarter of 2017 and on websites in the second quarter of 2018, and the onserts began appearing in the fourth quarter of 2018. In December 2022, the district court entered a consent order approving a settlement with respect to corrective statements on point-of-sale signage.

In 2022, we recorded provisions totaling approximately $28 million for the estimated costs of implementing the corrective statements on point-of-sale signage remedy.

In June 2020, the U.S. government filed a motion with the district court asking for clarification as to whether the court-ordered injunction that applies to cigarettes discussed above also applies to HeatSticks, a heated tobacco product used with the IQOS System. In August 2020, we filed an opposition to the government’s motion and, in the alternative, a motion to modify the injunction to make clear it does not apply to HeatSticks. In July 2023, the district court ruled that HeatSticks are cigarettes as defined in the court ordered injunction. The district court also ruled that PM USA can make FDA authorized reduced exposure claims about HeatSticks. In September 2023, PM USA appealed the district court’s ruling that HeatSticks are subject to the court’s injunction.

E-vapor Product Litigation

As of October 23, 2023, we are defendants in 57 class action lawsuits, 3,614 individual lawsuits and 1,506 “third party” lawsuits relating to JUUL e-vapor products, which include school districts, state and local governments and tribal and healthcare organization lawsuits. We refer to this litigation collectively as the “Multidistrict Litigation.” The 57 class action lawsuits include 32 cases involving plaintiffs whose claims were previously included in other class action complaints but were refiled as separate stand-alone class actions for procedural and other reasons. Three of the class action lawsuits are pending in Canada. The theories of recovery in the Multidistrict Litigation include violation of RICO, fraud, failure to warn, design defect, negligence and unfair trade practices. Plaintiffs seek various remedies, including compensatory and punitive damages, restitution or remediation (for plaintiffs that are government entities) and an injunction prohibiting product sales.

An additional group of cases is pending in California state courts. In January 2020, the Judicial Council of California determined that this group of cases was appropriate for coordination and assigned the group to the Superior Court of California, Los Angeles County, for pretrial purposes.

In May 2023, we reached agreement on terms to resolve the majority of the Multidistrict Litigation lawsuits as well as the group of cases pending in a consolidated California state court proceeding for $235 million, for which amount we recorded a pre-tax provision in the second quarter of 2023. The settlement is conditioned on certain participation rates among plaintiffs, and the class action portion of the settlement is subject to final approval by the court. The settlement applies to all of the Multidistrict Litigation except 35 “third party” cases brought by Native American tribes and the three class action lawsuits pending in Canada. The settlement also does not apply to the cases brought by the attorneys general of Alaska, Hawaii and New Mexico, discussed below, or 17 putative class actions antitrust lawsuits. For a description of the antitrust cases not subject to the settlement, see Antitrust Litigation below.

Four of the “third party” lawsuits noted above against us and JUUL were initiated, individually, by the attorneys general of Alaska, Hawaii, Minnesota and New Mexico alleging violations of state consumer protection and other similar laws. We filed motions to dismiss the lawsuits. In Alaska, Hawaii and Minnesota, the motions were denied in February 2022, May 2021 and June 2021, respectively. Our motion to dismiss remains pending in New Mexico. In the Alaska lawsuit, although the trial court declined to dismiss most of the plaintiff’s claims, the trial court did dismiss plaintiff’s public nuisance claim. In April 2023, we agreed to settle the Minnesota lawsuit for an immaterial amount. The trial courts in the Alaska and Hawaii lawsuits have set the

33

trials for October 2024 and February 2024, respectively. As of October 23, 2023, the trial court in New Mexico has not set a trial date.

In May 2023, Fuma International LLC (“Fuma”) filed a lawsuit against Altria and our affiliates Nu Mark LLC (“Nu Mark”), AGDC, ALCS and NJOY in the United States District Court for the Eastern District of Virginia asserting claims of patent infringement based on the sale of various Nu Mark and NJOY products, including NJOY ACE, in the United States. In August 2023, we entered into an agreement with Fuma resulting in NJOY’s acquisition of the patents that Fuma asserted in its lawsuit. The parties separately agreed that Fuma would dismiss its patent infringement claims in exchange for $10 million, and such claims were dismissed in August 2023. We recorded a pre-tax provision for $10 million in the third quarter of 2023 related to the agreement and paid such amount to Fuma in August 2023.

In June 2023, JUUL and VMR Products LLC filed a lawsuit against Altria and our affiliates AGDC, ALCS, NJOY Holdings and NJOY in the United States District Court for the District of Arizona asserting claims of patent infringement based on the sale of NJOY ACE in the United States. Plaintiffs seek various remedies, including damages and an injunction on sales of NJOY ACE. The lawsuit is currently stayed.

Also in June 2023, the same plaintiffs filed a related action against the same defendants with the U.S. International Trade Commission (“ITC”). There, the plaintiffs also allege patent infringement, but the remedies sought include a prohibition on the importation of NJOY ACE into the United States. No damages are recoverable in the proceedings before the ITC.

In August 2023, NJOY filed a complaint against JUUL in the United States District Court for the District of Delaware asserting claims of patent infringement based on the sale of certain JUUL e-vapor products, including the currently marketed JUUL device and JUULpods, in the United States. Also in August 2023, NJOY filed a related action against JUUL with the ITC alleging patent infringement and seeking a ban on the importation and sale of the same JUUL products in the United States.

IQOS Litigation

In April 2020, RAI Strategic Holdings, Inc. and R.J. Reynolds Vapor Co., which are affiliates of R.J. Reynolds, filed a lawsuit against Altria, PM USA, ALCS, PMI and its affiliate, Philip Morris Products S.A., in the U.S. District Court for the Eastern District of Virginia asserting claims of patent infringement based on the sale of the IQOS System electronic device and Marlboro HeatSticks in the United States. Plaintiffs seek various remedies, including preliminary and permanent injunctive relief, treble damages and attorneys’ fees. Altria and PMI were previously dismissed from the lawsuit, and plaintiffs’ claims against the other defendants have been stayed.

PM USA, ALCS and Philip Morris Products S.A. filed counterclaims against plaintiffs in the Eastern District of Virginia lawsuit alleging patent infringement by R.J. Reynolds’ e-vapor products. In June 2022, PM USA and ALCS reached an agreement with R.J. Reynolds resulting in dismissal of their counterclaims. In addition, ALCS filed a separate lawsuit against R.J. Reynolds in the U.S. District Court for the Middle District of North Carolina also alleging patent infringement by R.J. Reynolds’ e-vapor products. In September 2022, a jury awarded ALCS $95 million in damages for past infringement, plus supplemental damages and interest. In January 2023, the court ordered R.J. Reynolds to pay ALCS a 5.25% royalty on future sales of its infringing product resulting in positive net income through the expiration of the relevant patents in 2035. R.J. Reynolds has filed a notice of appeal of the judgment. As gains related to this lawsuit have not yet been determined to be realized or realizable in accordance with GAAP, they have not been recognized in our financial statements for the nine and three months ended September 30, 2023.

In April 2020, a related patent infringement action was filed against the same defendants by the same plaintiffs, as well as R.J. Reynolds, with the ITC, but the remedies sought included a prohibition on the importation of the IQOS System electronic device, Marlboro HeatSticks and component parts into the United States and on the sale of any such products previously imported into the United States. No damages are recoverable in the proceedings before the ITC. In September 2021, the ITC issued a limited exclusion order barring the importation of the IQOS System electronic device, Marlboro HeatSticks and the infringing components into the United States and a cease and desist order barring domestic sales, marketing and distribution of these imported products. The orders became effective on November 29, 2021. Consequently, PM USA removed the IQOS System electronic device and Marlboro HeatSticks from the marketplace. In December 2021, defendants appealed the orders to the U.S. Court of Appeals for the Federal Circuit and, in March 2023, the U.S. Court of Appeals for the Federal Circuit issued its decision affirming the ITC exclusion order in full.

In November 2020, Healthier Choices Management Corp. filed an additional unrelated patent infringement case in the U.S. District Court for the Northern District of Georgia against PM USA and Philip Morris Products S.A. seeking damages and equitable relief. In February 2021, defendants filed a motion to dismiss the lawsuit, which the court granted in July 2021. In December 2021, the U.S. District Court denied plaintiff’s motion to amend the complaint and plaintiff appealed this ruling to the U.S. Court of Appeals for the Federal Circuit, which reversed the district court’s decision and remanded for further proceedings. On remand, the U.S. District Court stayed the case pending the outcome of plaintiff’s appeal from a ruling by the

34

U.S. Patent and Trademark Office, which issued a decision that the claims of the asserted patent are not valid. That appeal remains pending.

Antitrust Litigation

In March 2023, we entered into a stock transfer agreement with JUUL pursuant to which, among other things, we transferred to JUUL all of our beneficially owned JUUL equity securities. See Note 5. Investments in Equity Securities for a discussion of our disposition of our investment in JUUL.

In April 2020, the FTC issued an administrative complaint against Altria and JUUL alleging that our 35% investment in JUUL and the associated agreements constitute an unreasonable restraint of trade in violation of Section 1 of the Sherman Antitrust Act of 1890 (“Sherman Act”) and Section 5 of the Federal Trade Commission Act of 1914, and substantially lessened competition in violation of Section 7 of the Clayton Antitrust Act (“Clayton Act”). In February 2022, the administrative law judge dismissed the FTC’s complaint and, also in February 2022, FTC complaint counsel appealed the administrative law judge’s decision to the FTC. In March 2023, following our disposition of our investment in JUUL, we filed a motion to dismiss the complaint. In June 2023, the FTC dismissed the action as no longer in the public interest.

Also as of October 23, 2023, 17 putative class action lawsuits have been filed against Altria and JUUL in the U.S. District Court for the Northern District of California. The lawsuits initially named, in addition to the two companies, certain senior executives and certain members of the board of directors of both companies as defendants; however, those individuals currently or formerly affiliated with Altria were later dismissed. In November 2020, these lawsuits were consolidated into three complaints (one on behalf of direct purchasers, one on behalf of indirect purchasers and one on behalf of indirect resellers). The consolidated lawsuits, as amended, cite the FTC administrative complaint and allege that Altria and JUUL violated Sections 1, 2 and/or 3 of the Sherman Act and Section 7 of the Clayton Act and various state antitrust, consumer protection and unjust enrichment laws by restraining trade and/or substantially lessening competition in the U.S. closed-system electronic cigarette market. Plaintiffs seek various remedies, including treble damages, attorneys’ fees, a declaration that the agreements between Altria and JUUL are invalid and rescission of the transaction. We filed a motion to dismiss these lawsuits in January 2021. In August 2021, the U.S. District Court for the Northern District of California denied our motion to dismiss except with respect to plaintiffs’ claims for injunctive and equitable relief. However, plaintiffs were granted the opportunity to replead such claims by the trial court, which plaintiffs did in September 2021. In January 2022, the trial court ordered that the direct-purchaser plaintiffs’ claims against JUUL be sent to arbitration pursuant to an arbitration provision in JUUL’s online purchase agreement. The court granted plaintiffs’ leave to replead the complaint with new direct-purchaser plaintiffs, which plaintiffs did in February 2022, substituting four new plaintiffs. In September 2023, the direct-purchaser plaintiffs filed a third amended consolidated class action complaint, substituting three of the four named plaintiffs. The trial is set to commence in May 2026.

Shareholder Class Action and Shareholder Derivative Lawsuits

Shareholder Class Action: In the fourth quarter of 2021, we agreed to settle a class action lawsuit brought by purported Altria shareholders against Altria and certain of our current and former executives and JUUL, its founders and certain of its current and former executives alleging false and misleading statements and omissions relating to our former investment in JUUL. Pursuant to the settlement, which was granted final approval by the trial court in March 2022, among other things, (i) all claims asserted against Altria and the other named defendants were resolved without any liability or wrongdoing attributed to them personally or to Altria and (ii) Altria agreed to pay the class an aggregate amount of $90 million, which amount included attorneys’ fees. We recorded pre-tax provisions totaling $90 million in 2021 and, in January 2022, paid $90 million to plaintiffs’ escrow account.

Federal and State Shareholder Derivative Lawsuits: In October 2022, we agreed to settle a series of federal and state derivative cases brought by Altria shareholders on behalf of themselves and Altria against Altria and certain of our current and former executives and directors and JUUL, its founders and certain of its current and former executives. The cases related to our former investment in JUUL and asserted claims of breach of fiduciary duty by the Altria defendants and aiding and abetting in that alleged breach of fiduciary duty by the remaining defendants.

Under the terms of the settlement, which became effective in May 2023, among other things, we agreed to provide $100 million in funding over a five-year period to underage tobacco prevention and cessation programs, which may include positive youth development programs, led by independent third-party organizations. We expect to begin funding in 2024. In 2022, we recorded pre-tax provisions totaling $27 million for costs associated with the independent monitoring of our funding commitments and attorneys’ fees. In the first quarter of 2023, we recorded pre-tax provisions totaling approximately $100 million related to the settlement, and in April 2023, paid $15 million to plaintiffs’ escrow account for attorneys’ fees.

Certain Other Tobacco-Related Litigation

“Lights/Ultra Lights” Cases and Other Smoking and Health Class Actions: Plaintiffs have sought certification of their cases as class actions, alleging among other things, that the uses of the terms “Lights” and/or “Ultra Lights” constitute deceptive and unfair trade practices, common law or statutory fraud, unjust enrichment or breach of warranty, and have sought injunctive and

35

equitable relief, including restitution and, in certain cases, punitive damages. These class actions have been brought against PM USA and, in certain instances, Altria or our other subsidiaries, on behalf of individuals who purchased and consumed various brands of cigarettes. Defenses raised in these cases include lack of misrepresentation, lack of causation, injury and damages, the statute of limitations, non-liability under state statutory provisions exempting conduct that complies with federal regulatory directives, and the First Amendment. Twenty-one state courts in 23 “Lights” cases have refused to certify class actions, dismissed class action allegations, reversed prior class certification decisions or have entered judgment in favor of PM USA. As of October 23, 2023, two “Lights/Ultra Lights” class actions are pending in U.S. state courts. Neither case is active.

As of October 23, 2023, one smoking and health case alleging personal injury or seeking court-supervised programs or an ongoing medical monitoring program on behalf of individuals exposed to environmental tobacco smoke and purporting to be brought on behalf of a class of individual plaintiffs, is pending in a U.S. state court. The case is currently inactive.

UST Litigation: UST and/or its tobacco subsidiaries have been named in a number of individual tobacco and health lawsuits over time. Plaintiffs’ allegations of liability in these cases have been based on various theories of recovery, such as negligence, strict liability, fraud, misrepresentation, design defect, failure to warn, breach of implied warranty, addiction and breach of consumer protection statutes. Plaintiffs have typically sought various forms of relief, including compensatory and punitive damages, and certain equitable relief, including disgorgement. Defenses raised in these cases have included lack of causation, assumption of the risk, comparative fault and/or contributory negligence, and statutes of limitations. As of October 23, 2023, there is no such case pending against UST and/or its tobacco subsidiaries.

Environmental Regulation

Altria and our former subsidiaries are subject to various federal, state and local laws and regulations concerning the discharge of materials into the environment, or otherwise related to environmental protection, including, in the United States: the Clean Air Act, the Clean Water Act, the Resource Conservation and Recovery Act and the Comprehensive Environmental Response, Compensation and Liability Act (commonly known as “Superfund”), which can impose joint and several liability on each responsible party. Altria and our former subsidiaries are involved in several cost recovery/contribution cases subjecting them to potential costs of remediation and natural resource damages under Superfund or other laws and regulations. We expect to continue to make capital and other expenditures in connection with environmental laws and regulations.

We provide for expenses associated with environmental remediation obligations on an undiscounted basis when such amounts are probable and can be reasonably estimated. Such accruals are adjusted as new information develops or circumstances change. Other than those amounts, it is not possible to reasonably estimate the cost of any environmental remediation and compliance efforts that we may undertake in the future. In the opinion of our management, however, compliance with environmental laws and regulations, including the payment of any remediation costs or damages and the making of related expenditures, has not had, and is not expected to have, a material adverse effect on our condensed consolidated results of operations, capital expenditures, financial position or cash flows.

Guarantees and Other Similar Matters

In the ordinary course of business, we have agreed to indemnify a limited number of third parties in the event of future litigation. At September 30, 2023, we (i) had $44 million of unused letters of credit obtained in the ordinary course of business and (ii) were contingently liable for guarantees related to our own performance, including $22 million for surety bonds recorded on our condensed consolidated balance sheet. In addition, from time to time, we issue lines of credit to affiliated entities. These items have not had, and are not expected to have, a significant impact on our liquidity.

Under the terms of a distribution agreement between Altria and PMI (the “Distribution Agreement”), entered into as a result of our 2008 spin-off of our former subsidiary PMI, liabilities concerning tobacco products will be allocated based in substantial part on the manufacturer. PMI will indemnify Altria and PM USA for liabilities related to tobacco products manufactured by PMI or contract manufactured for PMI by PM USA, and PM USA will indemnify PMI for liabilities related to tobacco products manufactured by PM USA, excluding tobacco products contract manufactured for PMI. We do not have a related liability recorded on our condensed consolidated balance sheet at September 30, 2023 as the fair value of this indemnification is insignificant. PMI has agreed not to seek indemnification with respect to the IQOS System patent litigation discussed above under IQOS Litigation, excluding the patent infringement case filed with the U.S. District Court for the Northern District of Georgia.

PM USA has issued guarantees relating to our obligations under our outstanding debt securities, any borrowings under our $3.0 billion New Credit Agreement and amounts outstanding under our commercial paper program. For further discussion, see Note 11. Debt.

36

Note 14. New Accounting Guidance Not Yet Adopted

The following table provides a description of issued accounting guidance applicable to, but not yet adopted by, us:

Standards	Description	Effective Date for Public Entity	Effect on Financial Statements
ASU 2022-03 Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions	The guidance clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments also specify required disclosures for equity securities subject to contractual sale restrictions.	The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2023.	We do not expect our adoption of this guidance to have a material impact on our consolidated financial statements and related disclosures.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

When used in this Quarterly Report on Form 10-Q (“Form 10-Q”), the terms “Altria,” “we,” “us” and “our” refer to either (i) Altria Group, Inc. and its consolidated subsidiaries or (ii) Altria Group, Inc. only and not its consolidated subsidiaries, as appropriate in the context.

In this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) section, we refer to the following “adjusted” financial measures: adjusted operating companies income (loss) (“OCI”); adjusted OCI margins; adjusted net earnings; adjusted diluted earnings per share (“EPS”); and adjusted effective tax rates. We also refer to the ratio of debt-to-Consolidated EBITDA (earnings before interest, taxes, depreciation and amortization, as defined in our credit agreement, which includes certain adjustments). These financial measures are not required by, or calculated in accordance with, United States generally accepted accounting principles (“GAAP”) and may not be calculated the same as similarly titled measures used by other companies. These financial measures should thus be considered as supplemental in nature and not considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP. For a further description of these non-GAAP financial measures, see the Non-GAAP Financial Measures section below.

Executive Summary

Our Business

We have a leading portfolio of tobacco products for U.S. tobacco consumers age 21+. Our Vision is to responsibly lead the transition of adult smokers to a smoke-free future (“Vision”). We are Moving Beyond Smoking™, leading the way in moving adult smokers away from cigarettes by taking action to transition millions to potentially less harmful choices - believing it is a substantial opportunity for adult tobacco consumers, our businesses and society.

As we execute on our Vision, we established our 2028 Enterprise Goals (“2028 Goals”) to provide our investors with specific metrics to measure our progress. Our 2028 Goals are:

Corporate

▪Deliver mid-single digits adjusted diluted EPS growth on a compounded annual basis through 2028;

▪Maintain a new progressive dividend goal targeting mid-single digits dividend growth annually through 2028;

▪Target a debt-to-Consolidated EBITDA ratio of approximately 2.0x;

▪Maintain our leadership position in the U.S. tobacco space; and

▪Maintain a total adjusted OCI margin of at least 60% in each of the next five years while investing behind innovative smoke-free products.

U.S. Smoke-Free Portfolio

▪Grow U.S. smoke-free volumes by at least 35% from our 2022 base of 800 million units by 2028; and

▪Approximately double our U.S. smoke-free net revenues to $5 billion by 2028 from our 2022 base of $2.6 billion, with $2 billion sourced from innovative smoke-free products.

Long-Term Growth

▪Develop a strategy by the first half of 2024 to compete in the international innovative smoke-free and non-nicotine categories.

See Operating Results by Business Segment and Liquidity and Capital Resources for additional information on total adjusted OCI margin and debt-to-Consolidated EBITDA, respectively.

Our wholly owned subsidiaries include leading manufacturers of both combustible and smoke-free products. In combustibles, we own Philip Morris USA Inc. (“PM USA”), the most profitable U.S. cigarette manufacturer, and John Middleton Co. (“Middleton”), a leading U.S. cigar manufacturer.

37

Our smoke-free portfolio includes ownership of U.S. Smokeless Tobacco Company LLC (“USSTC”), the leading global moist smokeless tobacco (“MST”) manufacturer, Helix Innovations LLC (“Helix”), a leading manufacturer of oral nicotine pouches, and NJOY, LLC (“NJOY”), currently the only e-vapor manufacturer with market authorizations from the U.S. Food and Drug Administration (“FDA”) for a pod-based e-vapor product. Additionally, we have a majority-owned joint venture, Horizon Innovations LLC (“Horizon”), for the U.S. marketing and commercialization of heated tobacco stick products (“HTS”) and, through a separate agreement, we have the exclusive U.S. commercialization rights to the IQOS Tobacco Heating System (“IQOS System”) and Marlboro HeatSticks through April 2024. As of this filing, there are no products in the U.S. marketplace from the joint venture or exclusive rights agreement.

In March 2023, we entered into a stock transfer agreement with JUUL Labs, Inc. (“JUUL”) pursuant to which we transferred to JUUL all of our beneficially owned JUUL equity securities. In exchange, we received a non-exclusive, irrevocable global license to certain of JUUL’s heated tobacco intellectual property.

Our investments in equity securities include Anheuser-Busch InBev SA/NV (“ABI”), the world’s largest brewer, and Cronos Group Inc. (“Cronos”), a leading Canadian cannabinoid company.

On June 1, 2023, we acquired NJOY Holdings, Inc. (“NJOY Holdings”) for a total consideration of approximately $2.9 billion (“NJOY Transaction”), which includes the fair value of contingent consideration and is subject to post-closing adjustments. For further details, see Note 2. Acquisition of NJOY to our condensed consolidated financial statements in Part 1, Item 1. Financial Statements of this Form 10-Q (“Item 1”).

The brand portfolios of our operating companies include Marlboro, Black & Mild, Copenhagen, Skoal, on! and NJOY. Trademarks related to Altria referenced in this Form 10-Q are the property of Altria or our subsidiaries or are used with permission.

Trends and Developments

In this MD&A section, we discuss factors that have impacted our business as of the date of this Form 10-Q. In addition, we are aware of and address, in this section and other MD&A sections, certain trends and developments that could, individually or in the aggregate, have a material impact on our business, including the value of our investments in equity securities, in the future. We focus in this Trends and Developments section on the continued elevated rate of inflation, supply chain disruptions, ongoing geopolitical events, recent regulatory actions and illicit e-vapor products and their effects or potential effects on our business, including impacts on adult tobacco consumers and their purchasing behaviors.

We continue to monitor the evolving macroeconomic and geopolitical landscapes. While inflation reports during 2023 from the U.S. Bureau of Labor Statistics have shown a decline in the rate of increase, inflation remains above the Federal Reserve’s target of 2%, driven by increased global energy, commodity and food prices. We continue to observe discretionary income pressures on adult tobacco consumers as a result of the cumulative effect of high inflation. During the third quarter of 2023, cigarette retail share for the industry discount segment was up year-over-year but was unchanged from the first half of 2023. We will continue to monitor the effect of these dynamics on adult tobacco consumer purchase behaviors, including overall tobacco product expenditures, mix between premium and discount brand purchases and adoption of smoke-free products. We expect inflationary pressures to continue to impact adult tobacco consumers’ purchase behaviors for the remainder of the year. Increases in inflation also have a direct and adverse impact on our Master Settlement Agreement (“MSA”) expense and other direct and indirect costs.

In the e-vapor category, illegal flavored disposable product usage has continued to increase through 2023 and currently comprises a significant portion of the e-vapor category. One of the impacts of this trend has been an increase in the rate of cross-category movement among adult cigarette smokers, contributing to higher than expected domestic cigarette industry volume declines.

Volatility in domestic and global economies and disruptions in the supply and distribution chains have continued in 2023, resulting from several factors, including the on-going impacts of inflation, supply and demand imbalances across many sectors such as energy and commodities, raw materials availability, congested shipping operations and geopolitical events. We continue to work to mitigate the potential negative impacts of these macroeconomic and geopolitical dynamics on our businesses through, among other actions, proactive engagement with current and potential suppliers and distributors, the development of alternative sourcing strategies, entry into long-term supply contracts and prudent oversight of our liquidity.

Tobacco companies are subject to broad and evolving regulatory and legislative frameworks that could have a material impact on our business. For example, the FDA has submitted for final review proposed product standards regarding menthol in cigarettes and characterizing flavors in cigars, and the Biden Administration published plans for future potential regulatory actions that include the FDA’s plans to develop a proposed product standard that would establish a maximum nicotine level for cigarettes and certain other combustible tobacco products. In California, where a ban on flavored nicotine products went into effect in late 2022, we continue to observe indications of negative unintended consequences of the ban, such as adult tobacco consumer adoption of unregulated products and the development of illicit markets.

38

See Operating Results by Business Segment - Tobacco Space - Business Environment for additional information on the trends and developments discussed above.

Adverse macroeconomic and geopolitical landscapes have continued in 2023, which have impacted global businesses, including ABI. In particular, ABI’s business has been impacted by foreign exchange rate fluctuations, inflation and commodity cost headwinds. Additionally, the macroeconomic and geopolitical factors have contributed to significant changes in certain foreign exchange rates, including the Euro to U.S. dollar exchange rate, and in the global equity markets. We will continue to monitor these conditions and other factors as they could affect our equity earnings that we receive from ABI and the fair value of our equity investment in ABI.

See Note 5. Investments in Equity Securities to our condensed consolidated financial statements in Item 1 (“Note 5”) for additional information on our investments in equity securities.

The trends and developments discussed above have not had a material adverse impact on our condensed consolidated financial statements, but we continue to monitor these trends and developments and potential financial impacts. Additionally, we do not believe that these trends and developments have materially impacted our ability to achieve our Vision. As the trends and developments discussed above evolve and new ones emerge, we will continue to evaluate the potential impacts on our business, investments and Vision.

39

Consolidated Results of Operations for the Nine Months Ended September 30, 2023

The changes in net earnings and diluted EPS for the nine months ended September 30, 2023, from the nine months ended September 30, 2022, were due primarily to the following:

(in millions, except per share data)	Net Earnings			Diluted EPS
For the nine months ended September 30, 2022	$	3,074		$	1.69
2022 NPM Adjustment Items	(45)			(0.02)
2022 Acquisition, disposition and integration-related items	8			—
2022 Tobacco and health and certain other litigation items	76			0.04
2022 JUUL changes in fair value	1,355			0.76
2022 ABI-related special items	2,022			1.12
2022 Cronos-related special items	172			0.09
2022 Income tax items	(33)			(0.02)
Subtotal 2022 special items	3,555			1.97
2023 NPM Adjustment Items	11			—
2023 Acquisition, disposition and integration-related items	(10)			—
2023 Tobacco and health and certain other litigation items	(318)			(0.18)
2023 Loss on disposition of JUUL equity securities	(250)			(0.14)
2023 ABI-related special items	(43)			(0.02)
2023 Cronos-related special items	(30)			(0.02)
2023 Income tax items	(29)			(0.02)
Subtotal 2023 special items	(669)			(0.38)
Fewer shares outstanding	—			0.06
Change in tax rate	21			0.01
Operations	89			0.05
For the nine months ended September 30, 2023	$	6,070		$	3.40
2023 Reported Net Earnings	$	6,070		$	3.40
2022 Reported Net Earnings	$	3,074		$	1.69
% Change	97.5		%	100%+
2023 Adjusted Net Earnings and Adjusted Diluted EPS	$	6,739		$	3.78
2022 Adjusted Net Earnings and Adjusted Diluted EPS	$	6,629		$	3.66
% Change	1.7		%	3.3		%

For a discussion of special items and other business drivers affecting the comparability of statements of earnings amounts and reconciliations of adjusted earnings and adjusted diluted EPS, see the Consolidated Operating Results section below.

▪Fewer Shares Outstanding: Fewer shares outstanding were due to shares we repurchased under our share repurchase programs.

▪Operations: The increase of $89 million in operations (which excludes the impact of special items shown in the table above) was due primarily to:

•higher OCI;

•higher income from our investments in equity securities, net; and

•lower interest and other debt expense, net;

partially offset by:

•lower net periodic benefit income; and

•higher amortization of intangible assets (due primarily to the NJOY Transaction).

For further details, see the Consolidated Operating Results and Operating Results by Business Segment sections below.

40

Consolidated Results of Operations for the Three Months Ended September 30, 2023

The changes in net earnings and diluted EPS for the three months ended September 30, 2023, from the three months ended September 30, 2022, were due primarily to the following:

(in millions, except per share data)	Net Earnings			Diluted EPS
For the three months ended September 30, 2022	$	224		$	0.12
2022 Acquisition, disposition and integration-related items	1			—
2022 Tobacco and health and certain other litigation items	32			0.02
2022 JUUL changes in fair value	100			0.06
2022 ABI-related special items	1,980			1.10
2022 Cronos-related special items	5			—
2022 Income tax items	(42)			(0.02)
Subtotal 2022 special items	2,076			1.16
2023 NPM Adjustment Items	11			—
2023 Acquisition, disposition and integration-related items	(9)			—
2023 Tobacco and health and certain other litigation items	(17)			(0.01)
2023 ABI-related special items	(65)			(0.03)
2023 Income tax items	(29)			(0.02)
Subtotal 2023 special items	(109)			(0.06)
Fewer shares outstanding	—			0.01
Change in tax rate	14			0.01
Operations	(39)			(0.02)
For the three months ended September 30, 2023	$	2,166		$	1.22
2023 Reported Net Earnings	$	2,166		$	1.22
2022 Reported Net Earnings	$	224		$	0.12
% Change	100%+			100%+
2023 Adjusted Net Earnings and Adjusted Diluted EPS	$	2,275		$	1.28
2022 Adjusted Net Earnings and Adjusted Diluted EPS	$	2,300		$	1.28
% Change	(1.1)		%	—		%

For a discussion of special items and other business drivers affecting the comparability of statements of earnings amounts and reconciliations of adjusted earnings and adjusted diluted EPS, see the Consolidated Operating Results section below.

▪Fewer Shares Outstanding: Fewer shares outstanding were due to shares we repurchased under our share repurchase programs.

▪Operations: The decrease of $39 million in operations (which excludes the impact of special items shown in the table above) was due primarily to lower OCI.

For further details, see the Consolidated Operating Results and Operating Results by Business Segment sections below.

2023 Forecasted Results

We narrow our 2023 full-year adjusted diluted EPS forecast to be in a range of $4.91 to $4.98, representing a growth rate of 1.5% to 3% from a 2022 full-year adjusted diluted EPS base of $4.84, as shown in the first table below. Our 2023 full-year adjusted diluted EPS guidance range includes planned investments in support of our Vision, such as (i) continued smoke-free product research, development and regulatory preparation expenses, (ii) enhancement of our digital consumer engagement system and (iii) marketplace activities in support of our smoke-free products, including planned investments behind the U.S. commercialization of NJOY ACE (“ACE”). Our guidance range also includes estimated amortization charges of approximately $50 million related to intangible assets acquired in the NJOY Transaction.

While the 2023 full-year adjusted diluted EPS guidance accounts for a range of scenarios, the external environment remains dynamic. We will continue to monitor conditions related to (i) the economy, including the impact of high inflation, rising interest rates and global supply chain disruptions, (ii) adult tobacco consumer dynamics, including disposable income, purchasing patterns and adoption of smoke-free products and (iii) regulatory and legislative developments.

41

We continue to expect our 2023 full-year adjusted effective tax rate to be in a range of 24.5% to 25.5%.

Reconciliation of 2022 Reported Diluted EPS to 2022 Adjusted Diluted EPS
2022 Reported diluted EPS	$	3.19
NPM Adjustment Items	(0.03)
Tobacco and health and certain other litigation items	0.05
JUUL changes in fair value	0.81
ABI-related special items	1.12
Cronos-related special items	0.10
Income tax items	(0.40)
2022 Adjusted diluted EPS	$	4.84

The following (income) expense items are excluded from our 2023 forecasted adjusted diluted EPS growth rate:

(Income) Expense Excluded from 2023 Forecasted Adjusted Diluted EPS
Tobacco and health and certain other litigation items	$	0.18
Loss on disposition of JUUL equity securities	0.14
ABI-related special items	0.02
Cronos-related special items	0.02
Income tax items	0.02
	$	0.38

For a discussion of certain income and expense items excluded from the forecasted results above, see the Consolidated Operating Results section below.

Our full-year adjusted diluted EPS forecast and full-year forecast for our adjusted effective tax rate exclude the impact of certain income and expense items, including those items noted in the Non-GAAP Financial Measures section below, that our management believes are not part of underlying operations. Other than as set forth in the table immediately above, our management cannot estimate on a forward-looking basis the impact of these items on our reported diluted EPS or our reported effective tax rate because these items, which could be significant, may be unusual or infrequent, are difficult to predict and may be highly variable. As a result, we do not provide a corresponding GAAP measure for, or reconciliation to, our adjusted diluted EPS forecast or our adjusted effective tax rate forecast.

Non-GAAP Financial Measures

We report our financial results in accordance with GAAP. However, our management also reviews certain financial results, including OCI, OCI margins, net earnings and diluted EPS, on an adjusted basis, which excludes certain income and expense items that our management believes are not part of underlying operations. These items may include, for example, loss on early extinguishment of debt, restructuring charges, asset impairment charges, acquisition, disposition and integration-related items, equity investment-related special items (including any changes in fair value of our equity investment recorded at fair value), certain income tax items, charges associated with tobacco and health and certain other litigation items, and resolutions of certain non-participating manufacturer (“NPM”) adjustment disputes under the MSA (“NPM Adjustment Items”). In addition, our management reviews the ratio of debt-to-Consolidated EBITDA, which we use as a factor to determine our ability to access the capital markets and make investments in pursuit of our Vision. Consolidated EBITDA, as defined in our credit agreement, is calculated in accordance with our credit agreement (defined below in Liquidity and Capital Resources) and includes certain adjustments. Our management does not view any of these special items to be part of our underlying results as they may be highly variable, may be unusual or infrequent, are difficult to predict and can distort underlying business trends and results. Our management also reviews income tax rates on an adjusted basis, which may exclude certain income tax items from our reported effective tax rate.

Our management believes that the foregoing financial measures provide useful additional insight into underlying business trends and results, and provide a more meaningful comparison of year-over-year results. Our management uses these financial measures and regularly provides these to our chief operating decision maker (“CODM”) for planning, forecasting and evaluating business and financial performance, including allocating resources and evaluating results relative to employee compensation targets. The foregoing financial measures are not required by, or calculated in accordance with GAAP and may not be calculated the same as similarly titled measures used by other companies. The foregoing financial measures should thus be considered as supplemental in nature and not considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP. Except as noted in the 2023 Forecasted Results section above, when we provide a non-

42

GAAP measure in this Form 10-Q, we also provide a reconciliation of that non-GAAP financial measure to the most directly comparable GAAP financial measure.

Discussion and Analysis

Our critical accounting policies and estimates are discussed in our Annual Report on Form 10-K for the year ended December 31, 2022 (“2022 Form 10-K”); there have been no material changes to these critical accounting estimates, except as noted below.

Critical Accounting Estimates

Depreciation, Amortization, Impairment Testing and Asset Valuation

We conduct a required annual review of goodwill and indefinite-lived intangible assets for potential impairment and more frequently if an event occurs or circumstances change that would require an interim review. When performing a quantitative assessment of our reporting units and indefinite-lived intangible assets, we use an income approach to estimate fair values. The income approach reflects the discounting of expected future cash flows to their present value at a rate of return that incorporates the risk-free rate for the use of those funds, the expected rate of inflation and the risks associated with realizing expected future cash flows. This calculation may be affected by several factors, including general macroeconomic conditions, U.S. risk-free interest rates, changes in category growth rates (for example, as a result of changing adult tobacco consumer preferences) and competitive activity.

At December 31, 2022, the estimated fair value of our Skoal trademark exceeded its carrying value of $3.9 billion by approximately 12% ($0.5 billion).

MST products, including Skoal, have continued to be negatively impacted due in part to evolving adult tobacco consumer preferences, which has resulted in consumers increasingly moving across tobacco categories. The accelerated growth of innovative tobacco products, including oral nicotine pouches, and the related increase in competitive activity among tobacco categories in the current year have continued to contribute to reductions in sales volumes for MST products, including Skoal.

We believe if there is further acceleration in the decline in sales volume for Skoal that results in material revenue declines or if there are changes in general macroeconomic conditions, such as U.S. interest rates continuing to rise, there may be a material adverse effect on the significant assumptions used in performing our valuation, including volume, revenue, income, operating margins, perpetual growth rate and discount rate. These adverse effects, including if Skoal’s actual revenue and income or long-term outlook are significantly different from forecasted performance or if the discount rate used to estimate the fair value increases, could result in a material non-cash impairment of our Skoal trademark in future periods, which could have a material adverse effect on our consolidated financial statements.

Although the above referenced conditions indicate there has been a shift in adult consumer preferences, specifically related to MST products and oral nicotine pouches, considering the approximately 12% headroom as of December 31, 2022 and the current year operating results for Skoal, these conditions did not indicate an impairment was more likely than not as of September 30, 2023.

43

Consolidated Operating Results

	For the Nine Months Ended September 30,				For the Three Months Ended September 30,
(in millions)	2023		2022		2023		2022
Net Revenues:
Smokeable products	$	16,482	$	17,020	$	5,572	$	5,882
Oral tobacco products	1,993		1,948		685		670
All other	33		17		24		(2)
Net revenues	$	18,508	$	18,985	$	6,281	$	6,550
Excise Taxes on Products:
Smokeable products	$	2,945	$	3,289	$	976	$	1,108
Oral tobacco products	85		91		28		30
Excise taxes on products	$	3,030	$	3,380	$	1,004	$	1,138
Operating Income:
OCI:
Smokeable products	$	8,092	$	8,112	$	2,743	$	2,791
Oral tobacco products	1,314		1,262		455		425
All other	(17)		(27)		(4)		(7)
Amortization of intangibles	(87)		(54)		(42)		(19)
General corporate expenses	(551)		(192)		(63)		(78)
Operating income	$	8,751	$	9,101	$	3,089	$	3,112

As discussed further in Note 10. Segment Reporting to our condensed consolidated financial statements in Item 1 (“Note 10”), our CODM reviews OCI, which is defined as operating income before general corporate expenses and amortization of intangibles, to evaluate the performance of, and allocate resources to, our segments. Our management believes it is appropriate to disclose this measure to help investors analyze our business performance and trends.

44

The following table provides a reconciliation of adjusted net earnings and adjusted diluted EPS for the nine months ended September 30:

(in millions of dollars, except per share data)	Earnings before Income Taxes		Provision for Income Taxes		Net Earnings		Diluted EPS
2023 Reported	$	8,193	$	2,123	$	6,070	$	3.40
NPM Adjustment Items	(15)		(4)		(11)		—
Acquisition, disposition and integration-related items	14		4		10		—
Tobacco and health and certain other litigation items	424		106		318		0.18
Loss on disposition of JUUL equity securities	250		—		250		0.14
ABI-related special items	54		11		43		0.02
Cronos-related special items	30		—		30		0.02
Income tax items	—		(29)		29		0.02
2023 Adjusted for Special Items	$	8,950	$	2,211	$	6,739	$	3.78
2022 Reported	$	4,685	$	1,611	$	3,074	$	1.69
NPM Adjustment Items	(60)		(15)		(45)		(0.02)
Acquisition, disposition and integration-related items	10		2		8		—
Tobacco and health and certain other litigation items	101		25		76		0.04
JUUL changes in fair value	1,355		—		1,355		0.76
ABI-related special items	2,560		538		2,022		1.12
Cronos-related special items	180		8		172		0.09
Income tax items	—		33		(33)		(0.02)
2022 Adjusted for Special Items	$	8,831	$	2,202	$	6,629	$	3.66

The following table provides a reconciliation of adjusted net earnings and adjusted diluted EPS for the three months ended September 30:

(in millions of dollars, except per share data)	Earnings before Income Taxes		Provision for Income Taxes		Net Earnings		Diluted EPS
2023 Reported	$	2,908	$	742	$	2,166	$	1.22
NPM Adjustment Items	(15)		(4)		(11)		—
Acquisition, disposition and integration-related items	13		4		9		—
Tobacco and health and certain other litigation items	23		6		17		0.01
ABI-related special items	82		17		65		0.03
Income tax items	—		(29)		29		0.02
2023 Adjusted for Special Items	$	3,011	$	736	$	2,275	$	1.28
2022 Reported	$	407	$	183	$	224	$	0.12
Acquisition, disposition and integration-related items	1		—		1		—
Tobacco and health and certain other litigation items	43		11		32		0.02
JUUL changes in fair value	100		—		100		0.06
ABI-related special items	2,507		527		1,980		1.10
Cronos-related special items	5		—		5		—
Income tax items	—		42		(42)		(0.02)
2022 Adjusted for Special Items	$	3,063	$	763	$	2,300	$	1.28

45

The following special items affected the comparability of statements of earnings amounts for the nine and three months ended September 30, 2023 and 2022:

▪NPM Adjustment Items: For a discussion of NPM Adjustment Items and a breakdown of these items by segment, see Health Care Cost Recovery Litigation in Note 13. Contingencies to our condensed consolidated financial statements in Item 1 (“Note 13”) and NPM Adjustment Items in Note 10, respectively.

▪Acquisition, Disposition and Integration-Related Items: For a discussion of acquisition and integration-related costs and disposition-related interest income for the nine and three months ended September 30, 2023, see Note 2. Acquisition of NJOY to our condensed consolidated financial statements in Item 1 (“Note 2”) and Note 4. Goodwill and Other Intangible Assets, net, to our condensed consolidated financial statements in Item 1, respectively.

▪Tobacco and Health and Certain Other Litigation Items: For a discussion of tobacco and health and certain other litigation items and a breakdown of these costs by segment, see Note 13 and Tobacco and Health and Certain Other Litigation Items in Note 10, respectively.

▪Loss on Disposition and Changes in Fair Value of JUUL Equity Securities: We recorded a non-cash, pre-tax loss of $250 million related to the disposition of our JUUL equity securities for the nine months ended September 30, 2023 as (income) losses from investments in equity securities in our condensed consolidated statement of earnings.

We recorded non-cash, pre-tax unrealized losses of $1,355 million and $100 million for the nine and three months ended September 30, 2022, respectively, as (income) losses from investments in equity securities in our condensed consolidated statement of earnings as a result of decreases in the estimated fair value of our former investment in JUUL.

We recorded corresponding adjustments to the JUUL tax valuation allowance in 2023 and 2022.

For further discussion, see Note 5 and Note 12. Income Taxes to our condensed consolidated financial statements in Item 1 (“Note 12”).

▪ABI-Related Special Items: We recorded net pre-tax losses of $54 million and $82 million from our equity investment in ABI for the nine and three months ended September 30, 2023, respectively, consisting primarily of mark-to-market losses on certain ABI financial instruments associated with its share commitments.

We recorded net pre-tax losses of $2,560 million and $2,507 million from our equity investment in ABI for the nine and three months ended September 30, 2022, respectively, substantially all of which related to our non-cash impairment of our equity investment in ABI. For further discussion, see Note 5.

The ABI special items include our respective share of the amounts recorded by ABI and additional adjustments related to (i) conversion from international financial reporting standards to GAAP and (ii) adjustments to our investment required under the equity method of accounting.

▪Cronos-Related Special Items: We recorded net pre-tax expense consisting of the following:

	For the Nine Months Ended September 30,				For the Three Months Ended September 30,
(in millions)	2023		2022		2023		2022
Loss on Cronos-related financial instruments	$	—	$	14	$	—	$	—
(Income) losses from investments in equity securities (1)	30		166		—		5
Total Cronos-related special items - (income) expense	$	30	$	180	$	—	$	5

(1) Amounts include our share of special items recorded by Cronos and additional adjustments, if required under the equity method of accounting, related to our investment in Cronos including our $107 million non-cash pre-tax impairment of our investment in Cronos in the second quarter of 2022.

We recorded corresponding adjustments to the Cronos tax valuation allowance in 2023 and 2022 relating to the special items.

For further discussion, see Note 5 and Note 12.

▪Income Tax Items: We recorded income tax items of $29 million, for the nine and three months ended September 30, 2023, due primarily to tax expense associated with a tax basis adjustment related to our investment in ABI.

We recorded income tax items of $33 million and $42 million for the nine and three months ended September 30, 2022, respectively, due primarily to tax benefits associated with the release of a valuation allowance related to our prior Cronos warrant, partially offset by tax expense for tax reserves related to the disallowance of certain state tax credits.

46

Nine Months Ended September 30, 2023 Compared with Nine Months Ended September 30, 2022

Net revenues, which include excise taxes billed to customers, decreased $477 million (2.5%), due primarily to lower net revenues in the smokeable products segment.

Cost of sales decreased $176 million (3.6%), due primarily to lower shipment volume in our smokeable products segment, partially offset by higher per unit settlement charges, lower NPM Adjustment Items and higher manufacturing costs in our smokeable products segment.

Excise taxes on products decreased $350 million (10.4%), due to lower shipment volume in our smokeable products segment.

Marketing, administration and research costs increased $399 million (24.4%), due primarily to higher general corporate expenses, which included agreements in 2023 to resolve certain JUUL-related litigation and shareholder derivative lawsuits as discussed in Note 13, and acquisition-related costs associated with the NJOY Transaction, and higher amortization of intangible assets due primarily to the NJOY Transaction.

Operating income decreased $350 million (3.8%), due primarily to higher general corporate expenses and higher amortization of intangible assets, partially offset by higher operating results in our oral tobacco products segment.

Interest and other debt expense, net decreased $74 million (8.9%), due primarily to 2023 interest income associated with the sale of the IQOS System commercialization rights and higher interest income due to higher rates, partially offset by interest expense and fees associated with the term loan facility. For additional information related to the term loan facility, see Liquidity and Capital Resources.

Net periodic benefit income, excluding service cost, decreased by $42 million (30.7%), due to higher discount rates resulting in higher interest costs and lower estimated return on assets due to lower fair value of plan assets at December 31, 2022, partially offset by lower amortization of net unrecognized losses in 2023. For additional information, see Note 7. Benefit Plans to our condensed consolidated financial statements in Item 1.

(Income) losses from investments in equity securities, which were favorable $3,812 million (100%+), were positively impacted by favorable results from our equity investment in ABI (due primarily to our non-cash impairment of our investment in ABI in 2022), lower charges related to our former investment in JUUL equity securities and lower losses from our Cronos-related special items.

Provision for income taxes increased $512 million (31.8%), due primarily to lower pre-tax earnings in 2022 associated with our non-cash impairment of our investment in ABI.

Reported net earnings of $6,070 million increased $2,996 million (97.5%), due primarily to favorable results from our investments in equity securities and lower interest and other debt expense, net, partially offset by lower operating income, unfavorable income tax items and lower net periodic benefit income. Reported basic and diluted EPS of $3.40, each increased by 100%+ due to higher reported net earnings and fewer shares outstanding.

Adjusted net earnings of $6,739 million increased $110 million (1.7%), due primarily to higher OCI, higher income from our investments in equity securities and lower interest and other debt expense, net, partially offset by lower net periodic benefit income and higher amortization. Adjusted diluted EPS of $3.78 increased by 3.3%, due to higher adjusted net earnings and fewer shares outstanding.

Three Months Ended September 30, 2023 Compared with Three Months Ended September 30, 2022

Net revenues, which include excise taxes billed to customers, decreased $269 million (4.1%), due primarily to lower net revenues in the smokeable products segment.

Cost of sales decreased $137 million (8.0%), due primarily to lower shipment volume in our smokeable products segment.

Excise taxes on products decreased $134 million (11.8%), due to lower shipment volume in our smokeable products segment.

Marketing, administration and research costs increased $25 million (4.3%), due primarily to higher amortization from the NJOY Transaction.

Operating income decreased $23 million (0.7%), due primarily to lower operating results in our smokeable products segment, partially offset by higher operating results in our oral tobacco products segment.

(Income) losses from investments in equity securities, which were favorable $2,536 million (100%+), were positively impacted by favorable special items from our investment in ABI (due primarily to our non-cash impairment of our investment in ABI in 2022) and 2022 charges related to our former investment in JUUL equity securities.

Provision for income taxes increased $599 million (100%+), due primarily to lower pre-tax earnings in 2022 associated with our non-cash impairment of our investment in ABI and the release of a valuation allowance related to our prior Cronos warrant.

47

Reported net earnings of $2,166 million increased $1,942 million (100%+), due primarily to favorable special items from our investments in equity securities, partially offset by unfavorable income tax items. Reported basic and diluted EPS of $1.22, each increased by (100%+) due to higher reported net earnings and fewer shares outstanding.

Adjusted net earnings of $2,275 million decreased $25 million (1.1%), due primarily to lower OCI. Adjusted diluted EPS of $1.28 was unchanged, due to lower adjusted net earnings offset by fewer shares outstanding.

Operating Results by Business Segment

Tobacco Space

Business Environment

Summary

The U.S. tobacco industry faces a number of business and legal challenges that have materially adversely affected and may continue to materially adversely affect our business, results of operations, cash flows or financial position or our ability to achieve our Vision. These challenges, some of which are discussed in more detail in Note 13 and in Part I, Item 1A. Risk Factors of our 2022 Form 10-K and in Part II, Item 1A. Risk Factors of our Quarterly Report on Form 10-Q for the quarters ended March 31, 2023 (“First Quarter Form 10-Q”) and June 30, 2023 (“Second Quarter Form 10-Q”), include:

▪pending and threatened litigation and bonding requirements;

▪restrictions and requirements imposed by the Family Smoking Prevention and Tobacco Control Act (“FSPTCA”), and restrictions and requirements (and related enforcement actions) that have been, and in the future will be, imposed by the FDA;

▪the FDA’s failure to effectively address illegal e-vapor products on the market;

▪actual and proposed excise tax increases, as well as changes in tax structures and tax stamping requirements;

▪bans and restrictions on tobacco use imposed by governmental entities and private establishments and employers;

▪other federal, state and local government actions, including:

▪restrictions on the sale of certain tobacco products, the sale of tobacco products by certain retail establishments, the sale of tobacco products with characterizing flavors and the sale of tobacco products in certain package sizes;

▪additional restrictions on the advertising and promotion of tobacco products;

▪other actual and proposed tobacco-related legislation and regulation; and

▪governmental investigations;

▪reductions in consumption levels of cigarettes and MST products;

▪increased efforts by tobacco control advocates and other private sector entities (including retail establishments) to further restrict the availability and use of tobacco products or the ability to communicate with consumers through third-party digital platforms;

▪changes in adult tobacco consumer purchase behavior, which is influenced by various factors such as macroeconomic conditions (including inflation), excise taxes and price gap relationships, each of which may result in adult tobacco consumers switching to lower-priced tobacco products and lower shipment volumes;

▪the highly competitive nature of all tobacco categories, including competitive disadvantages related to cigarette price increases attributable to the settlement of certain litigation and the proliferation of innovative tobacco products, such as e-vapor and oral nicotine pouch products;

▪illicit trade in tobacco products, including illegal e-vapor products; and

▪potential adverse changes in prices, availability and quality of tobacco, other raw materials and component parts, including as a result of changes in macroeconomic and geopolitical conditions.

In addition to and in connection with the foregoing, evolving adult tobacco consumer preferences continue to impact the tobacco industry, including negatively impacting cigarette and MST shipment volumes. We believe that a significant number of adult tobacco consumers switch among tobacco categories, use multiple forms of tobacco products and try innovative tobacco products, such as e-vapor products and oral nicotine pouches. Adult smokers continue to transition from cigarettes to exclusive use of smoke-free tobacco product alternatives, which aligns with our Vision.

We work to meet these evolving adult tobacco consumer preferences over time by developing, manufacturing, marketing and distributing products both within and outside the United States through innovation and other growth strategies (including, where appropriate, arrangements with, or investments in, third parties and acquisitions).

For the third quarter of 2023, we estimate that, when adjusted for trade inventory movements, calendar differences and other factors, domestic cigarette industry volume declined by 8% versus the third quarter of 2022. While macroeconomic conditions

48

continued to impact cigarette industry volume through the third quarter of 2023, we believe that there is more cross-category movement than previously estimated. We estimate that the growth of illegal flavored disposable e-vapor products, which we discuss in more detail below, contributed to cigarette industry volume declines in a range of 1.5% to 2.5% over the last 12 months. By design, these illegal flavored disposable e-vapor products are largely distributed through non-traditional, untracked retail channels, and this is a trend we will continue to carefully monitor.

The discount share of the cigarette category was 28.2% in the third quarter of 2023, unchanged sequentially versus the second quarter of 2023. Compared to the third quarter of 2022, total discount share increased by 1.1 share points in the third quarter of 2023. Marlboro share was 42.3% in the third quarter of 2023, reflecting an increase of 0.3 share points as compared to the second quarter of 2023 and down 0.3 share points when compared to the third quarter of 2022.

We expect cigarette industry volume trends for the remainder of 2023 to be most influenced by (i) disposable income, purchasing patterns and adoption of smoke-free products, (ii) macroeconomic conditions (including inflation, gasoline prices and unemployment levels), (iii) cross-category movement, including to illegal e-vapor products, and (iv) regulatory and legislative (including excise tax) developments.

The U.S. nicotine pouch category continued to grow significantly throughout the third quarter of 2023 to 32.3% of the U.S. oral tobacco category, an increase of 9.8 share points versus the third quarter of 2022. on! maintained year over year share momentum during the third quarter of 2023 to achieve 6.9% of the total oral tobacco category, an increase of 1.7 share points when compared to the third quarter of 2022. Oral nicotine pouch growth has primarily sourced from adult smokeless tobacco and cigarette consumers. For the third quarter 2023, the traditional smokeless category (including MST and Snus) share of the total oral tobacco category declined to 67.7%, down 9.8 share points versus the third quarter of 2022. Copenhagen achieved an oral tobacco category share of 23.1% for the third quarter of 2023, a decrease of 3.7 share points when compared to the third quarter of 2022.

For the third quarter of 2023, reported shipment volume of NJOY ACE was approximately 7.5 million pods. NJOY ACE distribution grew to approximately 42,000 stores, and NJOY ACE is now distributed in the top 25 convenience store chains by e-vapor volume.

Discretionary income pressures persisted as the cumulative effect of inflation impacted adult tobacco consumers throughout the third quarter of 2023. For the 12 months ended September 30, 2023, the Consumer Price Index (“CPI”) increased 3.7%. For the month of September 2023, gas prices were $3.84 per gallon, an increase of $0.50 versus January 2023 and an increase of $0.14 versus September 2022. In addition, low unemployment and stable wage inflation continued for the nine months ending September 30, 2023.

We continue to monitor changing conditions within the tobacco business environment and impacts on our business. For example, we monitor changes in macroeconomic conditions that increase discretionary income pressures on adult tobacco consumers, which impact domestic cigarette industry volume decline and discount share growth and reduce purchases at retail. We are also monitoring growth of illegal flavored disposable e-vapor products and the related impact on domestic cigarette industry volume decline. In addition, the growth of the nicotine pouch category has reduced the size of the MST category and could impact the carrying value of our assets such as our tobacco product trademarks. Changes in these and other conditions could have a material adverse effect on our business, results of operations, cash flows or financial position.

FSPTCA and FDA Regulation

▪The Regulatory Framework: The FSPTCA and its related regulations establish broad FDA regulatory authority over all tobacco products and, among other provisions:

▪impose restrictions on the advertising, promotion, sale and distribution of tobacco products (see Final Tobacco Marketing Rule below);

▪establish pre-market review pathways for new and modified tobacco products (see Pre-Market Review Pathways for Tobacco Products and Market Authorization Enforcement below);

▪prohibit any express or implied claims that a tobacco product is or may be less harmful than other tobacco products without FDA authorization;

▪authorize the FDA to impose tobacco product standards that are appropriate for the protection of the public health (see Potential Product Standards below); and

▪equip the FDA with a variety of investigatory and enforcement tools, including the authority to inspect product manufacturing and other facilities (see Investigation and Enforcement below).

The FSPTCA also bans descriptors such as “light,” “low” or “mild” when used as descriptors of modified risk, unless expressly authorized by the FDA. In connection with a 2016 lawsuit initiated by Middleton, the U.S. Department of Justice, on behalf of the FDA, informed Middleton that the FDA does not intend to bring an enforcement action against Middleton for the use of the

49

term “mild” in the trademark “Black & Mild.” Consequently, Middleton dismissed its lawsuit without prejudice. If the FDA were to change its position at some later date, Middleton would have the opportunity to bring another lawsuit.

In March 2022, the U.S. Congress expanded the statutory definition of tobacco products to include products containing nicotine derived from any source, including synthetic nicotine. The amendment became effective in April 2022. See Pre-Market Review Pathways for Tobacco Products and Market Authorization Enforcement below for additional information on the effects of the statutory change.

▪Final Tobacco Marketing Rule: As required by the FSPTCA, in March 2010, the FDA promulgated a wide range of advertising and promotion restrictions for cigarettes and smokeless tobacco(1) products (the “Final Tobacco Marketing Rule”). The May 2016 deeming regulations amended the Final Tobacco Marketing Rule to expand specific provisions to all tobacco products, including cigars, pipe tobacco and e-vapor and oral nicotine products containing tobacco-derived nicotine or other tobacco derivatives.

The Final Tobacco Marketing Rule, as amended, among other things:

▪restricts the use of non-tobacco trade and brand names on cigarettes and smokeless tobacco products;

▪prohibits sampling of all tobacco products except that sampling of smokeless tobacco products is permitted in qualified adult-only facilities;

▪prohibits the sale or distribution of items such as hats and tee shirts with cigarette or smokeless tobacco brands or logos;

▪prohibits cigarettes and smokeless tobacco brand name sponsorship of any athletic, musical, artistic or other social or cultural event, or any entry or team in any event; and

▪requires the development by the FDA of graphic warnings for cigarettes, establishes warning requirements for other tobacco products, and gives the FDA the authority to require new warnings for any type of tobacco product (see FDA Regulatory Actions - Graphic Warnings below).

Subject to certain limitations arising from legal challenges, the Final Tobacco Marketing Rule took effect in June 2010 for cigarettes and smokeless tobacco products, in August 2016 for all other tobacco products, including e-vapor and oral nicotine pouch products containing tobacco-derived nicotine, and in April 2022 for tobacco products, including e-vapor and oral nicotine pouch products, that contain nicotine from any source other than tobacco, such as synthetic nicotine.

▪Rulemaking and Guidance: From time to time, the FDA issues proposed regulations and guidance, which may be issued in draft or final form, generally involve public comment and may include scientific review. The FDA also may request comments on broad topics through an Advanced Notice of Proposed Rulemaking (“ANPRM”). We actively engage with the FDA to develop and implement the FSPTCA’s regulatory framework, including submission of comments to various FDA policies and proposals and participation in public hearings and engagement sessions.

The FDA’s implementation of the FSPTCA and related regulations and guidance also may have an impact on enforcement efforts by states, territories and localities of their laws and regulations as well as of the State Settlement Agreements (see State Settlement Agreements below).  Such enforcement efforts may adversely affect our operating companies’ ability to market and sell regulated tobacco products in those states, territories and localities.

▪FDA’s Comprehensive Plan for Tobacco and Nicotine Regulation: In July 2017, the FDA announced a “Comprehensive Plan for Tobacco and Nicotine Regulation” (“Comprehensive Plan”) designed to strike a balance between regulation and encouraging the development of innovative tobacco products that may be less risky than cigarettes. Since then, the FDA has issued additional information about its Comprehensive Plan in response to concerns associated with the rise in the use of e-vapor products by youth and the potential youth appeal of flavored tobacco products (see FDA Regulatory Actions - Underage Access and Use of Certain Tobacco Products below). As part of the Comprehensive Plan, the FDA:

▪issued ANPRMs relating to potential product standards for nicotine in cigarettes, flavors in all tobacco products (including menthol in cigarettes and characterizing flavors in all cigars) and, for e-vapor products, to protect against known public health risks such as concerns about youth exposure to liquid nicotine;

▪took actions to restrict youth access to e-vapor products; and

▪reconsidered the processes used by the FDA to review certain reports and new product applications.

In December 2022, the Reagan-Udall Foundation published a report on its operational evaluation of the FDA’s Center for Tobacco Products. Among other recommendations, the report urges the FDA to clearly define product pathways, accelerate pre-market tobacco application (“PMTA”) decision-making, address the need for health risk communications to tobacco consumers and take enforcement actions against manufacturers and products that violate the law. To date, the FDA’s lack of

(1) “Smokeless tobacco,” as used in this section of this Form 10-Q, refers to smokeless tobacco products first regulated by the FDA in 2009, including MST. It excludes oral nicotine pouches, which were first regulated by the FDA in 2016.

50

enforcement actions against certain product categories that violate the law, including disposable and flavored e-vapor products and products targeted to minors, have allowed such products to proliferate on the market. In February 2023, the FDA committed to developing a five-year strategic plan by December 2023 to address concerns raised by the report and confirmed this intended timing in June 2023.

▪Pre-Market Review Pathways for Tobacco Products and Market Authorization Enforcement: The FSPTCA permits the sale of tobacco products on the market as of February 15, 2007 and not subsequently modified (“Pre-existing Tobacco Products”) and new or modified products authorized through the PMTA, Substantial Equivalence (“SE”) or SE Exemption pathways. Subsequent FDA rules also provide a Supplemental PMTA pathway designed to increase the efficiency of submission and review for modified versions of previously authorized products.

The FDA pre-market authorization enforcement policy varies based on product type and date of availability on the market, specifically:

▪Pre-existing Tobacco Products are exempt from the pre-market authorization requirement;

▪cigarette and smokeless tobacco products that were modified or first introduced into the market between February 15, 2007 and March 22, 2011 are generally considered “Provisional Products” for which SE reports were required to be filed by March 22, 2011. These reports must demonstrate that the product has the same characteristics as a product on the market as of February 15, 2007 or to a product previously determined to be substantially equivalent, or has different characteristics but does not raise different questions of public health;

▪tobacco products that were first regulated by the FDA in 2016, including cigars, e-vapor products and oral nicotine pouches that are not Pre-existing Tobacco Products, are generally products for which either an SE report or PMTA needed to be filed by September 9, 2020; and

▪tobacco products containing nicotine from any source other than tobacco (e.g., synthetic nicotine) that were on the market between March 15, 2022 and April 14, 2022 and are not Pre-existing Tobacco Products are generally products for which a manufacturer must have filed a PMTA by May 14, 2022. A manufacturer was permitted to keep such a product on the market until July 13, 2022 provided that a PMTA was filed by May 14, 2022. Thereafter, unless the FDA granted the product a marketing order, the product is unlawful and subject to possible FDA enforcement.

Modifications to currently marketed products, including modifications that result from, for example, changes to the quantity of tobacco product(s) in a package, a manufacturer being unable to acquire ingredients or a supplier or contract manufacturer being unable to maintain the consistency required in ingredients or manufacturing processes, could trigger the FDA’s pre-market review processes. Additionally, a manufacturer may be unable to maintain consistency in manufacturing processes as it increases the scale of its manufacturing operations in response to market expansion or product introduction. These circumstances could cause a manufacturer to receive (i) a “not substantially equivalent” determination or (ii) a denial or withdrawal of a PMTA, either of which could result in a product being removed from the market. In addition, new scientific data continues to be developed relating to innovative tobacco products, which could impact the FDA’s determination as to whether a product is, or continues to be, appropriate for the protection of public health and could, therefore, result in the removal of one or more products from the market. Any such actions affecting our operating companies’ products could have a material adverse impact on our business, results of operations, cash flows or financial position.

Products Regulated in 2009: Most cigarette and smokeless tobacco products currently marketed by PM USA and USSTC are “Provisional Products.” PM USA and USSTC timely submitted SE reports for these Provisional Products and have received SE determinations on certain Provisional Products. Those products that were found by the FDA to be not substantially equivalent (certain smokeless tobacco products) had been discontinued for business reasons prior to the FDA’s determinations; therefore, those determinations did not impact business results. PM USA and USSTC have other Provisional Products that continue to be subject to the FDA’s pre-market review process. In the meantime, they can continue marketing these products unless the FDA determines that a specific Provisional Product is not substantially equivalent.

In addition, the FDA has communicated that it will not review a certain subset of Provisional Product SE reports and that the products that are the subject of those reports can continue to be legally marketed without further FDA review. PM USA and USSTC have Provisional Products included in this subset of products.

While we believe PM USA’s and USSTC’s current Provisional Products meet the statutory requirements of the FSPTCA, we cannot predict how the FDA will ultimately apply law, regulation and guidance to their various SE reports. Should PM USA or USSTC receive unfavorable determinations on any SE reports currently pending with the FDA, we believe PM USA and USSTC can replace the vast majority of these product volumes with other FDA authorized products or with Pre-existing Tobacco Products.

Cigarette and smokeless tobacco products introduced into the market or modified after March 22, 2011 are “Non-Provisional Products” and must receive a marketing order from the FDA prior to being offered for sale. Marketing orders for Non-

51

Provisional Products may be obtained by filing an SE report, PMTA or using another pre-market pathway established by the FDA. PM USA and USSTC may not be able to obtain a marketing order for non-provisional products because the FDA may determine that any such product does not meet the statutory requirements for approval.

Products Regulated in 2016: Manufacturers of products first regulated by the FDA in 2016, including cigars, oral nicotine pouches and e-vapor products, that were on the market as of August 8, 2016 and not subsequently modified must have filed an SE report or PMTA by the filing deadline of September 9, 2020 in order for their products to remain on the market. These products can remain on the market during FDA review through court-allowed, case-by-case discretion, so long as the report or application was timely filed with the FDA. In September 2022, the FDA represented that it had resolved more than 99% of the timely applications it had received, the vast majority of which were for e-vapor products and resulted in denials. A number of the denials are subject to challenges initiated by the affected manufacturers. For those products still under FDA review, it is uncertain when and for how long the FDA may permit continued marketing and sale of those products pursuant to its case-by-case discretion. For products (new or modified) not on the market as of August 8, 2016, manufacturers must file an SE report or PMTA and receive FDA authorization prior to marketing and selling the product.

Helix submitted PMTAs for on! oral nicotine pouches in May 2020. As of October 23, 2023, the FDA has not issued marketing order decisions for any on! products. In addition, as of October 23, 2023, Middleton has received market orders or exemptions that cover over 99% of its cigar product volume.

In April 2019, the FDA authorized the PMTA for the IQOS System, and in July 2020, the FDA authorized the marketing of this system as an MRTP with a reduced exposure claim. In December 2020, the FDA authorized the PMTA for IQOS 3, an updated version of the IQOS devices, and in March 2022 authorized the marketing of the IQOS 3 device as an MRTP with the same reduced exposure claim. In January 2023, the FDA authorized PMTAs for three new tobacco-flavored varieties of Marlboro HeatSticks.

In September 2021, in connection with a patent dispute, the U.S. International Trade Commission (“ITC”) issued a cease and desist order, effective as of November 29, 2021, banning (i) the importation of the IQOS devices, Marlboro HeatSticks and infringing components into the United States and (ii) the sale, marketing and distribution of such imported products in the United States. As a result, PM USA removed the products from the marketplace. For a further discussion of the ITC decision, see Note 13. In October 2022, we agreed to assign the exclusive U.S. commercialization rights to the IQOS System to Philip Morris International Inc. (“PMI”) effective April 2024 in exchange for a total cash payment of approximately $2.7 billion (plus interest).

In October 2021, the FDA authorized the marketing and sale of four of USSTC’s Verve oral nicotine products, including Green Mint and Blue Mint varieties, representing the first flavored product authorizations issued by the FDA for newly deemed innovative products. These products are not currently marketed or sold.

In March 2023, the FDA authorized USSTC to communicate a modified risk claim about its Copenhagen Classic Snuff MST product. This product is not currently marketed or sold. The authorized claim for Copenhagen Classic Snuff is “IF YOU SMOKE, CONSIDER THIS: Switching completely to this product from cigarettes reduces risk of lung cancer.” USSTC’s authorization to use this claim is subject to the FDA’s post-market surveillance requirements described below.

In June 2023, we completed our acquisition of NJOY Holdings, the parent of NJOY. As a result of the acquisition, NJOY became a wholly owned subsidiary of Altria, and we gained full global ownership of NJOY’s e-vapor product portfolio, including NJOY ACE, currently the only pod-based e-vapor product with market authorizations from the FDA. In March 2020, NJOY submitted PMTAs to the FDA with respect to two NJOY ACE Menthol products, both of which remain pending.

Post-Market Surveillance: Manufacturers that receive product authorizations through the PMTA process must adhere to the FDA post-market record keeping and reporting requirements, as detailed in market orders and in the final PMTA rule that went into effect in November 2021. The requirements include prior notification of marketing activities. The FDA may amend requirements of a market order or withdraw the market order based on this information if, among other reasons, it determines that the continued marketing of the products is no longer appropriate for the protection of the public health.

Effect of Adverse FDA Determinations: FDA review time frames have varied. It is therefore difficult to predict the duration of FDA reviews of SE reports or PMTAs. An unfavorable determination on an application, the withdrawal by the FDA of a prior marketing order or other changes in FDA regulatory requirements could result in the removal of products from the market. A “not substantially equivalent” determination, a denial of a PMTA or a marketing order withdrawal by the FDA on one or more products (which would require the removal of the product or products from the market) could have a material adverse impact on our business, results of operations, cash flows or financial position. Also, adverse FDA determinations on innovative tobacco products could have a material adverse effect on our ability to achieve our Vision.

▪FDA Regulatory Actions

▪Graphic Warnings: In March 2020, the FDA issued a final rule requiring 11 textual warnings accompanied by color graphics depicting certain negative health consequences of smoking on cigarette packaging and advertising. PM USA

52

and other cigarette manufacturers filed lawsuits challenging the final rule on substantive and procedural grounds. In December 2022, the U.S. District Court for the Eastern District of Texas found in favor of cigarette manufacturers in one such suit and blocked the rule, finding it unconstitutional on the basis that it compelled speech in violation of the First Amendment. The FDA has appealed the decision.

▪Underage Access and Use of Certain Tobacco Products: The FDA announced regulatory actions in September 2018 to address underage access and use of e-vapor products. We have engaged with the FDA on this topic and have reaffirmed to the FDA our ongoing and long-standing commitment to preventing underage use. For example, we advocated raising the minimum legal age to purchase all tobacco products to 21 at the federal and state levels to further address underage use, which is now federal law. See Federal, State and Local Legislation to Increase the Legal Age to Purchase Tobacco Products below for further discussion.

Additionally, the FDA issued final guidance in April 2020, stating that it intended to prioritize enforcement action against certain product categories, including pod-based, flavored e-vapor products and products targeted to minors. More recently, the FDA has taken limited enforcement action aimed at manufacturers and retailers of certain disposable flavored electronic nicotine delivery system products. However, the FDA’s lack of enforcement actions against product categories that violate the law, including disposable and flavored e-vapor products and products targeted to minors, have allowed such products to proliferate on the market.

▪Electronic Nicotine Delivery System Products: As of October 23, 2023, many manufacturers of menthol and other flavored e-vapor products have received marketing denial orders (“MDOs”) for failure to provide sufficiently strong product-specific scientific evidence to demonstrate that the benefit of their products to adult smokers overcomes the risk that their products pose to youth. The FDA has communicated in these MDOs that vapor products with non-tobacco flavors present unique questions relevant to the FDA’s “Appropriate for the Protection of Public Health” standard and that successful applications require strong, product-specific evidence. A number of these manufacturers are challenging the MDOs for their products.

▪Potential Product Standards

▪Nicotine in Cigarettes and Other Combustible Tobacco Products: In March 2018, the FDA issued an ANPRM seeking comments on the potential public health benefits and any possible adverse effects of lowering nicotine in combustible cigarettes to non-addictive or minimally addictive levels. Among other issues, the FDA sought comments on (i) whether smokers would compensate by smoking more cigarettes to obtain the same level of nicotine as with their current product and (ii) whether the proposed rule would create an illicit trade of cigarettes containing nicotine at levels higher than a non-addictive threshold that may be established by the FDA. The FDA also sought comments on whether a nicotine product standard should apply to other combustible tobacco products, including cigars. In June 2023, the Biden Administration published its Spring 2023 Unified Regulatory Agenda, which includes the FDA’s plans to propose, by December 2023, a product standard that would establish a maximum nicotine level in cigarettes and other combustible tobacco products. Any proposed product standard would proceed through the rulemaking process, which we believe will take multiple years to complete.

▪Flavors in Tobacco Products: In April 2022, the FDA issued two proposed product standards: (i) banning menthol in cigarettes and (ii) banning all characterizing flavors (including menthol) in cigars. The Biden Administration’s Spring 2023 Unified Regulatory Agenda includes the FDA’s plans to complete rulemaking with respect to these proposed product standards by August 2023. The FDA has not completed rulemaking with respect to either proposed product standard, but in October 2023 submitted the two proposed product standards to the White House Office of Management and Budget for review. We submitted comments during the notice-and-comment period and plan to continue engaging with the FDA through the rulemaking process. The FDA could propose an additional product standard for flavors in innovative tobacco products, including e-vapor products and oral nicotine products.

▪N-nitrosonornicotine (“NNN”) in Smokeless Tobacco: In January 2017, the FDA proposed a product standard for NNN levels in finished smokeless tobacco products.

If any one or more of the foregoing potential product standards were to become final and was appealed and upheld in the courts, it could have a material adverse effect on our business, results of operations, cash flows or financial position, including a material adverse effect on the carrying value of certain of our assets such as our cigar trademarks.

▪Good Manufacturing Practices: In March 2023, the FDA, pursuant to the requirements of the FSPTCA, issued a proposed rule setting forth requirements for tobacco product manufacturers regarding the manufacture, design, packing and storage of their products. This proposed rule establishes a framework of good manufacturing practices, including by:

▪establishing tobacco product design and development controls;

▪ensuring that finished and bulk tobacco products are manufactured according to established specifications;

53

▪minimizing the manufacture and distribution of tobacco products that do not meet specifications;

▪requiring manufacturers to take appropriate measures to prevent contamination of tobacco products;

▪requiring investigation and identification of products that do not meet specifications and requiring manufacturers to institute appropriate corrective actions, such as a recall; and

▪establishing the ability to trace all components or parts, ingredients, additives and materials, as well as each batch of finished or bulk tobacco products, to aid in investigations of those that do not meet specifications.

We engaged with the FDA through the rulemaking process, including during the notice-and-comment period, which closed in October 2023. If the proposed rule were to take effect, compliance with these requirements could result in increased costs.

▪Impact on Our Business; Compliance Costs and User Fees: Additional FDA regulatory actions under the FSPTCA could have a material adverse effect on our business, results of operations, cash flows or financial position in various ways. For example, actions by the FDA could:

▪impact the consumer acceptability of tobacco products;

▪discontinue, delay or prevent the sale or distribution of existing, new or modified tobacco products;

▪limit adult tobacco consumer choices;

▪impose restrictions on communications with adult tobacco consumers;

▪create a competitive advantage or disadvantage for certain tobacco companies;

▪impose additional manufacturing, labeling or packaging requirements;

▪impose additional restrictions at retail;

▪result in increased illicit trade in tobacco products; and

▪otherwise significantly increase the cost of doing business.

The FSPTCA imposes user fees on cigarette, cigarette tobacco, smokeless tobacco, cigar and pipe tobacco manufacturers and importers to pay for the cost of regulation and other matters. The FSPTCA does not impose user fees on e-vapor or oral nicotine pouch manufacturers. The cost of the FDA user fee is allocated first among tobacco product categories subject to FDA user fees and then among manufacturers and importers within each respective category based on their relative market shares, all as prescribed by the FSPTCA and FDA regulations. Payments for user fees are adjusted for several factors, including market share and industry volume. See Liquidity and Capital Resources - Payments Under State Settlement Agreements and FDA Regulation below for a discussion of our FDA user fee payments. In addition, compliance with the FSPTCA’s regulatory requirements has resulted, and will continue to result, in additional costs. The amount of additional compliance and related costs has not been material in any given quarter or year-to-date period but could become material, either individually or in the aggregate. The failure to comply with FDA regulatory requirements, even inadvertently, and FDA enforcement actions also could have a material adverse effect on our business, results of operations, cash flows or financial position.

▪Investigation and Enforcement: The FDA has a number of investigatory and enforcement tools available to it, including document requests and other required information submissions, facility inspections, facility closures, examinations and investigations, injunction proceedings, monetary penalties, product withdrawal and recall orders, and product seizures. Investigations or enforcement actions could result in significant costs or otherwise have a material adverse effect on our business, results of operations, cash flows or financial position.

Excise Taxes

Tobacco products are subject to substantial excise taxes in the United States. Significant increases in tobacco-related taxes or fees have been proposed or enacted (including with respect to e-vapor products) and are likely to continue to be proposed or enacted at the federal, state and local levels within the United States. The frequency and magnitude of excise tax increases can be influenced by various factors, including the composition of executive and legislative bodies.

Federal, state and local cigarette excise taxes have increased substantially over the past two decades, far outpacing the rate of inflation. Between the end of 1998 and October 23, 2023, the weighted-average state cigarette excise tax increased from $0.36 to $1.90 per pack. As of October 23, 2023, one state, New York, has enacted new legislation increasing excise taxes in 2023. The increase in New York became effective in September 2023. Various other increases are under consideration or have been proposed.

A majority of states currently tax MST using an ad valorem method, which is calculated as a percentage of the price of the product, typically the wholesale price. This ad valorem method results in more tax being paid on premium products than is paid on lower-priced products of equal weight. We support legislation to convert ad valorem taxes on MST to a weight-based methodology because, unlike the ad valorem tax, a weight-based tax subjects cans of equal weight to the same tax. As of October 23, 2023, the federal government, 23 states, Puerto Rico, Philadelphia, Pennsylvania and Cook County, Illinois have

54

adopted a weight-based tax methodology for MST. North Carolina has passed legislation that will cause the state to adopt a weight-based tax methodology for MST in July 2025.

An increasing number of states and localities also are imposing excise taxes on e-vapor products and oral nicotine pouches. As of October 23, 2023, 33 states, the District of Columbia, Puerto Rico and a number of cities and counties have enacted legislation to tax e-vapor products. These taxes are calculated in varying ways and may differ based on the e-vapor product form. Similarly, 11 states and the District of Columbia have enacted legislation to tax oral nicotine pouches.

Tax increases are expected to continue to have an adverse impact on sales of our operating companies’ products through lower consumption levels and the potential shift in adult tobacco consumer purchases from premium to non-premium or discount cigarettes, to lower taxed tobacco products or to counterfeit and contraband products. Lower sales volume and reported share performance of our operating companies’ products could have a material adverse effect on our business, results of operations, cash flows or financial position. In addition, substantial excise tax increases on e-vapor and oral nicotine products may negatively impact adult smokers’ transition to these products, which could materially adversely affect our ability to achieve our Vision.

International Treaty on Tobacco Control

The World Health Organization’s Framework Convention on Tobacco Control (the “FCTC”) entered into force in February 2005. As of October 23, 2023, 182 countries, as well as the European Union, have become parties to the FCTC. While the United States is a signatory of the FCTC, it is not currently a party to the agreement, as the agreement has not been submitted to, or ratified by, the U.S. Senate. The FCTC is the first international public health treaty and its objective is to establish a global agenda for tobacco regulation with the purpose of reducing initiation of tobacco use and encouraging cessation. The treaty recommends (and in certain instances, requires) signatory nations to enact legislation that would address various tobacco-related issues.

There are a number of proposals currently under consideration by the governing body of the FCTC, some of which call for substantial restrictions on the manufacture, marketing, distribution and sale of tobacco products. It is not possible to predict the outcome of these proposals or the impact of any FCTC actions on legislation or regulation in the United States, either indirectly or as a result of the United States becoming a party to the FCTC, or whether or how these actions might indirectly influence FDA regulation and enforcement.

State Settlement Agreements

As discussed in Note 13, during 1997 and 1998, PM USA and other major domestic cigarette manufacturers entered into the State Settlement Agreements. These settlements require participating manufacturers to make substantial annual payments, which are adjusted for several factors, including inflation, operating income, market share and industry volume. Increases in inflation can increase our financial liability under the State Settlement Agreements. The State Settlement Agreements’ inflation calculations require us to apply the higher of 3% or the U.S. Bureau of Labor Statistics’ Consumer Price Index for All Urban Consumers (“CPI-U”) percentage rate as published in January of each year. As of December 2022, the inflation calculation was approximately 6.5% based on the latest CPI-U data; however, the increase in the annual payments did not have a material impact on our financial position. We believe that inflation will continue at increased levels in 2023, but do not expect the corresponding increase in annual payments to result in a material financial impact. However, we will continue to monitor the impact of increased inflation on the macroeconomic environment and our businesses.

For a discussion of the impact of the State Settlement Agreements on us, see Liquidity and Capital Resources - Payments Under State Settlement Agreements and FDA Regulation below and Note 13. The State Settlement Agreements also place numerous requirements and restrictions on participating manufacturers’ business operations, including prohibitions and restrictions on the advertising and marketing of cigarettes and smokeless tobacco products. Among these are prohibitions of outdoor and transit brand advertising, payments for product placement and free sampling (except in adult-only facilities). The State Settlement Agreements also place restrictions on the use of brand name sponsorships and brand name non-tobacco products and prohibitions on targeting youth and the use of cartoon characters. In addition, the State Settlement Agreements require companies to affirm corporate principles directed at reducing underage use of cigarettes; impose requirements regarding lobbying activities; limit the industry’s ability to challenge certain tobacco control and underage use laws; and provide for the dissolution of certain tobacco-related organizations and place restrictions on the establishment of any replacement organizations.

In November 1998, USSTC entered into the Smokeless Tobacco Master Settlement Agreement (the “STMSA”) with the attorneys general of various states and United States territories to resolve the remaining health care cost reimbursement cases initiated against USSTC. The STMSA required USSTC to adopt various marketing and advertising restrictions. USSTC is the only smokeless tobacco manufacturer to sign the STMSA.

55

Other International, Federal, State and Local Regulation and Governmental and Private Activity

▪International, Federal, State and Local Regulation: Various states and localities have enacted or proposed legislation that imposes restrictions on tobacco products (including cigarettes, smokeless tobacco, cigars, e-vapor products and oral nicotine pouches), such as legislation that (i) prohibits the sale of all tobacco products or certain tobacco categories, such as e-vapor, (ii) prohibits the sale of tobacco products with characterizing flavors, such as menthol cigarettes and flavored e-vapor products, (iii) requires the disclosure of health information separate from or in addition to federally mandated health warnings and (iv) restricts commercial speech or imposes additional restrictions on the marketing or sale of tobacco products. The legislation varies in terms of the type of tobacco products, the conditions under which such products are or would be restricted or prohibited, and exceptions to the restrictions or prohibitions. For example, a number of proposals involving characterizing flavors would prohibit smokeless tobacco products with characterizing flavors without providing an exception for mint- or wintergreen-flavored products. As of October 23, 2023, multiple states and localities are considering legislation to ban flavors in one or more tobacco products, and seven states (California, Illinois, Massachusetts, New Jersey, New York, Rhode Island and Utah) and the District of Columbia have passed such legislation. Some of these states, such as New York, Utah and Illinois, exempt certain products that have received FDA market authorization through the PMTA pathway. The legislation in California, which became effective in December 2022, bans the sale of most tobacco products with characterizing flavors, including menthol, mint and wintergreen.

Massachusetts passed legislation capping the amount of nicotine in e-vapor products. Similar legislation is pending in one other state.

Similar restrictions to those enacted or proposed in various U.S. states and localities on e-vapor and oral nicotine pouch products have been enacted or proposed internationally.

We have challenged and will continue to challenge certain federal, state and local legislation and other governmental action, including through litigation. It is possible, however, that legislation, regulation or other governmental action could be enacted or implemented that could have a material adverse impact on our business, results of operations, cash flows or financial position. Such action also could negatively impact adult smokers’ transition to smoke-free products, which could materially adversely affect our ability to achieve our Vision.

▪Federal, State and Local Legislation to Increase the Legal Age to Purchase Tobacco Products: After a number of states and localities proposed and enacted legislation to increase the minimum age to purchase all tobacco products, including e-vapor products, in December 2019, the federal government passed legislation increasing the minimum age to purchase all tobacco products, including e-vapor products, to 21 nationwide. As of October 23, 2023, 42 states, the District of Columbia and Puerto Rico have enacted laws increasing the legal age to purchase tobacco products to 21. Although an increase in the minimum age to purchase tobacco products may have a negative impact on our operating companies’ sales volumes, as discussed above under Underage Access and Use of Certain Tobacco Products, we support raising the minimum legal age to purchase all tobacco products to 21 at the federal and state levels, reflecting our longstanding commitment to combat underage tobacco use.

▪Health Effects of Tobacco Products, Including E-vapor Products: Reports with respect to the health effects of smoking have been publicized for many years, including various reports by the U.S. Surgeon General. We believe that the public should be guided by the messages of the U.S. Surgeon General and public health authorities worldwide in making decisions concerning the use of tobacco products, including e-vapor products.

Most jurisdictions within the United States have restricted smoking in public places and some have restricted vaping in public places. Some public health groups have called for, and various jurisdictions have adopted or proposed, bans on smoking and vaping in outdoor places, in private apartments and in cars transporting children. It is not possible to predict the results of ongoing scientific research or the types of future scientific research into the health risks of tobacco exposure and the impact of such research on legislation and regulation.

▪Other Legislation or Governmental Initiatives: In addition to the actions discussed above, other regulatory initiatives affecting the tobacco industry have been adopted or are being considered at the federal level and in a number of state and local jurisdictions. For example, in recent years, legislation has been introduced or enacted at the state or local level to subject tobacco products to various reporting requirements and performance standards; establish educational campaigns relating to tobacco consumption or tobacco control programs or provide additional funding for governmental tobacco control activities; restrict the sale of tobacco products in certain retail establishments and the sale of tobacco products in certain package sizes; prohibit the sale of tobacco products based on environmental concerns; impose responsibility on manufacturers for the disposal, recycling or other treatment of post-consumer goods such as plastic packaging; require tax stamping of smokeless tobacco products; require the use of state tax stamps using data encryption technology; and further restrict the sale, marketing and advertising of cigarettes and other tobacco products. Such legislation may be subject to constitutional or other challenges on various grounds, which may or may not be successful. In addition, if a pandemic or similar health emergency occurs, state and local governments may reimpose additional health and safety requirements for all businesses, which could result in the potential

56

temporary closure of certain businesses and facilities. It is possible that tobacco manufacturing and other facilities and the facilities of our suppliers, our suppliers’ suppliers and our trade partners could be subject to additional government-mandated temporary closures and restrictions.

It is not possible to predict what, if any, additional legislation, regulation or other governmental action will be enacted or implemented (and, if challenged, upheld) relating to the manufacturing, design, packaging, marketing, advertising, sale or use of tobacco products, or the tobacco industry generally. Any such legislation, regulation or other governmental action could have a material adverse impact on our business, results of operations, cash flows or financial position.

▪Governmental Investigations: From time to time, we are subject to governmental investigations on a range of matters. For example, we currently are, or recently have been, subject to a number of governmental investigations with respect to our former investment in JUUL, which we divested in March 2023, including the following: (i) the U.S. Federal Trade Commission (“FTC”) issued a Civil Investigative Demand to us while conducting its antitrust review of our former investment in JUUL seeking information regarding, among other things, our role in the resignation of JUUL’s former chief executive officer and the hiring by JUUL of any current or former Altria director, executive or employee (see Note 13 for a description of the FTC’s administrative complaint against us and JUUL); (ii) the SEC commenced an investigation relating to our acquisition, disclosures and accounting controls in connection with the JUUL investment; and (iii) the New York State Office of the Attorney General and the Commonwealth of Massachusetts Office of the Attorney General, separately, issued independent subpoenas to us seeking documents relating to our former investment in and provision of services to JUUL. For a discussion of our disposition of our interest in JUUL, see Note 5.

Additionally, JUUL is currently, or recently has been, under investigation by various federal and state agencies, including the SEC, the FDA and the FTC, and state attorneys general. Such investigations vary in scope but at least some include JUUL’s marketing practices, particularly as such practices relate to youth, and we may be asked in the context of those investigations to provide information concerning our former investment in JUUL or relating to our marketing of Nu Mark LLC e-vapor products.

We are a party to lawsuits initiated by the attorneys general of Alaska, Hawaii and New Mexico relating to our former investment in JUUL. In April 2023, we agreed to settle a lawsuit initiated by the attorney general of Minnesota.

Private Sector Activity on Tobacco Products

A number of retailers, including national chains, have discontinued the sale of all tobacco products, and others have discontinued the sale of e-vapor products. Reasons for the discontinuation include change in corporate policy and, with respect to e-vapor products, reported illnesses and the uncertain regulatory environment. Furthermore, third-party digital platforms, such as app stores, have restricted, and in some cases prohibited, communications with adult tobacco consumers concerning tobacco products. It is possible that if this private sector activity becomes more widespread it could have an adverse effect on our business, results of operations, cash flows or financial position.

Illicit Trade in Tobacco Products

Illicit trade in tobacco products can have an adverse impact on our business. Illicit trade can take many forms, including the sale of counterfeit tobacco products; the sale of tobacco products in the United States that are intended for sale outside the country; the sale of untaxed tobacco products over the Internet and by other means designed to avoid the collection of applicable taxes; the sale of unregulated products; and diversion into one taxing jurisdiction of tobacco products intended for sale in another. Counterfeit tobacco products, for example, are manufactured by unknown third parties in unregulated environments. Counterfeit versions of our products can negatively affect adult tobacco consumer experiences with and opinions of those brands. Illegal disposable e-vapor products may be designed to appeal to youth and are manufactured without scientific standards, exposing consumers to undocumented risks. Illicit trade in tobacco products also harms law-abiding wholesalers and retailers by depriving them of lawful sales and undermines the significant investment we have made in legitimate distribution channels. Moreover, illicit trade in tobacco products results in federal, state and local governments losing tax revenues. Losses in tax revenues can cause such governments to take various actions, including increasing excise taxes, imposing legislative or regulatory requirements, or asserting claims against manufacturers of tobacco products or members of the trade channels through which such tobacco products are distributed and sold, each of which may have an adverse effect on our business, results of operations, cash flows or financial position.

We communicate with wholesale and retail trade members regarding illicit trade in tobacco products and how we can help prevent such activities, enforce wholesale and retail trade programs and policies that address illicit trade in tobacco products and, when necessary, litigate to protect our trademarks. We also engage with the FDA and other government agencies to advocate for a well-regulated U.S. tobacco industry that embraces harm reduction and the enforcement of existing regulatory frameworks. When appropriate, we also take legal action to protect our lawful e-vapor product business, such as the lawsuit we filed in federal court in California against manufacturers of illegal e-vapor products in October 2023.

57

Price, Availability and Quality of Tobacco, Other Raw Materials, Ingredients and Component Parts

Shifts in crops (such as those driven by economic conditions and adverse weather patterns), government restrictions and mandated prices, production control programs, economic trade sanctions, import duties and tariffs, international trade disruptions, inflation, geopolitical instability, climate and environmental changes and disruptions due to man-made or natural disasters may increase the cost or reduce the supply or quality of tobacco, other raw materials, ingredients or component parts used to manufacture our operating companies’ products. Any significant change in such factors could negatively impact our ability to continue manufacturing and marketing existing products, increase our costs or negatively impact adult consumer product acceptability and have a material adverse effect on our business and profitability.

As with other agricultural commodities, tobacco price, quality and availability can be influenced by variations in weather patterns, including those caused by climate change, and macroeconomic conditions and imbalances in supply and demand, among other factors. For varieties of tobacco only available in limited geographies, government-mandated prices and production control programs, political instability or government prohibitions on the import or export of tobacco in certain countries pose additional risks to price, availability and quality. In addition, as consumer demand increases for smoke-free products and decreases for combustible products, the volume of tobacco leaf required for production may decrease, resulting in reduced demand. The reduced demand for tobacco leaf may result in the reduced supply and availability of domestic tobacco, as growers divert resources to other crops or cease farming, and increased costs. The unavailability or unacceptability of any one or more particular varieties of tobacco leaf necessary to manufacture our operating companies’ products could negatively impact our ability to continue marketing existing products or impact adult tobacco consumer product acceptability, which could have a material adverse effect on our business and profitability.

Current macroeconomic conditions and geopolitical instability (including the cumulative effects of high inflation over the past several quarters, high gas prices, rising interest rates, labor shortages, supply and demand imbalances and the Russian invasion of Ukraine) have caused and continue to cause worldwide disruptions and delays to supply chains and commercial markets, which limit access to, and increase the cost of, raw materials, ingredients and component parts (for example, tobacco leaf and resins and aluminum used in our packaging). We have implemented and continue to implement various strategies to help secure sufficient supplies of raw materials, ingredients and component parts for production.

In addition, government taxes, restrictions and prohibitions on the sale and use of certain products may limit access to, and increase the costs of, raw materials and component parts and, potentially, impede our ability to sell certain of our operating companies’ products. For example, additional taxes on the use of certain single-use plastics have been proposed by the U.S. Congress, which, if passed, could increase the costs of, and impair our ability to, source certain materials used in the packaging for our operating companies’ products.

We work to mitigate these risks by maintaining inventory levels of certain tobacco varieties that cover several years, purchasing raw materials, ingredients and component parts from disperse geographic regions throughout the world and entering into long-term contracts with some of our tobacco growers and direct material suppliers. To date, the impact on us of changes in the price, availability and quality of tobacco, other raw materials, ingredients and component parts has not been material. However, the effects of the current macroeconomic and geopolitical conditions on prices, availability and quality of such items may continue, which could have a material adverse effect on our business, results of operations, cash flows or financial position.

Timing of Sales

In the ordinary course of business, we are subject to many influences that can impact the timing of sales to customers, including the timing of holidays and other annual or special events, the timing of promotions, customer incentive programs and customer inventory programs, as well as the actual or speculated timing of pricing actions and tax-driven price increases.

58

Operating Results

The following table provides reconciliations of reported OCI to adjusted OCI for our reportable segments, all other category and total OCI and provides the related OCI margins:

For the Nine Months Ended September 30, 2023
(in millions)	Smokeable Products			Oral Tobacco Products			All Other			Total
Net revenues	$	16,482		$	1,993		$	33		$	18,508
Excise taxes	(2,945)			(85)			—			(3,030)
Revenues net of excise taxes	$	13,537		$	1,908		$	33		$	15,478
Reported OCI	$	8,092		$	1,314		$	(17)		$	9,389
NPM Adjustment Items	(15)			—			—			(15)
Tobacco and health and certain other litigation items	65			—			—			65
Adjusted OCI	$	8,142		$	1,314		$	(17)		$	9,439
Reported OCI margin (1)	59.8		%	68.9		%	(51.5)		%	60.7		%
Adjusted OCI margin (1)	60.1		%	68.9		%	(51.5)		%	61.0		%

(1) Reported and adjusted OCI margins are calculated as reported and adjusted OCI, respectively, divided by revenues net of excise taxes.

Smokeable Products Segment

Financial Results

The following table summarizes operating results, includes reported and adjusted OCI margins and provides a reconciliation of reported OCI to adjusted OCI for our smokeable products segment:

	Operating Results
	For the Nine Months Ended September 30,								For the Three Months Ended September 30,
(in millions)	2023			2022			Change		2023			2022			Change
Net revenues	$	16,482		$	17,020		(3.2)	%	$	5,572		$	5,882		(5.3)	%
Excise taxes	(2,945)			(3,289)					(976)			(1,108)
Revenues net of excise taxes	$	13,537		$	13,731				$	4,596		$	4,774
Reported OCI	$	8,092		$	8,112		(0.2)	%	$	2,743		$	2,791		(1.7)	%
NPM Adjustment Items	(15)			(60)					(15)			—
Tobacco and health and certain other litigation items	65			71					13			21
Adjusted OCI	$	8,142		$	8,123		0.2	%	$	2,741		$	2,812		(2.5)	%
Reported OCI margins (1)	59.8		%	59.1		%	0.7 pp		59.7		%	58.5		%	1.2 pp
Adjusted OCI margins (1)	60.1		%	59.2		%	0.9 pp		59.6		%	58.9		%	0.7 pp

(1) Reported and adjusted OCI margins are calculated as reported and adjusted OCI, respectively, divided by revenues net of excise taxes.

Nine Months Ended September 30, 2023 Compared with Nine Months Ended September 30, 2022

Net revenues, which include excise taxes billed to customers, decreased $538 million (3.2%), due primarily to lower shipment volume ($1,921 million), partially offset by higher pricing ($1,380 million), which includes higher promotional investments.

Reported OCI decreased $20 million (0.2%), due primarily to lower shipment volume ($1,186 million), higher per unit settlement charges, higher costs ($62 million) and lower NPM Adjustment Items ($45 million), partially offset by higher pricing, which includes higher promotional investments.

Adjusted OCI increased $19 million (0.2%), due primarily to higher pricing, which includes higher promotional investments, partially offset by lower shipment volume, higher per unit settlement charges and higher costs.

59

Three Months Ended September 30, 2023 Compared with Three Months Ended September 30, 2022

Net revenues, which include excise taxes billed to customers, decreased $310 million (5.3%), due primarily to lower shipment volume ($725 million), partially offset by higher pricing ($420 million), which includes higher promotional investments.

Reported OCI decreased $48 million (1.7%), due primarily to lower shipment volume ($445 million) and higher costs ($39 million), partially offset by higher pricing, which includes higher promotional investments, and NPM Adjustment Items in 2023 ($15 million).

Adjusted OCI decreased $71 million (2.5%), due primarily to lower shipment volume and higher costs, partially offset by higher pricing, which includes higher promotional investments.

Shipment Volume and Retail Share Results

The following table summarizes our smokeable products segment’s shipment volume performance:

	Shipment Volume
	For the Nine Months Ended September 30,				For the Three Months Ended September 30,
(sticks in millions)	2023	2022	Change		2023	2022	Change
Cigarettes:
Marlboro	52,339	57,809	(9.5)	%	17,437	19,484	(10.5)	%
Other premium	2,674	2,951	(9.4)	%	895	997	(10.2)	%
Discount	3,119	4,211	(25.9)	%	970	1,364	(28.9)	%
Total cigarettes	58,132	64,971	(10.5)	%	19,302	21,845	(11.6)	%
Cigars:
Black & Mild	1,359	1,303	4.3	%	451	438	3.0	%
Other	2	3	(33.3)	%	—	1	(100.0)	%
Total cigars	1,361	1,306	4.2	%	451	439	2.7	%
Total smokeable products	59,493	66,277	(10.2)	%	19,753	22,284	(11.4)	%

Note: Cigarettes shipment volume includes Marlboro; Other premium brands, such as Virginia Slims, Parliament and Benson & Hedges; and Discount brands, which include L&M, Basic and Chesterfield. Cigarettes volume includes units sold as well as promotional units but excludes units sold for distribution to Puerto Rico, U.S. Territories to overseas military and by Philip Morris Duty Free Inc., none of which, individually or in the aggregate, is material to our smokeable products segment.

The following table summarizes our cigarettes retail share performance:

	Retail Share
	For the Nine Months Ended September 30,					For the Three Months Ended September 30,
	2023		2022		Percentage Point Change	2023		2022		Percentage Point Change
Cigarettes:
Marlboro	42.1	%	42.7	%	(0.6)	42.3	%	42.6	%	(0.3)
Other premium	2.3		2.3		—	2.3		2.3		—
Discount	2.6		3.1		(0.5)	2.4		3.0		(0.6)
Total cigarettes	47.0	%	48.1	%	(1.1)	47.0	%	47.9	%	(0.9)

Note: Retail share results for cigarettes are based on data from Circana, Inc. and Circana Group, L.P. (“Circana”), as well as, Management Science Associates, Inc. (“MSA”). Circana is a newly formed company reflecting the recent merger of IRI and NPD Group, Inc. Circana maintains a blended retail service that uses a sample of stores and certain wholesale shipments to project market share and depict share trends. Similar to prior reporting, this service tracks sales in the food, drug, mass merchandisers, convenience, military, dollar store and club trade classes. For other trade classes selling cigarettes, retail share is based on shipments from wholesalers to retailers through the Store Tracking Analytical Reporting System (“STARS”), as provided by MSA. This service is not designed to capture sales through other channels, including the internet, direct mail and some illicitly tax-advantaged outlets. It is retail services’ standard practice to periodically refresh their retail scan services, which could restate retail share results that were previously released in these services.

For a discussion of volume trends and factors that impact volume and retail share performance, see Tobacco Space - Business Environment above.

60

Nine Months Ended September 30, 2023 Compared with the Nine Months Ended September 30, 2022

Our smokeable products segment’s reported and adjusted domestic cigarettes shipment volume decreased 10.5%, driven primarily by the industry’s decline rate (impacted by macroeconomic pressures on adult tobacco consumers’ disposable income and the growth of illicit e-vapor products) and retail share losses. When adjusted for trade inventory movements and other factors, total estimated domestic cigarette industry volume decreased by an estimated 8%.

Shipments of premium cigarettes accounted for 94.6% and 93.5% of our smokeable products segment’s reported domestic cigarettes shipment volume for the nine months ended September 30, 2023 and 2022, respectively.

Marlboro’s retail share of the total cigarette category decreased 0.6 share points to 42.1%, primarily due to increased macroeconomic pressures on adult tobacco consumers’ disposable income and increased competitive activity.

Total cigarettes industry discount segment retail share increased 1.6 share points to 28.2%, primarily due to increased macroeconomic pressures on adult tobacco consumers’ disposable income and increased competitive activity.

Three Months Ended September 30, 2023 Compared with the Three Months Ended September 30, 2022

Our smokeable products segment’s reported domestic cigarettes shipment volume decreased 11.6%, driven primarily by the industry’s decline rate (impacted by macroeconomic pressures on adult tobacco consumers’ disposable income and the growth of illicit e-vapor products), retail share losses, calendar differences and trade inventory movements. When adjusted for calendar differences and trade inventory movements, our smokeable products segment’s reported domestic cigarettes shipment volume decreased by an estimated 10%. When adjusted for trade inventory movements, calendar differences and other factors, total estimated domestic cigarette industry volume decreased by an estimated 8%.

Shipments of premium cigarettes accounted for 95.0% and 93.8% of our smokeable products segment’s reported domestic cigarettes shipment volume for the three months ended September 30, 2023 and 2022, respectively.

Marlboro’s retail share of the total cigarette category decreased 0.3 share points to 42.3%, primarily due to increased macroeconomic pressures on adult tobacco consumers’ disposable income and increased competitive activity. Marlboro’s retail share increased 0.3 share points from the second quarter of 2023. Additionally, Marlboro’s share of the premium segment grew to 58.9%, an increase of 0.4 share points versus the prior year and 0.3 share points sequentially.

Total cigarettes industry discount segment retail share increased 1.1 share points to 28.2%, primarily due to increased macroeconomic pressures on adult tobacco consumers’ disposable income and increased competitive activity. Total cigarettes industry discount segment retail share was unchanged from the first and second quarter of 2023.

For a discussion regarding discount product dynamics in 2023 and the economic conditions, including a high inflationary environment, that impact adult tobacco consumer purchasing behavior, see Operating Results by Business Segment - Tobacco Space - Business Environment - Summary above.

Pricing Actions

PM USA and Middleton executed the following pricing and promotional allowance actions during 2023 and 2022:

▪Effective July 23, 2023, PM USA increased the list price of Marlboro, L&M and Basic by $0.16 per pack. PM USA also increased the list price of all its other cigarette brands by $0.21 per pack.

▪Effective June 11, 2023, Middleton increased various list prices across substantially all of its cigar brands resulting in a weighted-average increase of approximately $0.15 per five-pack.

▪Effective April 23, 2023, PM USA increased the list price of Marlboro, L&M and Basic by $0.15 per pack. PM USA also increased the list price of all its other cigarette brands by $0.20 per pack.

▪Effective January 22, 2023, PM USA increased the list price of Marlboro, L&M, Basic and Chesterfield by $0.15 per pack. PM USA also increased the list price of all its other cigarette brands by $0.20 per pack.

▪Effective October 16, 2022, PM USA increased the list price of Marlboro, L&M, Basic and Chesterfield by $0.15 per pack. PM USA also increased the list price of all its other cigarette brands by $0.20 per pack.

▪Effective July 17, 2022, PM USA increased the list price on all of its cigarette brands by $0.15 per pack.

▪Effective May 22, 2022, Middleton increased various list prices across substantially all of its cigar brands resulting in a weighted-average increase of approximately $0.17 per five-pack.

▪Effective April 24, 2022, PM USA increased the list price of Marlboro, L&M, Basic and Chesterfield by $0.15 per pack. PM USA also increased the list price of all its other cigarette brands by $0.20 per pack.

▪Effective January 9, 2022, Middleton increased various list prices across substantially all of its cigar brands resulting in a weighted-average increase of approximately $0.13 per five-pack.

61

In addition:

▪Effective October 15, 2023, PM USA increased the list price of Marlboro, L&M and Basic by $0.17 per pack. PM USA also increased the list price of all its other cigarette brands by $0.22 per pack.

Oral Tobacco Products Segment

Financial Results

The following table summarizes operating results, includes reported and adjusted OCI margins, and provides a reconciliation of reported OCI to adjusted OCI for our oral tobacco products segment:

	Operating Results
	For the Nine Months Ended September 30,								For the Three Months Ended September 30,
(in millions)	2023			2022			Change		2023			2022			Change
Net revenues	$	1,993		$	1,948		2.3	%	$	685		$	670		2.2	%
Excise taxes	(85)			(91)					(28)			(30)
Revenues net of excise taxes	$	1,908		$	1,857				$	657		$	640
Reported and Adjusted OCI	$	1,314		$	1,262		4.1	%	$	455		$	425		7.1	%
Reported and Adjusted OCI margins (1)	68.9		%	68.0		%	0.9 pp		69.3		%	66.4		%	2.9 pp

(1) Reported and adjusted OCI margins are calculated as reported and adjusted OCI, respectively, divided by revenues net of excise taxes.

Nine Months Ended September 30, 2023 Compared with Nine Months Ended September 30, 2022

Net revenues, which include excise taxes billed to customers, increased $45 million (2.3%), due primarily to higher pricing ($132 million), which includes higher promotional investments, partially offset by lower shipment volume and a higher percentage of on! shipment volume relative to MST (“volume/mix”) versus 2022 ($86 million).

Reported and adjusted OCI increased $52 million (4.1%), due primarily to higher pricing, which includes higher promotional investments, and lower costs ($12 million), partially offset by lower volume/mix ($93 million).

Three Months Ended September 30, 2023 Compared with Three Months Ended September 30, 2022

Net revenues, which include excise taxes billed to customers, increased $15 million (2.2%), due primarily to higher pricing ($53 million), which includes lower promotional investments, partially offset by lower volume/mix ($36 million).

Reported and adjusted OCI increased $30 million (7.1%), due primarily to higher pricing, which includes lower promotional investments, and lower costs ($15 million), partially offset by lower volume/mix ($37 million).

Shipment Volume and Retail Share Results

The following table summarizes our oral tobacco products segment’s shipment volume performance:

	Shipment Volume
	For the Nine Months Ended September 30,				For the Three Months Ended September 30,
(cans and packs in millions)	2023	2022	Change		2023	2022	Change
Copenhagen	333.3	356.5	(6.5)	%	109.4	118.2	(7.4)	%
Skoal	123.3	136.1	(9.4)	%	40.4	45.3	(10.8)	%
on!	83.9	59.6	40.8	%	28.7	21.0	36.7	%
Other	49.3	51.3	(3.9)	%	16.3	16.9	(3.6)	%
Total oral tobacco products	589.8	603.5	(2.3)	%	194.8	201.4	(3.3)	%

Note: Other primarily includes Red Seal and Husky. Oral tobacco products shipment volume includes cans and packs sold, as well as promotional units, but excludes international volume, which is currently not material to our oral tobacco products segment. New types of oral tobacco products, as well as new packaging configurations of existing oral tobacco products, may or may not be equivalent to existing MST products on a can-for-can basis. To calculate volumes of cans and packs shipped, one pack of snus or one can of oral nicotine pouches, irrespective of the number of pouches in the pack or can, is assumed to be equivalent to one can of MST.

62

The following table summarizes our oral tobacco products segment’s retail share performance (excluding international volume):

	Retail Share
	For the Nine Months Ended September 30,					For the Three Months Ended September 30,
	2023		2022		Percentage Point Change	2023		2022		Percentage Point Change
Copenhagen	24.2	%	27.4	%	(3.2)	23.1	%	26.8	%	(3.7)
Skoal	9.8		11.4		(1.6)	9.3		11.1		(1.8)
on!	6.8		4.7		2.1	6.9		5.2		1.7
Other	2.9		3.2		(0.3)	2.8		3.2		(0.4)
Total oral tobacco products	43.7	%	46.7	%	(3.0)	42.1	%	46.3	%	(4.2)

Note: Our oral tobacco products segment’s retail share results exclude international volume, which is currently not material to our oral tobacco products segment. Retail share results for oral tobacco products are based on data from Circana, a tracking service that uses a sample of stores to project market share and depict share trends. This service tracks sales in the food, drug, mass merchandisers, convenience, military, dollar store and club trade classes on the number of cans and packs sold. Oral tobacco products are defined by Circana as MST, snus and oral nicotine pouches. New types of oral tobacco products, as well as new packaging configurations of existing oral tobacco products, may or may not be equivalent to existing MST products on a can-for-can basis. For example, one pack of snus or one can of oral nicotine pouches, irrespective of the number of pouches in the pack or can, is assumed to be equivalent to one can of MST. Because this service represents retail share performance only in key trade channels, it should not be considered a precise measurement of actual retail share. It is retail services’ standard practice to periodically refresh their retail scan services, which could restate retail share results that were previously released in these services.

For a discussion of volume trends and factors that impact volume and retail share performance, see Tobacco Space - Business Environment above.

Nine Months Ended September 30, 2023 Compared with Nine Months Ended September 30, 2022

Our oral tobacco products segment’s reported domestic shipment volume decreased 2.3%, driven primarily by retail share losses in MST, partially offset by the industry’s growth rate, calendar differences, trade inventory movements and other factors. When adjusted for calendar differences and trade inventory movements, our oral tobacco products segment’s reported domestic shipment volume decreased by an estimated 2.5%.

Total oral tobacco products category industry volume increased by an estimated 5% for the six months ended September 30, 2023, primarily driven by growth in oral nicotine pouches, partially offset by declines in MST volumes.

Our oral tobacco products segment’s retail share was 43.7%, as share declines for MST products were primarily driven by the category share growth of oral nicotine pouches.

Three Months Ended September 30, 2023 Compared with Three Months Ended September 30, 2022

Our oral tobacco products segment’s reported domestic shipment volume decreased 3.3%, driven primarily by retail share losses in MST and calendar differences, partially offset by the industry’s growth rate and other factors. When adjusted for calendar differences, our oral tobacco products segment’s reported domestic shipment volume decreased by an estimated 2%.

Our oral tobacco products segment’s retail share was 42.1%, as share declines for MST products were primarily driven by the category share growth of oral nicotine pouches.

The U.S. nicotine pouch category grew to 32.3% of the U.S. oral tobacco category, an increase of 9.8 share points versus the prior year. In addition, on!’s share of the nicotine pouch category was 21.4%.

Pricing Actions

USSTC executed the following pricing actions during 2023 and 2022:

•Effective August 22, 2023, USSTC increased the list price on its Copenhagen, Red Seal and Skoal brands by $0.09 per can. In addition, USSTC decreased the list price on select Husky brands by $0.18 per can.

•Effective July 23, 2023, Helix increased the list price on its on! brand by $0.09 per can.

▪Effective April 25, 2023, USSTC increased the list price on its Copenhagen popular price products, Red Seal and Husky brands by $0.09 per can. In addition, USSTC increased the list price on its Skoal brands and on the balance of its Copenhagen brands by $0.10 per can.

▪Effective January 24, 2023, USSTC increased the list price on its Copenhagen, Skoal, Red Seal and Husky brands by $0.09 per can.

63

▪Effective July 26, 2022, USSTC increased the list price on its Copenhagen popular price products by $0.13 per can. USSTC also decreased the list price on select Copenhagen brands by $0.11 per can. In addition, USSTC increased the list price on its Skoal and Red Seal brands and the balance of its Copenhagen brands by $0.09 per can and increased the list price on its Husky brand by $0.12 per can.

▪Effective May 24, 2022, USSTC increased the list price on its Copenhagen, Skoal and Red Seal brands by $0.09 per can. USSTC also increased the list price on its Husky brand by $0.12 per can.

▪Effective February 22, 2022, USSTC increased the list price on its Copenhagen, Skoal and Red Seal brands by $0.08 per can. USSTC also increased the list price on its Husky brand by $0.12 per can.

E-Vapor

Our NJOY e-vapor business is reported in our all other category. Reported domestic shipment volume(1) of ACE for the three months ended September 30, 2023 was approximately 7.5 million pods. The retail share of ACE pods in U.S. multi-outlet and convenience stores was essentially unchanged since the completion of the NJOY Transaction.

We continue to expect ACE distribution to reach a total of 70,000 stores by the end of 2023, representing approximately 70% of e-vapor volume and 55% of cigarette volume sold in the U.S. multi-outlet and convenience channel.

(1) E-vapor shipment volume and retail share includes NJOY ACE. Shipment volume includes pods. Retail share results are based on data from Circana, a tracking service that uses a sample of stores to project market share and depict share trends.

Liquidity and Capital Resources

We are a holding company that is primarily dependent on the capital resources of our subsidiaries to satisfy our liquidity requirements. Our access to the operating cash flows of our subsidiaries consists of cash received from the payment of dividends and distributions, and the payment of interest on intercompany loans. At September 30, 2023, our significant subsidiaries were not limited by contractual obligations in their ability to pay cash dividends or make other distributions with respect to their equity interests. In addition, we receive cash dividends on our interest in ABI and will continue to do so as long as ABI pays dividends.

At September 30, 2023, we had $1.5 billion of cash and cash equivalents. In addition to having access to the operating cash flows of our subsidiaries, our capital resources include access to credit markets in the form of commercial paper, availability under our $3.0 billion senior unsecured 5-year revolving credit agreement (“New Credit Agreement”), which we use for general corporate purposes, and access to credit markets through the issuance of long-term senior unsecured notes. For additional information, see Capital Markets and Other Matters below.

In addition to funding current operations, we primarily use our net cash from operating activities for payment of dividends, share repurchases under our share repurchase programs, repayment of debt, acquisitions of or investments in businesses and assets, and capital expenditures.

We believe our cash and cash equivalents balance, along with our future cash flows from operations, capacity for borrowings under the New Credit Agreement and access to credit and capital markets, provide sufficient liquidity to meet the needs of our business operations and to satisfy our projected cash requirements for the next 12 months and the foreseeable future.

Capital Markets and Other Matters

Credit Ratings - Our cost and terms of financing and our access to commercial paper markets may be impacted by applicable credit ratings. The impact of credit ratings on the cost of borrowings under our New Credit Agreement is discussed in Note 11. Debt to our condensed consolidated financial statements in Item 1 (“Note 11”).

At September 30, 2023, the credit ratings and outlook for our indebtedness by major credit rating agencies were:

	Short-term Debt	Long-term Debt	Outlook
Moody’s Investors Service, Inc. (“Moody’s”)	P-2	A3	Stable
Standard & Poor’s Financial Services LLC (“S&P”)	A-2	BBB	Positive
Fitch Ratings Inc.	F2	BBB	Stable

Credit Lines - From time to time, we have short-term borrowing needs to meet our working capital requirements arising from the timing of annual MSA payments, quarterly income tax payments and quarterly dividend payments, and generally use our commercial paper program to meet those needs.

Credit Agreement - At September 30, 2023, we had availability under our prior credit agreement for borrowings of up to an aggregate principal amount of $3.0 billion, and we were in compliance with the covenants in our prior credit agreement. On October 24, 2023, we terminated our prior credit agreement and entered into our New Credit Agreement. The terms of our New

64

Credit Agreement are substantially similar to those of our prior credit agreement. We expect to continue to meet the covenants in our New Credit Agreement. We monitor the credit quality of our bank group and do not know of any potential non-performing credit provider in that group. For further discussion on short-term borrowings, see Note 11.

Term Loan Facility - In June 2023, we entered into a $2.0 billion term loan facility and borrowed the full amount available to fund a portion of the cash payments paid at closing in connection with the NJOY Transaction. We repaid the term loan facility in full in July 2023. For further details on the term loan facility, see Note 11.

Long-Term Debt - At September 30, 2023 and December 31, 2022, our total long-term debt was $25.1 billion and $26.7 billion, respectively. In May 2023, we repaid in full our 2.950% senior unsecured notes in the aggregate principal amount of $218 million at maturity. In addition, in February 2023, we repaid in full our 1.000% senior unsecured Euro notes in the aggregate principal amount of $1.3 billion (€1.25 billion) at maturity. As a result of the repayments and changes in the Euro exchange rate, the weighted-average coupon interest rate on our total long-term debt increased to approximately 4.2% at September 30, 2023 from approximately 4.0% at December 31, 2022. For further details on long-term debt, see Note 11.

At September 30, 2023, our debt-to-Consolidated net earnings and debt-to-Consolidated EBITDA ratios were calculated as follows:

	For the Twelve Months Ended September 30, 2023 (1)
(in millions)
Consolidated net earnings	$	8,760
Interest and other debt expense, net	984
Provision for income taxes	2,137
Depreciation and amortization	257
EBITDA	12,138
(Income) loss from investments in equity securities and noncontrolling interests, net	(171)
(Gain) loss on Cronos-related financial instruments	1
Dividends from less than 50% owned affiliates	163
Consolidated EBITDA	$	12,131
Current portion of long-term debt (2)	$	1,121
Long-term debt (2)	23,977
Total Debt	$	25,098
Total Debt / Consolidated net earnings	2.9
Total Debt / Consolidated EBITDA	2.1

(1) Calculated as of the end of the applicable quarter on a rolling four quarters basis.

(2) Balance at September 30, 2023.

Guarantees and Other Similar Matters - As discussed in Note 13, we had unused letters of credit obtained in the ordinary course of business and guarantees (including third-party guarantees) outstanding at September 30, 2023. From time to time, we also issue lines of credit to affiliated entities. In addition, as discussed below in Supplemental Guarantor Financial Information and in Note 11, PM USA has issued guarantees relating to our obligations under our outstanding debt securities, any borrowings under our New Credit Agreement and amounts outstanding under our commercial paper program. These items have not had, and are not expected to have, a significant impact on our liquidity.

Payments Under State Settlement Agreements and FDA Regulation - As discussed in Note 13, PM USA has entered into State Settlement Agreements with the states, the District of Columbia and certain U.S. territories that call for certain payments. In addition, PM USA, Middleton and USSTC are subject to quarterly user fees imposed by the FDA as a result of the FSPTCA. For further discussion of the resolutions of certain disputes with states and territories related to the NPM adjustment provision under the MSA, see Health Care Cost Recovery Litigation - NPM Adjustment Disputes in Note 13.

Based on current agreements, estimated market share, estimated annual industry volume decline rates and inflation rates, the estimated amounts that we may charge to cost of sales for payments related to State Settlement Agreements and FDA user fees are $3.9 billion on average for the next three years. These amounts exclude the potential impact of any NPM Adjustment Items.

The estimated amounts due under the State Settlement Agreements charged to cost of sales in each year are generally paid in April of the following year. The amounts charged to cost of sales for FDA user fees are generally paid in the quarter in which

65

the fees are incurred. We paid approximately $3.5 billion and $3.8 billion for the nine months ended September 30, 2023 and 2022, respectively, in connection with the State Settlement Agreements and FDA user fees, primarily all of which was paid in the second quarter of each period. We recorded $3.0 billion and $3.2 billion of charges to cost of sales for the nine months ended September 30, 2023 and 2022, respectively, and $1.0 billion and $1.1 billion of charges to cost of sales for the three months ended September 30, 2023 and 2022, respectively, in connection with the State Settlement Agreements and FDA user fees. As previously stated, the payments due under the terms of the State Settlement Agreements and FDA user fees are subject to adjustment for several factors, including volume, operating income, inflation and certain contingent events and, in general, are allocated based on each manufacturer’s market share. The future payment amounts discussed above are estimates, and actual payment amounts will differ to the extent underlying assumptions differ from actual future results. For further discussion on the potential impact of inflation on future payments, see Operating Results by Business Segment - Tobacco Space - State Settlement Agreements.

Litigation-Related Deposits and Payments - With respect to certain adverse verdicts currently on appeal, to obtain stays of judgments pending appeals, as of September 30, 2023, PM USA had posted appeal bonds totaling $34 million, which have been collateralized with restricted cash that is included in assets on our condensed consolidated balance sheet.

Litigation is subject to uncertainty, and an adverse outcome or settlement of litigation could have a material adverse effect on our results of operations, cash flows or financial position in a particular fiscal quarter or fiscal year, as more fully disclosed in Note 13.

NJOY Acquisition - On June 1, 2023, we acquired NJOY Holdings and funded the NJOY Transaction cash payments at closing of approximately $2.75 billion (net of cash acquired), through a combination of a $2.0 billion term loan facility (which we repaid in full in July 2023), the issuance of commercial paper and available cash. We may also be obligated to pay up to $500 million in additional cash payments that are contingent on receipt of FDA authorizations with respect to certain NJOY products. For further discussion, see Note 2.

IQOS Purchase Agreement - In 2022, we entered into an agreement with PMI to, among other things, transition and ultimately conclude our relationship with respect to the IQOS System in the United States. We received a payment of $1.0 billion in 2022 and an additional payment of approximately $1.8 billion (including interest) in July 2023.

Equity and Dividends

During the first nine months of 2023 and 2022, we paid dividends of $5,040 million and $4,908 million, respectively, an increase of 2.7%, reflecting a higher dividend rate, partially offset by fewer shares outstanding as a result of shares we repurchased under our share repurchase programs.

In August 2023, our Board of Directors (“Board of Directors” or “Board”) declared a 4.3% increase in the quarterly dividend rate to $0.98 per share of our common stock versus the previous rate of $0.94 per share. Our current annualized dividend rate is $3.92 per share. In March 2023, we established a new progressive dividend goal that targets mid-single digits dividend growth annually. Future dividend payments remain subject to the discretion of our Board.

For a discussion of our share repurchase programs, see Note 1. Background and Basis of Presentation to our condensed consolidated financial statements in Item 1 and Part II, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds of this Form 10-Q.

Financial Review

Cash Provided by/Used in Operating Activities

During the first nine months of 2023, net cash provided by operating activities was $6,060 million compared with $5,637 million during the first nine months of 2022. This increase was due primarily to lower payments for State Settlement Agreements and income taxes.

We had a working capital deficit at September 30, 2023 and December 31, 2022, and believe we have the ability to fund working capital deficits with cash provided by operating activities, borrowings under our New Credit Agreement and access to the credit and capital markets.

Cash Provided by/Used in Investing Activities

During the first nine months of 2023, net cash used in investing activities was $1,217 million compared with $215 million during the first nine months of 2022. This increase was due primarily to the NJOY Transaction, partially offset by proceeds from the sale of IQOS System commercialization rights.

66

Cash Provided by/Used in Financing Activities

During the first nine months of 2023, net cash used in financing activities was $7,353 million compared with $7,476 million during the first nine months of 2022. This decrease was due primarily to lower share repurchases, partially offset by higher repayments of long-term debt and higher dividends paid on our common stock.

New Accounting Guidance Not Yet Adopted

See Note 14. New Accounting Guidance Not Yet Adopted to our condensed consolidated financial statements in Item 1 for a discussion of issued accounting guidance applicable to, but not yet adopted by, us.

Contingencies

See Note 13 for a discussion of contingencies.

Supplemental Guarantor Financial Information

PM USA (the “Guarantor”), which is a 100% owned subsidiary of Altria Group, Inc. (the “Parent”), has guaranteed the Parent’s obligations under its outstanding debt securities, borrowings under its New Credit Agreement and amounts outstanding under its commercial paper program (the “Guarantees”). Pursuant to the Guarantees, the Guarantor fully and unconditionally guarantees, as primary obligor, the payment and performance of the Parent’s obligations under the guaranteed debt instruments (the “Obligations”), subject to release under certain customary circumstances as noted below.

The Guarantees provide that the Guarantor guarantees the punctual payment when due, whether at stated maturity, by acceleration or otherwise, of the Obligations. The liability of the Guarantor under the Guarantees is absolute and unconditional irrespective of: any lack of validity, enforceability or genuineness of any provision of any agreement or instrument relating thereto; any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to departure from any agreement or instrument relating thereto; any exchange, release or non-perfection of any collateral, or any release or amendment or waiver of or consent to departure from any other guarantee, for all or any of the Obligations; or any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Parent or the Guarantor.

Under applicable provisions of federal bankruptcy law or comparable provisions of state fraudulent transfer law, the Guarantees could be voided, or claims in respect of the Guarantees could be subordinated to the debts of the Guarantor, if, among other things, the Guarantor, at the time it incurred the Obligations evidenced by the Guarantees:

▪received less than reasonably equivalent value or fair consideration therefor; and

▪either:

▪was insolvent or rendered insolvent by reason of such occurrence;

▪was engaged in a business or transaction for which the assets of the Guarantor constituted unreasonably small capital; or

▪intended to incur, or believed that it would incur, debts beyond its ability to pay such debts as they mature.

In addition, under such circumstances, the payment of amounts by the Guarantor pursuant to the Guarantees could be voided and required to be returned to the Guarantor, or to a fund for the benefit of the Guarantor, as the case may be.

The measures of insolvency for purposes of the foregoing considerations will vary depending upon the law applied in any proceeding with respect to the foregoing. Generally, however, the Guarantor would be considered insolvent if:

▪the sum of its debts, including contingent liabilities, was greater than the saleable value of its assets, all at a fair valuation;

▪the present fair saleable value of its assets was less than the amount that would be required to pay its probable liability on its existing debts, including contingent liabilities, as they become absolute and mature; or

▪it could not pay its debts as they become due.

To the extent the Guarantees are voided as a fraudulent conveyance or held unenforceable for any other reason, the holders of the guaranteed debt obligations would not have any claim against the Guarantor and would be creditors solely of the Parent.

The obligations of the Guarantor under the Guarantees are limited to the maximum amount as will not result in the Guarantor’s obligations under the Guarantees constituting a fraudulent transfer or conveyance, after giving effect to such maximum amount and all other contingent and fixed liabilities of the Guarantor that are relevant under Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to the Guarantees. For this purpose, “Bankruptcy Law” means Title 11, U.S. Code, or any similar federal or state law for the relief of debtors.

67

The Guarantor will be unconditionally released and discharged from the Obligations upon the earliest to occur of:

▪the date, if any, on which the Guarantor consolidates with or merges into the Parent or any successor;

▪the date, if any, on which the Parent or any successor consolidates with or merges into the Guarantor;

▪the payment in full of the Obligations pertaining to such Guarantees; and

▪the rating of the Parent’s long-term senior unsecured debt by S&P of A or higher.

The Parent is a holding company; therefore, its access to the operating cash flows of its wholly owned subsidiaries consists of cash received from the payment of dividends and distributions, and the payment of interest on intercompany loans by its subsidiaries. Neither the Guarantor nor other 100% owned subsidiaries of the Parent that are not guarantors of the debt (“Non-Guarantor Subsidiaries”) are limited by contractual obligations on their ability to pay cash dividends or make other distributions with respect to their equity interests.

The following tables include summarized financial information for the Parent and the Guarantor. Transactions between the Parent and the Guarantor (including investment and intercompany balances as well as equity earnings) have been eliminated. The Parent’s and the Guarantor’s intercompany balances with Non-Guarantor Subsidiaries have been presented separately. This summarized financial information is not intended to present the financial position or results of operations of the Parent or the Guarantor in accordance with GAAP.

Summarized Balance Sheets

(in millions of dollars)

	Parent				Guarantor
	September 30, 2023		December 31, 2022		September 30, 2023		December 31, 2022
Assets
Due from Non-Guarantor Subsidiaries	$	—	$	—	$	279	$	278
Other current assets	1,729		4,086		1,037		762
Total current assets	$	1,729	$	4,086	$	1,316	$	1,040
Due from Non-Guarantor Subsidiaries	$	6,561	$	4,790	$	—	$	—
Other assets	9,678		9,090		1,414		1,435
Total non-current assets	$	16,239	$	13,880	$	1,414	$	1,435
Liabilities
Due to Non-Guarantor Subsidiaries	$	2,995	$	2,342	$	1,027	$	912
Other current liabilities	3,137		3,751		3,430		3,925
Total current liabilities	$	6,132	$	6,093	$	4,457	$	4,837
Total non-current liabilities	$	26,500	$	26,591	$	627	$	633

Summarized Statements of Earnings (Losses)

(in millions of dollars)

	For the Nine Months Ended September 30, 2023
	Parent (1)		Guarantor (2)
Net revenues	$	—	$	15,606
Gross profit	—		8,622
Net earnings (losses)	(11,300)		5,743

(1) For the nine months ended September 30, 2023, net earnings (losses) include an approximate $10.8 billion loss related to the cancellation of certain interests in a non-guarantor subsidiary, $217 million of intercompany interest income from non-guarantor subsidiaries and $271 million of interest expense from non-guarantor subsidiaries.

(2) For the nine months ended September 30, 2023, net earnings (losses) include $172 million of intercompany interest income from non-guarantor subsidiaries.

68

Cautionary Factors That May Affect Future Results

Forward-Looking and Cautionary Statements

This Form 10-Q contains statements concerning our expectations, plans, objectives, future financial performance and other statements that are not historical facts. You can identify these forward-looking statements by use of words such as “strategy,” “expects,” “continues,” “plans,” “anticipates,” “believes,” “will,” “estimates,” “forecasts,” “intends,” “projects,” “goals,” “objectives,” “guidance,” “targets” and other words of similar meaning. You can also identify them by the fact that they do not relate strictly to historical or current facts.

We cannot guarantee that any forward-looking statement will be realized, although we believe we have been prudent in our plans, estimates and assumptions. Achievement of future results is subject to risks, uncertainties and assumptions that may prove to be inaccurate. Should known or unknown risks or uncertainties materialize, or should underlying estimates or assumptions prove inaccurate, actual results could differ materially from those anticipated, estimated or projected. You should bear this in mind as you consider our forward-looking statements and whether to invest in or remain invested in our securities. In connection with the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, we are identifying important factors that, individually or in the aggregate, could cause actual results and outcomes, including with respect to our ability to achieve our Vision, to differ materially from those contained in, or implied by, any forward-looking statements we make. Any such statement is qualified by reference to the following cautionary statements. We elaborate on these important factors and the risks we face throughout this Form 10-Q, particularly in the “Executive Summary” and “Business Environment” sections preceding our discussion of the operating results of our segments above, in Part II, Item 1A. Risk Factors in this Form 10-Q, and in our other publicly filed reports, including our 2022 Form 10-K, First Quarter Form 10-Q and Second Quarter Form 10-Q. These factors and risks include the following:

▪our inability to anticipate and respond to changes in adult tobacco consumer preferences and purchase behavior;

▪our inability to compete effectively;

▪the growth of the e-vapor category, including illegal flavored disposable e-vapor products, and other innovative tobacco products, including oral nicotine pouches, contributing to reductions in cigarette and MST consumption levels and shipment volume;

▪our failure to commercialize innovative products, including tobacco products that may reduce health risks relative to other tobacco products and appeal to adult tobacco consumers;

▪changes, including in macroeconomic and geopolitical conditions (including inflation), that result in shifts in adult tobacco consumer disposable income and purchasing behavior, including choosing lower-priced and discount brands or products, and reductions in shipment volumes;

▪unfavorable outcomes with respect to litigation proceedings or any governmental investigations;

▪the risks associated with significant federal, state and local government actions, including FDA regulatory actions, and various private sector actions;

▪increases in tobacco product-related taxes;

▪our failure to complete or manage successfully strategic transactions, including the NJOY Transaction and other acquisitions, dispositions, joint ventures and investments in third parties, or realize the anticipated benefits of such transactions;

▪significant changes in price, availability or quality of tobacco, other raw materials or component parts, including as a result of changes in macroeconomic, climate and geopolitical conditions;

▪our reliance on a few significant facilities and a small number of key suppliers, distributors and distribution chain service providers and the risks associated with an extended disruption at a facility or in service by a supplier, distributor or distribution chain service provider;

▪the risk that we may be required to write down intangible assets, including trademarks and goodwill, due to impairment;

▪the risk that we could decide, or be required to, recall products;

▪the various risks related to health epidemics and pandemics, such as the COVID-19 pandemic, and the measures that international, federal, state and local governments, agencies, law enforcement and health authorities implement to address them;

▪our inability to attract and retain a highly skilled and diverse workforce due to the decreasing social acceptance of tobacco usage, tobacco control actions and other factors;

▪the risks associated with the various U.S. and foreign laws and regulations to which we are subject due to our international business operations;

69

▪the risks concerning a challenge to our tax positions, an increase in the income tax rate or other changes to federal or state tax laws;

▪the risks associated with legal and regulatory requirements related to climate change and other environmental sustainability matters;

▪disruption and uncertainty in the credit and capital markets, including risk of losing access to these markets;

▪a downgrade or potential downgrade of our credit ratings;

▪our inability to attract investors due to increasing investor expectations of our performance relating to environmental, social and governance factors;

▪the failure of our, or our key service providers’ or key suppliers’, information systems to function as intended, or cyber-attacks or security breaches;

▪our failure to comply with personal data protection and privacy laws;

▪the risk that the expected benefits of our investment in ABI may not materialize in the expected manner or timeframe or at all, including due to macroeconomic and geopolitical conditions; foreign currency exchange rates; ABI’s business results; ABI’s share price; impairment losses on the value of our investment; our incurrence of additional tax liabilities related to our investment in ABI; and potential reductions in the number of directors that we can have appointed to the ABI board of directors; and

▪the risks associated with our investment in Cronos, including legal, regulatory and reputational risks and the risk that the expected benefits of the transaction may not materialize in the expected timeframe or at all.

You should understand that it is not possible to predict or identify all factors and risks. Consequently, you should not consider the foregoing list to be complete. We do not undertake to update any forward-looking statement that we may make from time to time except as required by applicable law.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

The fair value of our long-term debt, all of which is fixed-rate debt, is subject to fluctuations resulting primarily from changes in market interest rates. The following table provides the fair value of our long-term debt and the change in fair value based on a 1% increase or decrease in market interest rates at September 30, 2023 and December 31, 2022:

(in billions)	September 30, 2023		December 31, 2022
Fair value	$	21.3	$	22.9
Decrease in fair value from a 1% increase in market interest rates	1.6		1.7
Increase in fair value from a 1% decrease in market interest rates	1.9		2.0

We expect interest rates on borrowings under our New Credit Agreement to be based on the Term Secured Overnight Financing Rate, plus a percentage based on the higher of the ratings of our long-term senior unsecured debt from Moody’s and S&P. The applicable percentage for borrowings under our prior credit agreement at September 30, 2023 was 1.0% based on our long-term senior unsecured debt ratings on that date. At September 30, 2023 and December 31, 2022, we had no borrowings under our prior credit agreement.

Item 4. Controls and Procedures

We carried out an evaluation, with the participation of our management, including Altria’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e)) under the Securities Exchange Act of 1934, as amended, as of the end of the period covered by this Form 10-Q. Based upon that evaluation, Altria’s Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective.

There have been no changes in our internal control over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II – OTHER INFORMATION

Item 1. Legal Proceedings

See Note 13 for a discussion of legal proceedings pending against us. See also Exhibits 99.1 and 99.2 to this Form 10-Q.

70

Item 1A. Risk Factors

Information regarding Risk Factors appears in Part I, Item 1A. Risk Factors of our 2022 Form 10-K and Part II, Item 1A. Risk Factors of our First Quarter Form 10-Q and Second Quarter Form 10-Q. There have been no material changes to the risk factors previously disclosed in our 2022 Form 10-K, First Quarter Form 10-Q and Second Quarter Form 10-Q.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

In January 2023, our Board of Directors authorized a new $1.0 billion share repurchase program, which we expect to complete by December 31, 2023. The timing of share repurchases under this program depends upon marketplace conditions and other factors, and the program remains subject to the discretion of our Board.

Our share repurchase activity for each of the three months in the period ended September 30, 2023, was as follows:

Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs
July 1-31, 2023	1,611,366	$	45.65	1,611,366	$	454,341,007
August 1-31, 2023	2,269,555	$	43.85	2,269,555	$	354,819,359
September 1-30, 2023	1,985,549	$	43.59	1,985,549	$	268,278,728
	5,866,470	$	44.26	5,866,470

Item 5. Other Information

During the quarter ended September 30, 2023, none of our directors or officers adopted, modified or terminated any “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

71

Item 6. Exhibits

31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.1	Certain Litigation Matters.
99.2	Trial Schedule for Certain Cases.
101.INS	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	XBRL Taxonomy Extension Schema.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase.
101.DEF	XBRL Taxonomy Extension Definition Linkbase.
101.LAB	XBRL Taxonomy Extension Label Linkbase.
101.PRE	Taxonomy Extension Presentation Linkbase.
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

72

Signature

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 thereunto duly authorized.

ALTRIA GROUP, INC.

/s/ SALVATORE MANCUSO

Salvatore Mancuso

Executive Vice President and

Chief Financial Officer

October 26, 2023

73

EX-31.1

Exhibit 31.1

Certifications

I, William F. Gifford, Jr., certify that:

1.I have reviewed this quarterly report on Form 10-Q of Altria Group, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 26, 2023

/s/ WILLIAM F. GIFFORD, JR.

William F. Gifford, Jr.

Chief Executive Officer

EX-31.2

Exhibit 31.2

Certifications

I, Salvatore Mancuso, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Altria Group, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 26, 2023

/s/ SALVATORE MANCUSO

Salvatore Mancuso

Executive Vice President and

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Altria Group, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, William F. Gifford, Jr., Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

    (1)    the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

    (2)    the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ WILLIAM F. GIFFORD, JR.

William F. Gifford, Jr.

Chief Executive Officer

October 26, 2023

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Altria Group, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Salvatore Mancuso, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

    (1)    the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

    (2)    the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ SALVATORE MANCUSO

Salvatore Mancuso

Executive Vice President and

Chief Financial Officer

October 26, 2023

EX-99.1

Exhibit 99.1

CERTAIN LITIGATION MATTERS

As described in Note 13. Contingencies to Altria Group, Inc.’s (“Altria”) condensed consolidated financial statements in Part I, Item 1 of the Quarterly Report on Form 10-Q to which this Exhibit 99.1 is attached (“Note 13”), there are legal proceedings covering a wide range of matters pending or threatened in various United States and foreign jurisdictions against Altria, its subsidiaries, including Philip Morris USA Inc. (“PM USA”), and their respective indemnitees. Various types of claims may be raised in these proceedings, including product liability, unfair trade practices, antitrust, tax, contraband shipments, patent infringement, employment matters, claims alleging violation of the Racketeer Influenced and Corrupt Organizations Act, claims for contribution and claims of competitors, shareholders or distributors. Claims related to tobacco products generally fall within the following categories: (i) smoking and health cases alleging personal injury brought on behalf of individual plaintiffs, (ii) smoking and health cases primarily alleging personal injury or seeking court-supervised programs for ongoing medical monitoring and purporting to be brought on behalf of a class of individual plaintiffs, including cases in which the aggregated claims of a number of individual plaintiffs are to be tried in a single proceeding, (iii) health care cost recovery cases brought by governmental (both domestic and foreign) plaintiffs seeking reimbursement for health care expenditures allegedly caused by cigarette smoking and/or disgorgement of profits, (iv) class action suits alleging that the use of the terms “Lights” and “Ultra Lights” constitute deceptive and unfair trade practices, common law fraud or statutory fraud, unjust enrichment, breach of warranty, or violations of the Racketeer Influenced and Corrupt Organizations Act, (v) class action suits involving e-vapor products and (vi) international cases. The following lists certain of the pending claims against Altria and PM USA included in these and other categories.

SMOKING AND HEALTH LITIGATION

The following lists the consolidated individual smoking and health cases as well as smoking and health class actions pending against PM USA and, in some cases, Altria and/or its other subsidiaries and affiliates, as of October 23, 2023. See International Cases below for a list of smoking and health class actions pending in Canada.

Flight Attendant Litigation

The settlement agreement entered into in 1997 in the case of Broin, et al. v. Philip Morris Companies Inc., et al., which was brought by flight attendants seeking damages for personal injuries allegedly caused by environmental tobacco smoke, allowed members of the Broin class to file individual lawsuits seeking compensatory damages, but prohibited them from seeking punitive damages. See Note 13 for a discussion of this litigation.

Domestic Class Actions

Engle, et al. v. R.J. Reynolds Tobacco Co., et al., Circuit Court, Eleventh Judicial Circuit, Dade County, Florida, filed May 5, 1994. SeeNote 13 for a discussion of this case (which has concluded) and the Engle progeny litigation.

Young, et al. v. The American Tobacco Company, et al., Civil District Court, Orleans Parish, Louisiana, filed November 12, 1997.

HEALTH CARE COST RECOVERY LITIGATION

The following lists a health care cost recovery action pending against PM USA and Altria as of October 23, 2023. See International Cases below for a list of international health care cost recovery actions.

Department of Justice Case

The United States of America v. Philip Morris Incorporated, et al., United States District Court, District of Columbia, filed September 22, 1999. See Note 13 for a discussion of this case.

“LIGHTS/ULTRA LIGHTS” CASES

The following lists the “Lights/Ultra Lights” class actions pending against Altria and/or its various subsidiaries and others as of October 23, 2023.

Moore, et al. v. Philip Morris Incorporated, et al., Circuit Court, Marshall County, West Virginia, filed September 17, 2001.

Virden v. Altria Group, Inc., et al., Circuit Court, Hancock County, West Virginia, filed March 28, 2003.

1

CLASS ACTION LAWSUITS INVOLVING E-VAPOR PRODUCTS

The following lists class action lawsuits relating to e-vapor products that are pending against Altria and/or its various subsidiaries and others as of October 23, 2023.

NesSmith, et al. v. JUUL Labs Inc., et al., United States District Court, Middle District of Florida, filed April 15, 2019.

Peavy (formerly Swearingen), et al. v. JUUL Labs, Inc., et al., United States District Court, Northern District of Alabama, filed May 31, 2019.

R.E., et al. v. JUUL Labs, Inc., et al., United States District Court, Southern District of West Virginia, filed August 13, 2019.

M.D., et al. v. JUUL Labs, Inc., et al., United States District Court, Northern District of Mississippi, filed August 15, 2019.

Oberhauser, et al. v. JUUL Labs, Inc., et al., United States District Court, Northern District of California, filed September 12, 2019.

Hochhauser, et al. v. JUUL Labs, Inc., et al., United States District Court, Eastern District of New York, filed October 1, 2019.

Emidy et al. v. JUUL Labs, Inc., et al., United States District Court, Western District of Tennessee, filed October 2, 2019.

Montgomery County, Maryland, et al. v. JUUL Labs, Inc., et al., United States District Court, District of Maryland, filed October 11, 2019.

King County, Washington, et al. v. JUUL Labs, Inc., et al., United States District Court, Western District of Washington, filed October 16, 2019.

City of Rochester, et al. v. JUUL Labs, Inc., et al., United States District Court, Northern District of California, filed November 6, 2019.

Jefferson County School District, et al. v. JUUL Labs, Inc., et al., United States District Court, Southern District of Mississippi, filed December 5, 2019.

Ledbetter, et al. v. JUUL Labs, Inc., et al., United States District Court, Northern District of Alabama, filed December 12, 2019.

Escambia County School District, et al. v. JUUL Labs, Inc., et al., United States District Court, Northern District of Florida, filed December 18, 2019.

Unified School District No. 320, Pottawatomie County, KS, individually and On Behalf Of Others Similarly Situated, v. Juul Labs Inc. et al., United States District Court, Northern District of California, filed December 18, 2019.

School Board of Miami-Dade County, et al. v. JUUL Labs, Inc., et al., United States District Court, Northern District of California, filed December 19, 2019.

The School Board of Broward County, et al. v. JUUL Labs, Inc., et al., United States District Court, Northern District of California, filed December 19, 2019.

Frederick County, et al. v. JUUL Labs, Inc., et al., United States District Court, Northern District of California, filed December 19, 2019.

Imani, et al. v. JUUL Labs, Inc., et al., United States District Court, District of Oregon, filed December 20, 2019.

Cooper, et al. v. JUUL Labs, Inc., et al., United States District Court, Northern District of Texas, filed January 9, 2020.

O’Reilly, et al. v. JUUL Labs, Inc., et al., United States District Court, Northern District of California, filed January 13, 2020.

Gabbard, et al. v. JUUL Labs, Inc., et al., United States District Court, Eastern District of Kentucky, filed February 21, 2020.

Peoria Public Schools v. JUUL Labs, Inc., et al., United States District Court, Northern District of California, filed May 15, 2020.

Montgomery County Public Schools, MD. v. JUUL Labs, Inc. et al., United States District Court, Northern District of California, filed December 21, 2020.

Baltimore County v. JUUL Labs, Inc., et al. United States District Court, Northern District of California, filed December 21, 2020.

Ann Parker, On Behalf Of Her Daughter, S.P., Individually And On Behalf Of Others Similarly Situated v. Juul Labs Inc. et al., United States District Court, Northern District of California, filed March 29, 2021.

Adam Jenkins, Individually And On Behalf Of Others Similarly Situated, On Behalf Of D.L.J. v. Juul Labs Inc. et al., United States District Court, Northern District of California, filed March 30, 2021.

2

Charleen Richey, On Behalf Of Her Son, T.Y., Individually And On Behalf Of Others Similarly Situated v. Juul Labs Inc. et al., United States District Court, Northern District of California, filed March 31, 2021.

Shayla Aceti, individually and on behalf of others similarly situated v. Juul Labs Inc et al., United States District Court, Northern District of California, filed March 30, 2021.

Robert Dyer, On Behalf Of His Son, B.D., individually and on behalf of others similarly situated v. Juul Labs Inc., United States District Court, Northern District of California, filed March 30, 2021.

Joan Eubanks, individually and on behalf of others similarly situated v. Juul Labs Inc. et al., United States District Court, Northern District of California, filed March 31, 2021.

Bruce Gibson, on behalf of his son, K.G., individually and others similarly situated v. Juul Labs Inc. et al., United States District Court, Northern District of California, filed March 31, 2021.

Jenika Ingram, individually and on behalf of others similarly situated v. Juul Labs Inc. et al., United States District Court, Northern District of California, filed March 31, 2021.

Shirley Moses on behalf of her daughter, K.S.C., individually and on behalf of others similarly situated v. Juul Labs Inc. et al., United States District Court, Northern District of California, filed March 31, 2021.

Katherine Dentler, individually and on behalf of others similarly situated v. Juul Labs Inc. et al., United States District Court, Northern District of California, filed March 31, 2021.

Vickie Perry, On Behalf Of Her Daughter LP, individually and on behalf of others similarly situated v. Juul Labs Inc. et al., United States District Court, Northern District of California, filed March 31, 2021.

Jessica Pierre, individually and on behalf of others similarly situated v. Juul Labs Inc.; Altria Group Inc. et al., United States District Court, Northern District of California, filed March 31, 2021.

Lacretia Pulce, On Behalf Of Her Daughter, K.P., individually and on behalf of others similarly situated v. Juul Labs Inc. et al., United States District Court, Northern District of California, filed March 31, 2021.

Charles Tippe, individually and on behalf of others similarly situated v. Juul Labs Inc. et al., United States District Court, Northern District of California, filed March 31, 2021.

Janece Wilhelm, individually and on behalf of others similarly situated v. Juul Labs Inc. et al., United States District Court, Northern District of California, filed March 31, 2021.

Janece Wilhelm, on behalf of her son. D.L., individually and on behalf of others similarly situated v. Juul Labs Inc.; et al., United States District Court, Northern District of California, filed April 1, 2021.

Tonya Williams-Walker, On Behalf Of Her Son, M.W., and on behalf of others similarly situated v. Juul Labs Inc.et al., United States District Court, Northern District of California, filed March 31, 2021.

Randi Lines, individually and on behalf of others similarly situated v. Juul Labs Inc. et al., United States District Court, Northern District of California, filed March 31, 2021.

Adam Jenkins, On Behalf Of His Son, M.R.J., Individually And On Behalf Of Others Similarly Situated v. Juul Labs Inc. et al., United States District Court, Northern District of California, filed March 30, 2021.

Ann Parker, On Behalf Of Her Daughter, S.P., Individually And On Behalf Of Others Similarly Situated v. Juul Labs Inc. et al., United States District Court, Northern District of California, filed March 29, 2021.

Erin Puente, individually and On Behalf Of Others Similarly Situated, v. Juul Labs Inc. et al., United States District Court, Northern District of California, filed March 30, 2021.

Shannon Kinnard, individually and On Behalf Of Others Similarly Situated, v. Juul Labs Inc. et al., United States District Court, Northern District of California, filed March 30, 2021.

John Hollis, individually and On Behalf Of Others Similarly Situated, v. Juul Labs Inc. et al., United States District Court, Northern District of California, filed March 30, 2021.

Wolfgang and Suzanne Ziegenhagen on behalf of their son, H.Z. individually and on behalf of others similarly situated v. Juul Labs Inc. et al., United States District Court, Northern District of California, filed March 30, 2021.

Janis Kelly on behalf of her son, C.J.W., individually and on behalf of others similarly situated v. Juul Labs Inc. et al., United States District Court, Northern District of California, filed March 30, 2021.

Coleman Holniker, individually and On Behalf of Others Similarly Situated, v. Juul Labs Inc. et al., United States District Court, Northern District of California, filed March 31, 2021.

3

Addison Altizer, individually and On Behalf Of Others Similarly Situated, v. Juul Labs Inc. et al., United States District Court, Northern District of California, filed March 31, 2021.

Charleen Richey, On Behalf Of Her Son, T.Y., Individually And On Behalf Of Others Similarly Situated v. Juul Labs Inc. et al., United States District Court, Northern District of California, filed March 31, 2021.

Nicholas Vogel, on behalf of his son, E.V., individually and on behalf of others similarly situated v. Juul Labs Inc. et al., United States District Court, Northern District of California, filed May 13, 2021.

Pike County School Corp. Metropolitan School District Of Wabash County, Individually & On Behalf Of Others Similarly Situated v. Juul Labs Inc. et al., United States District Court, Northern District of California, filed April 18, 2022.

See Note 13 for a discussion of these cases.

IQOS LITIGATION

RAI Strategic Holdings, Inc., et al. v. Altria Client Services LLC, et al., United States District Court, Eastern District of Virginia, filed April 9, 2020.

Healthier Choices Management Corp. v. Philip Morris USA Inc., et al., United States District Court, Northern District of Georgia, filed November 30, 2020.

See Note 13 for a discussion of these cases.

ANTITRUST LITIGATION

Reece, et al. v. Altria Group, Inc., et al., United States District Court, Northern District of California, filed April 7, 2020.

Blomquist, et al. v. Altria Group, Inc., et al., United States District Court, Northern District of California, filed April 13, 2020.

Martinez, et al. v. Altria Group, Inc., et al., United States District Court, Northern District of California, filed April 14, 2020.

Deadwyler, et al. v. Altria Group, Inc., et al., United States District Court, Northern District of California, filed April 20, 2020.

Licari, et al. v. Altria Group, Inc., et al., United States District Court, Northern District of California, filed April 21, 2020.

Flannery, et al. v. Altria Group, Inc., et al., United States District Court, Northern District of California, filed April 27, 2020.

Larimore, et al. v. Altria Group, Inc., et al., United States District Court, Northern District of California, filed April 30, 2020.

Walsh, et al. v. Altria Group, Inc., et al., United States District Court, Northern District of California, filed May 8, 2020.

Redfield, et al. v. Altria Group, Inc., et al., United States District Court, Northern District of California, filed May 15, 2020.

Carlson, et al. v. Altria Group, Inc., et al., United States District Court, Northern District of California, filed May 21, 2020.

B&C Retail, Inc., et al. v. Altria Group, Inc., et al., United States District Court, Northern District of California, filed June 11, 2020.

Sofijon, Inc., et al. v. Altria Group, Inc., et al., United States District Court, Northern District of California, filed June 11, 2020.

Noor Baig, Inc., et al. v. Altria Group, Inc., et al., United States District Court, Northern District of California, filed June 11, 2020.

Somerset Party Store, Inc., et al. v. Altria Group, Inc., et al., United States District Court, Northern District of California, filed June 18, 2020.

Jackson, et al. v. Altria Group, Inc., et al., United States District Court, Northern District of California, filed June 25, 2020.

McGhee, et al. v. Altria Group, Inc., et al., United States District Court, Northern District of California, filed July 1, 2020.

Irwindale Fuel Station, Inc. v. Altria Group, Inc., et al., United States District Court, Northern District of California, filed July 15, 2020.

4

INTERNATIONAL CASES

The following lists cases pending against Altria and/or its subsidiaries in foreign jurisdictions as of October 23, 2023.

Canada

O’Donnell, et. al. v. JUUL Labs, Canada, Ltd., et al., Ontario, Ontario Superior Court, filed April 17, 2020. E-vapor class action.

Salvatore, et al. v. JUUL Labs Canada, Ltd., et al., Quebec, District of Montreal Superior Court, filed June 12, 2019. E-vapor class action.

Stephens, et al. v. JUUL Labs, Inc., et al., British Columbia, Canada Supreme Court, filed October 1, 2019. E-vapor class action.

Her Majesty the Queen in Right of British Columbia v. Imperial Tobacco Limited, et al., Supreme Court, British Columbia, Vancouver Registry, Canada, filed January 24, 2001. Health care cost recovery action.

Her Majesty the Queen in Right of the Province of New Brunswick v. Rothmans, Inc., et al., Court of Queen’s Bench of New Brunswick Judicial District of Fredericton, Canada, filed March 13, 2008. Health care cost recovery action.

Dorion v. Canadian Tobacco Manufacturers’ Council, et al., Court of Queen’s Bench of Alberta, Judicial District of Calgary, Canada, filed on or about June 17, 2009. Smoking and health class action.

Semple v. Canadian Tobacco Manufacturers’ Council, et al., Supreme Court of Nova Scotia, Canada, filed on or about June 18, 2009. Smoking and health class action.

Kunka v. Canadian Tobacco Manufacturers’ Council, et al., Court of Queen’s Bench of Manitoba, Winnipeg Judicial Centre, Canada, filed on an unknown date in June 2009. Smoking and health class action.

Adams v. Canadian Tobacco Manufacturers’ Council, et al., Court of Queen’s Bench for Saskatchewan, Judicial Centre of Regina, Canada, filed on or about July 10, 2009. Smoking and health class action.

Her Majesty the Queen in Right of Ontario v. Rothmans Inc., et al., Superior Court of Justice of Ontario, Canada, filed on or about September 30, 2009. Health care cost recovery action.

Bourassa v. Imperial Tobacco Canada Limited, et al., Supreme Court of British Columbia, Victoria Registry, Canada, filed on or about June 25, 2010. Smoking and health class action.

McDermid v. Imperial Tobacco Canada Limited, et al., Supreme Court of British Columbia, Victoria Registry, Canada, filed on or about June 25, 2010. Smoking and health class action.

Attorney General of Newfoundland and Labrador v. Rothmans Inc., et al., Supreme Court of Newfoundland and Labrador, Trial Division, Canada, filed February 8, 2011. Health care cost recovery action.

Attorney General of Quebec v. Imperial Tobacco Canada Limited, et al., Superior Court of Quebec, Montreal District, Canada, filed June 8, 2012. Health care cost recovery action.

Her Majesty in Right of Alberta v. Altria Group, Inc., et al., Court of Queen’s Bench of Alberta, Judicial District of Calgary, Canada, filed June 8, 2012. Health care cost recovery action.

Her Majesty the Queen in the Right of Manitoba v. Rothmans, Benson & Hedges Inc., et al., Court of Queen’s Bench of Manitoba, Winnipeg Judicial Centre, Canada, filed May 31, 2012. Health care cost recovery action.

Her Majesty the Queen in Right of Saskatchewan v. Rothmans, Benson & Hedges Inc., et al., Court of Queen’s Bench of Saskatchewan, Judicial Centre of Saskatoon, Canada, filed on June 8, 2012. Health care cost recovery action.

Her Majesty in the Right of the Province of Prince Edward Island v. Rothmans, Benson & Hedges, Inc., et al., Supreme Court of Prince Edward Island, filed on September 10, 2012. Health care cost recovery action.

Her Majesty the Queen in Right of the Province of Nova Scotia v. Benson & Hedges, Inc., et al., Supreme Court of Nova Scotia, filed on January 2, 2015. Health care cost recovery action.

Jacklin v. Canadian Tobacco Manufacturers’ Council et al., Ontario Superior Court of Justice, Case No. 5379412, Ontario, Canada, filed on or about June 27, 2012. Smoking and health class action.

See Note 13 for a discussion of these cases.

5

EX-99.2

Exhibit 99.2

TRIAL SCHEDULE FOR CERTAIN CASES

Below is a schedule, as of October 23, 2023, setting forth by month the number of individual smoking and health cases against Philip Morris USA Inc. that are scheduled for but not in trial through December 31, 2023.

2023

Engle progeny                        

October	1
November	1
December	0

As of October 23, 2023, there are no Engle progeny cases in trial.

Other Individual Smoking & Health

October	0
November	1
December	0

As of October 23, 2023, there are no non-Engle progeny cases in trial.

XML

Cover Page - shares	9 Months Ended
	Sep. 30, 2023	Oct. 17, 2023
Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2023
Document Transition Report	false
Entity File Number	1-08940
Entity Registrant Name	Altria Group, Inc.
Entity Incorporation, State or Country Code	VA
Entity Tax Identification Number	13-3260245
Entity Address, Address Line One	6601 West Broad Street,
Entity Address, City or Town	Richmond,
Entity Address, State or Province	VA
Entity Address, Postal Zip Code	23230
City Area Code	804
Local Phone Number	274-2200
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)		1,768,646,674
Amendment Flag	false
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Entity Central Index Key	0000764180
Current Fiscal Year End Date	--12-31
Common Stock, $0.33 1/3 par value [Member]
Entity Information [Line Items]
Title of 12(b) Security	Common Stock, $0.33 1/3 par value
Trading Symbol	MO
Security Exchange Name	NYSE
1.700% Notes due 2025 [Member]
Entity Information [Line Items]
Title of 12(b) Security	1.700% Notes due 2025
Trading Symbol	MO25
Security Exchange Name	NYSE
2.200% Notes due 2027 [Member]
Entity Information [Line Items]
Title of 12(b) Security	2.200% Notes due 2027
Trading Symbol	MO27
Security Exchange Name	NYSE
3.125% Notes due 2031 [Member]
Entity Information [Line Items]
Title of 12(b) Security	3.125% Notes due 2031
Trading Symbol	MO31
Security Exchange Name	NYSE

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Assets
Cash and cash equivalents	$ 1,537	$ 4,030
Receivables:
Receivable from the sale of IQOS System commercialization rights	0	1,721
Other	57	48
Inventories:
Leaf tobacco	606	704
Other raw materials	212	186
Work in process	29	24
Finished product	327	266
Inventory, net	1,174	1,180
Other current assets	622	241
Total current assets	3,390	7,220
Property, plant and equipment, at cost	4,526	4,427
Less accumulated depreciation	2,897	2,819
Property, plant and equipment, net	1,629	1,608
Goodwill	6,791	5,177
Other intangible assets, net	13,727	12,384
Investments in equity securities ($0 million and $250 million at September 30, 2023 and December 31, 2022, respectively, measured at fair value)	9,907	9,600
Other assets	1,025	965
Total Assets	36,469	36,954
Liabilities
Current portion of long-term debt	1,121	1,556
Accounts payable	490	552
Accrued liabilities:
Marketing	663	599
Settlement charges	2,388	2,925
Other	1,277	1,299
Deferred gain from the sale of IQOS System commercialization rights	2,700	0
Dividends payable	1,742	1,685
Total current liabilities	10,381	8,616
Long-term debt	23,977	25,124
Deferred income taxes	2,527	2,897
Accrued pension costs	127	133
Accrued postretirement health care costs	1,096	1,083
Deferred gain from the sale of IQOS System commercialization rights	0	2,700
Other liabilities	1,718	324
Total liabilities	39,826	40,877
Contingencies (Note 13)
Stockholders’ Equity (Deficit)
Common stock, par value $0.33 1/3 per share (2,805,961,317 shares issued)	935	935
Additional paid-in capital	5,895	5,887
Earnings reinvested in the business	30,767	29,792
Accumulated other comprehensive losses	(2,471)	(2,771)
Cost of repurchased stock (1,036,080,497 shares at September 30, 2023 and 1,020,427,195 shares at December 31, 2022)	(38,533)	(37,816)
Total stockholders’ equity (deficit) attributable to Altria	(3,407)	(3,973)
Noncontrolling interests	50	50
Total stockholders’ equity (deficit)	(3,357)	(3,923)
Total Liabilities and Stockholders’ Equity (Deficit)	$ 36,469	$ 36,954

XML

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Stockholders’ Equity (Deficit)
Investments, fair value disclosure	$ 0	$ 250
Common stock, par value (usd per share)	$ 0.3333	$ 0.3333
Common stock, shares issued (in shares)	2,805,961,317	2,805,961,317
Shares repurchased (in shares)	1,036,080,497	1,020,427,195

XML

Condensed Consolidated Statements of Earnings - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income Statement [Abstract]
Net revenues	$ 6,281	$ 6,550	$ 18,508	$ 18,985
Cost of sales	1,578	1,715	4,693	4,869
Excise taxes on products	1,004	1,138	3,030	3,380
Gross profit	3,699	3,697	10,785	10,736
Marketing, administration and research costs	610	585	2,034	1,635
Operating income	3,089	3,112	8,751	9,101
Interest and other debt expense, net	272	271	758	832
Net periodic benefit income, excluding service cost	(33)	(44)	(95)	(137)
(Income) losses from investments in equity securities	(58)	2,478	(105)	3,707
Loss on Cronos-related financial instruments	0	0	0	14
Earnings before income taxes	2,908	407	8,193	4,685
Provision for income taxes	742	183	2,123	1,611
Net earnings	$ 2,166	$ 224	$ 6,070	$ 3,074
Per share data:
Basic earnings per share (in usd per share)	$ 1.22	$ 0.12	$ 3.40	$ 1.69
Diluted earnings per share (in usd per share)	$ 1.22	$ 0.12	$ 3.40	$ 1.69

XML

Condensed Consolidated Statements of Comprehensive Earnings - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Statement of Comprehensive Income [Abstract]
Net earnings	$ 2,166	$ 224	$ 6,070	$ 3,074
Other comprehensive earnings (losses), net of deferred income taxes:
Benefit plans	(5)	17	(16)	48
ABI	236	(6)	302	637
Currency translation adjustments and other	7	(17)	14	(12)
Other comprehensive earnings (losses), net of deferred income taxes	238	(6)	300	673
Comprehensive earnings	$ 2,404	$ 218	$ 6,370	$ 3,747

XML

Condensed Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) $ in Millions	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Earnings Reinvested in the Business [Member]	Accumulated Other Comprehensive Losses [Member]	Cost of Repurchased Stock [Member]	Non-controlling Interests [Member]
Beginning balance at Dec. 31, 2021	$ (1,606)	$ 935	$ 5,857	$ 30,664	$ (3,056)	$ (36,006)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	3,074			3,074
Other comprehensive earnings (losses), net of deferred income taxes	673				673
Stock award activity	31		16			15
Cash dividends declared	(4,953)			(4,953)
Repurchases of common stock	(1,451)					(1,451)
Ending balance at Sep. 30, 2022	(4,232)	935	5,873	28,785	(2,383)	(37,442)
Beginning balance at Jun. 30, 2022	(2,403)	935	5,861	30,252	(2,377)	(37,074)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	224			224
Other comprehensive earnings (losses), net of deferred income taxes	(6)				(6)
Stock award activity	12		12
Cash dividends declared	(1,691)			(1,691)
Repurchases of common stock	(368)					(368)
Ending balance at Sep. 30, 2022	(4,232)	935	5,873	28,785	(2,383)	(37,442)
Beginning balance at Dec. 31, 2022	(3,923)	935	5,887	29,792	(2,771)	(37,816)	$ 50
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	6,070			6,070
Other comprehensive earnings (losses), net of deferred income taxes	300				300
Stock award activity	28		8			20
Cash dividends declared	(5,095)			(5,095)
Repurchases of common stock	(732)					(732)
Other	(5)					(5)
Ending balance at Sep. 30, 2023	(3,357)	935	5,895	30,767	(2,471)	(38,533)	50
Beginning balance at Jun. 30, 2023	(3,777)	935	5,880	30,340	(2,709)	(38,273)	50
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	2,166			2,166			0
Other comprehensive earnings (losses), net of deferred income taxes	238				238
Stock award activity	15		15
Cash dividends declared	(1,739)			(1,739)
Repurchases of common stock	(260)					(260)
Ending balance at Sep. 30, 2023	$ (3,357)	$ 935	$ 5,895	$ 30,767	$ (2,471)	$ (38,533)	$ 50

XML

Condensed Consolidated Statements of Stockholders' Equity (Deficit) (Parenthetical) - $ / shares	1 Months Ended	3 Months Ended			9 Months Ended
	Aug. 31, 2023	Sep. 30, 2023	Jun. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Statement of Stockholders' Equity [Abstract]
Dividends declared (usd per share)	$ 0.98	$ 0.98	$ 0.94	$ 0.94	$ 2.86	$ 2.74

XML

Condensed Consolidated Statements of Cash Flows $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023 USD ($)		Sep. 30, 2023 USD ($)		Sep. 30, 2022 USD ($)
Cash Provided by (Used in) Operating Activities
Net earnings	$ 2,166		$ 6,070		$ 3,074
Adjustments to reconcile net earnings to operating cash flows:
Depreciation and amortization			194		163
Deferred income tax provision (benefit)			(575)		(550)
Unrecognized tax benefit			1,173	[1]	21
(Income) losses from investments in equity securities	(58)		(105)		3,707
Dividends from ABI			163		104
Loss on Cronos-related financial instruments	0		0		14
Cash effects of changes
Receivables			19	[2]	(5)
Inventories			26	[2]	88
Accounts payable			(47)	[2]	(27)
Income taxes			(210)	[2]	49
Accrued liabilities and other current assets			(210)	[2]	(382)
Accrued settlement charges			(537)	[2]	(618)
Pension plan contributions			(14)		(11)
Pension and postretirement, net			(97)		(110)
Other, net			210		120
Net cash provided by (used in) operating activities			6,060		5,637
Cash Provided by (Used in) Investing Activities
Capital expenditures			(143)		(147)
Proceeds from the sale of IQOS System commercialization rights			1,700		0
Acquisition of NJOY, net of cash acquired			(2,751)		0
Other, net			(23)		(68)
Net cash provided by (used in) investing activities			(1,217)		(215)
Cash Provided by (Used in) Financing Activities
Proceeds from short-term borrowings			2,000		0
Repayment of short-term borrowings			(2,000)		0
Long-term debt repaid			(1,566)		(1,105)
Repurchases of common stock			(732)		(1,451)
Dividends paid on common stock			(5,040)		(4,908)
Other, net			(15)		(12)
Net cash provided by (used in) financing activities			(7,353)		(7,476)
Cash, cash equivalents and restricted cash:
Increase (decrease)			(2,510)		(2,054)
Balance at beginning of period			4,091		4,594
Balance at end of period	1,581		1,581		2,540
Cash and cash equivalents	1,537		1,537
Restricted cash included in other current assets	10	[3]	10	[3]
Restricted cash included in other assets	34	[3]	34	[3]
Cash, cash equivalents and restricted cash	$ 1,581		$ 1,581		$ 2,540

[1] 2023 relates to unrecognized tax benefit from the ordinary loss for cash tax purposes with respect to a portion of our tax basis associated with our former investment in JUUL. For further discussion, see Note 12. Income Taxes.

[2] 2023 amounts are net of the effects from the NJOY Transaction. For further details, see Note 2. Acquisition of NJOY.

[3] Restricted cash consisted primarily of cash deposits collateralizing appeal bonds posted by PM USA to obtain stays of judgments pending appeals. See Note 13. Contingencies.

XML

Background and Basis of Presentation

9 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Background and Basis of Presentation

Background and Basis of Presentation

When used in these notes, the terms “Altria,” “we,” “us” and “our” refer to either (i) Altria Group, Inc. and its consolidated subsidiaries or (ii) Altria Group, Inc. only and not its consolidated subsidiaries, as appropriate in the context.

▪Background: At September 30, 2023, our wholly owned subsidiaries included Philip Morris USA Inc. (“PM USA”), which is engaged in the manufacture and sale of cigarettes in the United States; John Middleton Co. (“Middleton”), which is engaged in the manufacture and sale of machine-made large cigars and pipe tobacco and is a wholly owned subsidiary of PM USA; UST LLC (“UST”), which through its wholly owned subsidiary U.S. Smokeless Tobacco Company LLC (“USSTC”), is engaged in the manufacture and sale of moist smokeless tobacco products (“MST”) and snus products; Helix Innovations LLC (“Helix”), which operates in the United States and Canada, and Helix Innovations GmbH and its affiliates (“Helix ROW”), which operate internationally in the rest-of-world, are engaged in the manufacture and sale of oral nicotine pouches; and NJOY, LLC (“NJOY”), which is engaged in the manufacture and sale of e-vapor products. Other wholly owned subsidiaries included Altria Group Distribution Company (“AGDC”), which provides sales and distribution services to our domestic operating companies; and Altria Client Services LLC (“ALCS”), which provides various support services to our companies in areas such as legal, regulatory, research and product development, consumer engagement, finance, human resources and external affairs. Our access to the operating cash flows of our subsidiaries consists of cash received from the payment of dividends and distributions, and the payment of interest on intercompany loans by our subsidiaries. At September 30, 2023, our significant subsidiaries were not limited by contractual obligations in their ability to pay cash dividends or make other distributions with respect to their equity interests.

As discussed in Note 2. Acquisition of NJOY, on June 1, 2023, we completed our acquisition of NJOY Holdings, Inc. (“NJOY Holdings”), the parent of NJOY. As a result of the acquisition, NJOY became a wholly owned subsidiary of Altria.

At September 30, 2023, we also owned a 75% economic interest in Horizon Innovations LLC (“Horizon”), a joint venture with Japan Tobacco, Inc., which owned the remaining 25% economic interest. Horizon is structured to exist in perpetuity and is responsible for the U.S. marketing and commercialization of heated tobacco stick products.

In March 2023, we entered into a stock transfer agreement with JUUL Labs, Inc. (“Stock Transfer Agreement”) pursuant to which we transferred to JUUL Labs, Inc. (“JUUL”) all of our beneficially owned JUUL equity securities. In exchange, we received a non-exclusive, irrevocable global license to certain of JUUL’s heated tobacco intellectual property (“JUUL Heated Tobacco IP”). Prior to the exchange, we accounted for our investment in JUUL at fair value.

At September 30, 2023, we had investments in Anheuser-Busch InBev SA/NV (“ABI”) and Cronos Group Inc. (“Cronos”), which we account for under the equity method of accounting using a one-quarter lag.

For further discussion of our investments in equity securities, see Note 5. Investments in Equity Securities.

▪Dividends and Share Repurchases: In August 2023, our Board of Directors (“Board of Directors” or “Board”) approved a 4.3% increase in the quarterly dividend rate to $0.98 per share of our common stock versus the previous rate of $0.94 per share. The current annualized dividend rate is $3.92. Future dividend payments remain subject to the discretion of our Board.

In January 2021, our Board of Directors authorized a $2.0 billion share repurchase program that it expanded to $3.5 billion in October 2021 (as expanded, the “January 2021 share repurchase program”). We completed the January 2021 share repurchase program in December 2022.

In January 2023, our Board of Directors authorized a new $1.0 billion share repurchase program (the “January 2023 share repurchase program”). At September 30, 2023, we had $268 million remaining under the January 2023 share repurchase program. The timing of share repurchases under this program depends upon marketplace conditions and other factors, and the program remains subject to the discretion of our Board.

Our share repurchase activity was as follows:

	For the Nine Months Ended September 30,				For the Three Months Ended September 30,
(in millions, except per share data)	2023		2022		2023		2022
Total number of shares repurchased	16.3		29.9		5.9		8.5
Aggregate cost of shares repurchased	$	732	$	1,451	$	260	$	368
Average price per share of shares repurchased	$	44.97	$	48.60	$	44.26	$	43.68

▪Basis of Presentation: Our interim condensed consolidated financial statements are unaudited. Our management believes that all adjustments necessary for a fair statement of the interim results presented have been reflected in our interim condensed consolidated financial statements. All such adjustments were of a normal recurring nature. Net revenues and net earnings for any interim period are not necessarily indicative of results that may be expected for the entire year.

These statements should be read in conjunction with our audited consolidated financial statements and related notes, which appear in our Annual Report on Form 10-K for the year ended December 31, 2022.

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

On January 1, 2023, we adopted Accounting Standards Update (“ASU”) 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU No. 2021-08”). This guidance updates how an entity recognizes and measures contract assets and contract liabilities acquired in a business combination. Our adoption of ASU No. 2021-08 had no impact on our condensed consolidated financial statements or related disclosures.

Additionally, on January 1, 2023, we adopted ASU 2022-04, Liabilities- Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations (“ASU No. 2022-04”). This guidance requires that a buyer in a supplier finance program disclose sufficient qualitative and quantitative information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period and potential magnitude. As of and for the nine months ended September 30, 2023, our adoption of ASU No. 2022-04 had no material impact on our condensed consolidated financial statements or related disclosures.

For a description of issued accounting guidance applicable to, but not yet adopted by, us, see Note 14. New Accounting Guidance Not Yet Adopted.

XML

Acquisition of NJOY

9 Months Ended

Sep. 30, 2023

Business Combination and Asset Acquisition [Abstract]

Acquisition of NJOY

Acquisition of NJOY

On June 1, 2023, we acquired NJOY Holdings (“NJOY Transaction”), which provided us with full global ownership of NJOY’s e-vapor product portfolio, including NJOY ACE, currently the only pod-based e-vapor product with market authorizations from the U.S. Food and Drug Administration (“FDA”). The total consideration for the NJOY Transaction of approximately $2.9 billion, consisted of approximately $2.75 billion in cash payments (net of cash acquired) plus the fair value of up to $500 million in additional cash payments that are contingent on receipt of FDA authorizations with respect to certain NJOY products. The fair value of these contingent payments on the acquisition date, at June 30, 2023 and at September 30, 2023 was approximately $130 million, which is included in the total consideration.

We funded the NJOY Transaction cash payments through a combination of a $2.0 billion term loan facility, the issuance of commercial paper and available cash. For further discussion regarding the term loan facility, see Note 11. Debt.

We accounted for this acquisition as a business combination. NJOY’s financial position and results of operations beginning June 1, 2023 have been consolidated with our consolidated financial results and included in the all other category.

The fair value estimates of the assets acquired and liabilities assumed are preliminary and subject to adjustments during the measurement period (up to one year following the acquisition date). The primary areas of accounting for the NJOY Transaction that are not yet finalized relate to the fair value of certain intangible assets acquired, contingent liabilities, residual goodwill and any related tax impact. During the measurement period, we will adjust preliminary valuations assigned to assets and liabilities if new information is obtained about facts and circumstances that existed as of the NJOY Transaction date, that, if known, would have resulted in revised values for these items as of that date. The impact of all changes, if any, that do not qualify as measurement period adjustments will be included in current period earnings.

The following amounts represent the preliminary estimates for purchase price allocation to assets acquired and liabilities assumed in the NJOY Transaction, which will be finalized by the end of the measurement period:

(in millions)
Cash and cash equivalents	$	22
Receivables	7
Inventories	19
Other assets	7
Property, plant and equipment	16
Other intangible assets:
Developed technology (amortizable)	1,000
Trademarks (amortizable)	230
Supplier agreements (amortizable)	180
Accounts payable	(7)
Accrued liabilities	(20)
Deferred income taxes	(167)
Total identifiable net assets	1,287
Total consideration	2,901
Goodwill	$	1,614

The excess of the total consideration over the identifiable net assets acquired in the NJOY Transaction primarily reflects the value of future growth opportunities in the e-vapor category. None of the goodwill or other intangible assets will be deductible for tax purposes.

The significant assumptions used in determining the preliminary fair values of the identifiable intangible assets included revenue growth rates, operating margins, the assessment of acquired technology life cycles, discount rates, as well as other factors. We determined the preliminary fair values of the identifiable intangibles assets using an income approach. The fair value measurements were primarily based on significant inputs that are not observable in the market, such as discounted cash flow analyses, and thus are classified in Level 3 of the fair value hierarchy. We amortize the intangible assets over a weighted-average period of approximately 17 years.

In determining the estimated fair value of contingent payments, we made certain judgments, estimates and assumptions, the most significant of which was the likelihood of certain potential regulatory outcomes. Contingent payments are classified in Level 3 of the fair value hierarchy.

Costs incurred for the NJOY Transaction have been and will be recognized as expenses in the period in which the costs are incurred. We incurred costs related to the NJOY Transaction of $63 million and $14 million for the nine and three months ended September 30, 2023, respectively. For the nine months ended September 30, 2023, substantially all of these costs were acquisition-related costs, consisting primarily of transaction costs and financing fees, which were included in corporate expense and interest and other debt expense, net, respectively, in our condensed consolidated statement of earnings.

XML

Revenues from Contracts with Customers

9 Months Ended

Sep. 30, 2023

Revenue from Contract with Customer [Abstract]

Revenues from Contracts with Customers

Revenues from Contracts with Customers

We disaggregate net revenues based on product type. For further discussion, see Note 10. Segment Reporting.

We calculate substantially all cash discounts, offered to customers for prompt payment, as a flat rate per unit based on agreed-upon payment terms and record receivables net of the cash discounts on our condensed consolidated balance sheets.

We record payments received by our businesses in advance of product shipment as deferred revenue. These payments are included in other accrued liabilities on our condensed consolidated balance sheets until control of such products is obtained by the customer. Deferred revenue from contracts with customers was $284 million and $252 million at September 30, 2023 and December 31, 2022, respectively. When cash is received in advance of product shipment, our companies satisfy their performance obligations within three days of receiving payment. At September 30, 2023 and December 31, 2022, there were no differences between amounts recorded as deferred revenue from contracts with customers and amounts subsequently recognized as revenue.

Receivables were $57 million and $48 million (excluding the 2022 receivable from the sale of IQOS System commercialization rights) at September 30, 2023 and December 31, 2022, respectively. At September 30, 2023 and December 31, 2022, there were no expected differences between amounts recorded and subsequently received, and we did not record an allowance for credit losses against these receivables.

We record an allowance for returned goods, which is included in other accrued liabilities on our condensed consolidated balance sheets. It is USSTC’s policy to accept authorized sales returns from its customers for products that have passed the freshness date printed on product packaging due to the limited shelf life of USSTC’s MST and snus products. We record estimated sales returns, which are based principally on historical volume and return rates, as a reduction to revenues. Actual sales returns will differ from estimated sales returns to the extent actual results differ from estimated assumptions. We reflect differences between actual and estimated sales returns in the period in which the actual amounts become known. These differences, if any, have not had a material impact on our condensed consolidated financial statements. All returned goods are destroyed upon return and not included in inventory. Consequently, we do not record an asset for USSTC’s right to recover goods from customers upon return.

Sales incentives include variable payments related to goods sold by our businesses. We include estimates of variable consideration as a reduction to revenues upon shipment of goods to customers. The sales incentives that require significant estimates and judgments are as follows:

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

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

These estimates primarily include estimated wholesale to retail sales volume and historical acceptance rates. Actual payments will differ from estimated payments to the extent actual results differ from estimated assumptions. Differences between actual and estimated payments are reflected in the period such information becomes available. These differences, if any, have not had a material impact on our condensed consolidated financial statements.

XML

Goodwill and Other Intangible Assets, net

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets, net

Goodwill and Other Intangible Assets, net

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

	Goodwill				Other Intangible Assets, net
(in millions)	September 30, 2023		December 31, 2022		September 30, 2023		December 31, 2022
Smokeable products segment	$	99	$	99	$	2,970	$	2,989
Oral tobacco products segment	5,078		5,078		9,073		9,097
Other	1,614		—		1,684		298
Total	$	6,791	$	5,177	$	13,727	$	12,384

Other intangible assets consisted of the following:

	September 30, 2023				December 31, 2022
(in millions)	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Indefinite-lived intangible assets	$	11,443	$	—	$	11,443	$	—
Definite-lived intangible assets	2,841		557		1,411		470
Total other intangible assets	$	14,284	$	557	$	12,854	$	470

At September 30, 2023, substantially all of our indefinite-lived intangible assets consisted of our trademarks from our 2009 acquisition of UST ($8.8 billion) and 2007 acquisition of Middleton ($2.6 billion). Definite-lived intangible assets, consisting primarily of intellectual property (which includes developed technology), certain cigarette trademarks, e-vapor trademarks, customer relationships and supplier agreements are amortized over a weighted-average period of approximately 18 years. Pre-tax amortization expense for definite-lived intangible assets was $87 million and $54 million for the nine months ended September 30, 2023 and 2022, respectively, and $42 million and $19 million for the three months ended September 30, 2023 and 2022, respectively. We estimate our annualized amortization expense, which includes the impact of the NJOY Transaction, for each of the next five years to be approximately $170 million, assuming no additional transactions occur that require the amortization of intangible assets.

In July 2023, we received the remaining payment of approximately $1.8 billion (including interest) from Philip Morris International Inc. (“PMI”) as part of the agreement with PMI to, among other things, transition and ultimately conclude our relationship with respect to the IQOS Tobacco Heating System (“IQOS System”) in the United States (“Remaining PMI Payment”). In 2022, we received $1.0 billion from PMI upon entering into the agreement. For the nine and three months ended September 30, 2023, we recorded disposition-related interest income for the Remaining PMI Payment of $54 million and $3 million, respectively, in our condensed consolidated statements of earnings. At September 30, 2023, our condensed

consolidated balance sheet included a pre-tax $2.7 billion deferred gain, which we expect to recognize in earnings when we relinquish our rights to the IQOS System effective April 30, 2024.

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

	For the Nine Months Ended				For the Year Ended
	September 30, 2023				December 31, 2022
(in millions)	Goodwill		Other Intangible Assets, net		Goodwill		Other Intangible Assets, net
Balance at January 1	$	5,177	$	12,384	$	5,177	$	12,306
Changes due to:
Acquisitions (1)	1,614		1,430		—		151
Amortization	—		(87)		—		(73)
Balance at end of period	$	6,791	$	13,727	$	5,177	$	12,384

(1) Substantially all of the 2023 amounts are attributable to the NJOY Transaction. For additional information regarding the NJOY Transaction, see Note 2. Acquisition of NJOY. 2022 amounts attributable to certain intellectual property for other tobacco products.

We conduct a required annual review of goodwill and indefinite-lived intangibles for potential impairment, and more frequently if an event occurs or circumstances change that would require us to perform an interim review. There have been no events or changes in circumstances that indicate an interim impairment review was required as of September 30, 2023. We will perform our annual impairment testing during the fourth quarter of 2023.

XML

Investments in Equity Securities

9 Months Ended

Sep. 30, 2023

Investments [Abstract]

Investments in Equity Securities

Investments in Equity Securities

The carrying amount of our current and former investments consisted of the following:

(in millions)	September 30, 2023		December 31, 2022
ABI	$	9,563	$	8,975
Cronos	344		375
JUUL	—		250
Total	$	9,907	$	9,600

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

	For the Nine Months Ended September 30,						For the Three Months Ended September 30,
(in millions)	2023			2022			2023		2022
ABI (1)	$	(401)		$	2,155		$	(61)	$	2,367
Cronos (1)	46			197			3		11
(Income) losses from investments under equity method of accounting	(355)			2,352			(58)		2,378
JUUL	250		(2)	1,355		(3)	—		100		(3)
(Income) losses from investments in equity securities	$	(105)		$	3,707		$	(58)	$	2,478

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

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

(3) Represents the estimated change in fair value. Prior to the disposition of our JUUL equity securities on March 3, 2023, we accounted for our former investment in JUUL as an investment in an equity security measured at fair value.

Investment in ABI

At September 30, 2023, we had an approximate 10% ownership interest in ABI, consisting of 185 million restricted shares of ABI (the “Restricted Shares”) and 12 million ordinary shares of ABI. The Restricted Shares:

▪are unlisted and not admitted to trading on any stock exchange;

▪are convertible by us into ordinary shares of ABI on a one-for-one basis;

▪rank equally with ordinary shares of ABI with regards to dividends and voting rights; and

▪have director nomination rights with respect to ABI.

We have not elected to convert our Restricted Shares into ordinary shares of ABI.

We account for our investment in ABI under the equity method of accounting because we have the ability to exercise significant influence over the operating and financial policies of ABI, including having active representation on ABI’s board of directors and certain ABI board committees. Through this representation, we participate in ABI’s policy making processes.

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

The fair value of our equity investment in ABI is based on (i) unadjusted quoted prices in active markets for ABI’s ordinary shares and was classified in Level 1 of the fair value hierarchy and (ii) observable inputs other than Level 1 prices, such as quoted prices for similar assets for the Restricted Shares and was classified in Level 2 of the fair value hierarchy. We can convert our Restricted Shares to ordinary shares at our discretion. Therefore, the fair value of each Restricted Share is based on the value of an ordinary share.

The fair value of our equity investment in ABI at September 30, 2023 and December 31, 2022 was $11.0 billion and $11.9 billion, respectively, which exceeded its carrying value of $9.6 billion and $9.0 billion by approximately 15% and 33%, respectively.

At September 30, 2022, the fair value of our equity investment in ABI had declined below its carrying value by $2.5 billion or approximately 22%. We determined the decline in fair value to be other than temporary and recorded a non-cash, pre-tax impairment charge of $2.5 billion for the nine and three months ended September 30, 2022, which was recorded to (income) losses from investments in equity securities in our condensed consolidated statements of earnings.

Investment in Cronos

At September 30, 2023, we had a 41.1% ownership interest in Cronos, consisting of 156.6 million shares, which we account for under the equity method of accounting. We report our share of Cronos’s results using a one-quarter lag because Cronos’s results are not available in time for us to record them in the concurrent period.

The fair value of our equity method investment in Cronos is based on unadjusted quoted prices in active markets for Cronos’s common shares and was classified in Level 1 of the fair value hierarchy. At December 31, 2022, the fair value of our equity method investment in Cronos exceeded its carrying value by $22 million or approximately 6%.

At September 30, 2023, the fair value of our equity method investment in Cronos was less than its carrying value by $31 million or approximately 9%. Based on our evaluation of the duration and magnitude of the fair value decline, our evaluation of Cronos’s financial condition (including its strong cash position) and near-term prospects, and our intent and ability to hold our investment in Cronos until recovery, we concluded that the decline in fair value of our equity method investment in Cronos below its carrying value is temporary and, therefore, no impairment was recorded.

As part of our investment in Cronos, at September 30, 2023, we also owned anti-dilution protections to purchase Cronos common shares, exercisable each quarter upon dilution, to maintain our ownership percentage. Certain of the anti-dilution protections provide us the ability to purchase additional Cronos common shares at a per share exercise price of Canadian dollar (“CAD”) $16.25 upon the occurrence of specified events (“Fixed-price Preemptive Rights”). The Fixed-price Preemptive Rights had no value at September 30, 2023 and December 31, 2022.

Former Investment in JUUL

In March 2023, we entered into the Stock Transfer Agreement with JUUL pursuant to which, among other things, we transferred to JUUL all of our beneficially owned JUUL equity securities. Concurrently with and in connection with the execution of the Stock Transfer Agreement, JUUL entered into an agreement with us that provides us with a non-exclusive, irrevocable global license to certain of the JUUL Heated Tobacco IP. In addition, all other agreements between us, on the one hand, and JUUL, on the other hand, were terminated or we were removed as parties thereto, other than certain litigation-related agreements and a license agreement relating to our non-trademark licensable intellectual property rights in the e-vapor field, which remain in force solely with respect to our e-vapor intellectual property as of or prior to March 3, 2023.

As a result of transferring to JUUL all of our beneficially owned JUUL equity securities pursuant to the Stock Transfer Agreement, for the three months ended March 31, 2023, we recorded a non-cash, pre-tax loss on the disposition of our JUUL equity securities of $250 million. Additionally, we considered specific facts and circumstances around the nature of the JUUL Heated Tobacco IP and determined that the fair value of such intellectual property was not material to our consolidated financial statements as of the date of the transaction. As a result, we did not record an asset associated with this intellectual property on our condensed consolidated balance sheet at March 31, 2023. The primary drivers of this conclusion were (i) our rights to the JUUL Heated Tobacco IP being non-exclusive, (ii) there being no product or technology transferred to us

associated with the JUUL Heated Tobacco IP and (iii) there being no connection between the JUUL Heated Tobacco IP and our current product development plans.

XML

Financial Instruments

9 Months Ended

Sep. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Financial Instruments

Financial Instruments

We enter into derivative financial instruments to mitigate the potential impact of certain market risks, including foreign currency exchange rate risk. We use various types of derivative financial instruments, including forward contracts, options and swaps. We do not enter into or hold derivative financial instruments for trading or speculative purposes.

Our investment in ABI, whose functional currency is the Euro, exposes us to foreign currency exchange risk on the carrying value of our investment. To manage this risk, we may designate certain foreign exchange contracts, including cross-currency swap contracts and forward contracts (collectively, “foreign currency contracts”), and Euro denominated unsecured long-term notes (“foreign currency denominated debt”) as net investment hedges of our investment in ABI.

At September 30, 2023 and December 31, 2022, we had no outstanding foreign currency contracts. When we have foreign currency contracts in effect, counterparties are domestic and international financial institutions. Under these contracts, we are exposed to potential losses in the event of non-performance by these counterparties. We manage our credit risk by entering into transactions with counterparties that have investment grade credit ratings, limiting the amount of exposure we have with each counterparty and monitoring the financial condition of each counterparty. The counterparty agreements contain provisions that require us to maintain an investment grade credit rating. In the event our credit rating falls below investment grade, counterparties to our foreign currency contracts can require us to post collateral.

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

(in millions)	September 30, 2023		December 31, 2022
Carrying value	$	25,098	$	26,680
Fair value	21,325		22,928
Foreign currency denominated debt included in long-term debt:
Carrying value	3,164		4,540
Fair value	2,867		4,165

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

Net Investment Hedging

We recognized changes in the carrying value of the foreign currency denominated debt due to changes in the Euro to U.S. dollar exchange rate in accumulated other comprehensive losses related to ABI.

We recognized pre-tax (gains) of our net investment hedges of $(32) million and $(664) million for the nine months ended September 30, 2023 and 2022, respectively, and $(101) million and $(289) million for the three months ended September 30, 2023 and 2022, respectively, in accumulated other comprehensive losses.

XML

Benefit Plans

9 Months Ended

Sep. 30, 2023

Retirement Benefits [Abstract]

Benefit Plans

Benefit Plans

Components of Net Periodic Benefit Cost (Income)

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

	Pension				Postretirement				Pension				Postretirement
	For the Nine Months Ended September 30,								For the Three Months Ended September 30,
(in millions)	2023		2022		2023		2022		2023		2022		2023		2022
Service cost	$	29	$	48	$	11	$	17	$	9	$	16	$	3	$	7
Interest cost	250		155		49		31		84		51		15		11
Expected return on plan assets	(364)		(370)		(5)		(10)		(121)		(123)		(1)		(4)
Amortization:
Net loss (gain)	3		72		(2)		14		1		24		(2)		6
Prior service cost (credit)	4		5		(30)		(34)		1		2		(10)		(11)
Net periodic benefit cost (income)	$	(78)	$	(90)	$	23	$	18	$	(26)	$	(30)	$	5	$	9

Employer Contributions

We make contributions to our pension plans to the extent that the contributions are tax deductible and pay benefits that relate to plans for salaried employees that cannot be funded under Internal Revenue Service (“IRS”) regulations. We made employer contributions of $14 million to our pension plans and did not make any contributions to our postretirement plans during the nine months ended September 30, 2023. Currently, we anticipate making additional employer contributions of up to approximately $10 million to our pension plans and no contributions to our postretirement plans in 2023. However, the foregoing estimates of 2023 contributions to our pension and postretirement plans are subject to change as a result of changes in tax and other benefit laws, changes in interest rates, as well as asset performance significantly above or below the assumed long-term rate of return for each respective plan.

XML

Earnings per Share

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Earnings per Share

Earnings per Share

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

	For the Nine Months Ended September 30,				For the Three Months Ended September 30,
(in millions)	2023		2022		2023		2022
Net earnings	$	6,070	$	3,074	$	2,166	$	224
Less: Distributed and undistributed earnings attributable to share-based awards	(12)		(9)		(5)		(3)
Earnings for basic and diluted EPS	$	6,058	$	3,065	$	2,161	$	221
Weighted-average shares for basic and diluted EPS	1,780		1,808		1,773		1,799

XML

Other Comprehensive Earnings/Losses

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

Other Comprehensive Earnings/Losses

Other Comprehensive Earnings/Losses

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

	For the Nine Months Ended September 30, 2023
(in millions)	Benefit Plans		ABI			Currency Translation Adjustments and Other		Accumulated Other Comprehensive Losses
Balances, December 31, 2022	$	(1,436)	$	(1,369)		$	34	$	(2,771)
Other comprehensive earnings (losses) before reclassifications	—		388			14		402
Deferred income taxes	—		(82)			—		(82)
Other comprehensive earnings (losses) before reclassifications, net of deferred income taxes	—		306			14		320
Amounts reclassified to net earnings	(21)		(5)			—		(26)
Deferred income taxes	5		1			—		6
Amounts reclassified to net earnings, net of deferred income taxes	(16)		(4)			—		(20)
Other comprehensive earnings (losses), net of deferred income taxes	(16)		302		(1)	14		300
Balances, September 30, 2023	$	(1,452)	$	(1,067)		$	48	$	(2,471)

	For the Three Months Ended September 30, 2023
(in millions)	Benefit Plans		ABI			Currency Translation Adjustments and Other		Accumulated Other Comprehensive Losses
Balances, June 30, 2023	$	(1,447)	$	(1,303)		$	41	$	(2,709)
Other comprehensive earnings (losses) before reclassifications	—		316			7		323
Deferred income taxes	—		(69)			—		(69)
Other comprehensive earnings (losses) before reclassifications, net of deferred income taxes	—		247			7		254
Amounts reclassified to net earnings	(7)		(14)			—		(21)
Deferred income taxes	2		3			—		5
Amounts reclassified to net earnings, net of deferred income taxes	(5)		(11)			—		(16)
Other comprehensive earnings (losses), net of deferred income taxes	(5)		236		(1)	7		238
Balances, September 30, 2023	$	(1,452)	$	(1,067)		$	48	$	(2,471)

	For the Nine Months Ended September 30, 2022
(in millions)	Benefit Plans		ABI			Currency Translation Adjustments and Other		Accumulated Other Comprehensive Losses
Balances, December 31, 2021	$	(1,612)	$	(1,512)		$	68	$	(3,056)
Other comprehensive earnings (losses) before reclassifications	—		902			(11)		891
Deferred income taxes	—		(206)			—		(206)
Other comprehensive earnings (losses) before reclassifications, net of deferred income taxes	—		696			(11)		685
Amounts reclassified to net earnings	65		(74)			(1)		(10)
Deferred income taxes	(17)		15			—		(2)
Amounts reclassified to net earnings, net of deferred income taxes	48		(59)			(1)		(12)
Other comprehensive earnings (losses), net of deferred income taxes	48		637		(1)	(12)		673
Balances, September 30, 2022	$	(1,564)	$	(875)		$	56	$	(2,383)

	For the Three Months Ended September 30, 2022
(in millions)	Benefit Plans		ABI			Currency Translation Adjustments and Other		Accumulated Other Comprehensive Losses
Balances, June 30, 2022	$	(1,581)	$	(869)		$	73	$	(2,377)
Other comprehensive earnings (losses) before reclassifications	—		18			(16)		2
Deferred income taxes	—		(11)			—		(11)
Other comprehensive earnings (losses) before reclassifications, net of deferred income taxes	—		7			(16)		(9)
Amounts reclassified to net earnings	24		(16)			(1)		7
Deferred income taxes	(7)		3			—		(4)
Amounts reclassified to net earnings, net of deferred income taxes	17		(13)			(1)		3
Other comprehensive earnings (losses), net of deferred income taxes	17		(6)		(1)	(17)		(6)
Balances, September 30, 2022	$	(1,564)	$	(875)		$	56	$	(2,383)

(1) Primarily reflects our share of ABI’s currency translation adjustments and the impact of our designated net investment hedges related to our equity investment in ABI. For further discussion of designated net investment hedges, see Note 6. Financial Instruments.

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

	For the Nine Months Ended September 30,				For the Three Months Ended September 30,
(in millions)	2023		2022		2023		2022
Benefit Plans: (1)
Net loss	$	5	$	94	$	2	$	33
Prior service cost/credit	(26)		(29)		(9)		(9)
	(21)		65		(7)		24
ABI (2)	(5)		(74)		(14)		(16)
Currency Translation Adjustments (2)	—		(1)		—		(1)
Pre-tax amounts reclassified from accumulated other comprehensive losses to net earnings	$	(26)	$	(10)	$	(21)	$	7

(1) Amounts are included in net defined benefit plan costs. For further details, see Note 7. Benefit Plans.

(2) Amounts are included in (income) losses from investments in equity securities. For further information, see Note 5. Investments in Equity Securities.

XML

Segment Reporting

9 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

At September 30, 2023 our reportable segments were smokeable products and oral tobacco products, which include (i) smokeable tobacco products, consisting of combustible cigarettes manufactured and sold by PM USA, and machine-made large cigars and pipe tobacco manufactured and sold by Middleton; and (ii) oral tobacco products, consisting of MST and snus products manufactured and sold by USSTC, and oral nicotine pouches manufactured and sold by Helix.

The all other category included (i) the financial results of NJOY (beginning June 1, 2023); (ii) Helix ROW; (iii) our former financial services business, which completed the wind-down of its portfolio of finance assets in 2022; and (iv) the IQOS System heated tobacco business.

Our chief operating decision maker (“CODM”) reviews operating companies income (loss) (“OCI”) to evaluate the performance of, and allocate resources to, our segments. OCI for our segments is defined as operating income before general corporate expenses and amortization of intangibles. Interest and other debt expense, net, along with net periodic benefit income, excluding service cost, and provision for income taxes are centrally managed at the corporate level and, accordingly, such items are not presented by segment since they are excluded from the measure of segment profitability reviewed by our CODM.

Segment data were as follows:

	For the Nine Months Ended September 30,				For the Three Months Ended September 30,
(in millions)	2023		2022		2023		2022
Net revenues:
Smokeable products	$	16,482	$	17,020	$	5,572	$	5,882
Oral tobacco products	1,993		1,948		685		670
All other	33		17		24		(2)
Net revenues	$	18,508	$	18,985	$	6,281	$	6,550
Earnings before income taxes:
OCI:
Smokeable products	$	8,092	$	8,112	$	2,743	$	2,791
Oral tobacco products	1,314		1,262		455		425
All other	(17)		(27)		(4)		(7)
Amortization of intangibles	(87)		(54)		(42)		(19)
General corporate expenses	(551)		(192)		(63)		(78)
Operating income	8,751		9,101		3,089		3,112
Interest and other debt expense, net	758		832		272		271
Net periodic benefit income, excluding service cost	(95)		(137)		(33)		(44)
(Income) losses from investments in equity securities	(105)		3,707		(58)		2,478
Loss on Cronos-related financial instruments	—		14		—		—
Earnings before income taxes	$	8,193	$	4,685	$	2,908	$	407

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

▪Non-Participating Manufacturer (“NPM”) Adjustment Items: We recorded pre-tax income for NPM adjustment items of $15 million for the nine and three months ended September 30, 2023 and $60 million for the nine months ended September 30, 2022 in our smokeable products segment. We recorded these items as reductions to cost of sales in our condensed consolidated statements of earnings, which resulted in increased OCI in our smokeable products segment. NPM adjustment items result from the resolutions of certain disputes with states and territories related to the NPM adjustment provision under the Master Settlement Agreement (“NPM Adjustment Items”). For additional information, see Health Care Cost Recovery Litigation in Note 13. Contingencies.

▪Tobacco and Health and Certain Other Litigation Items: We recorded pre-tax charges related to tobacco and health and certain other litigation items as follows:

	For the Nine Months Ended September 30,				For the Three Months Ended September 30,
(in millions)	2023		2022		2023		2022
Smokeable products segment	$	65	$	71	$	13	$	21
General corporate expenses	348		27		10		20
Interest and other debt expense, net	11		3		—		2
Total	$	424	$	101	$	23	$	43

We recorded the amounts shown in the table above for the smokeable products segment and general corporate expenses in marketing, administration and research costs in our condensed consolidated statements of earnings. For further discussion, see Note 13. Contingencies.

XML

Debt

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Debt

Debt

Short-term Borrowings and Borrowing Arrangements

At September 30, 2023 and December 31, 2022, we had no short-term borrowings.

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

the term loan facility in full. For additional information regarding the NJOY Transaction and the Remaining PMI Payment, see Note 2. Acquisition of NJOY and Note 4. Goodwill and Other Intangible Assets, net, respectively.

At September 30, 2023, we had a $3.0 billion senior unsecured 5-year revolving credit agreement (as amended, the “Prior Credit Agreement”), which we used for general corporate purposes and was scheduled to expire on August 1, 2025.

At September 30, 2023, we had availability under the Prior Credit Agreement for borrowings of up to an aggregate principal amount of $3.0 billion and the applicable percentage for borrowings under the Prior Credit Agreement at that date was 1.0% based on our long-term senior unsecured debt ratings on that date. At September 30, 2023, we were in compliance with our covenants in the Prior Credit Agreement.

On October 24, 2023, we entered into a new senior unsecured 5-year revolving credit agreement (the “New Credit Agreement”) and terminated the Prior Credit Agreement. The terms of the New Credit Agreement are substantially similar to those of the Prior Credit Agreement.

The New Credit Agreement provides for borrowings up to an aggregate principal amount of $3.0 billion, expires on October 24, 2028 and includes an option, subject to certain conditions, for us to extend the New Credit Agreement for two additional one-year periods. We intend to use borrowings under the New Credit Agreement for general corporate purposes.

Pricing for interest and fees under the New Credit Agreement may be modified in the event of a change in the rating of our long-term senior unsecured debt. We expect interest rates on borrowings under the New Credit Agreement to be based on the Term Secured Overnight Financing Rate plus a percentage based on the higher of the ratings of our long-term senior unsecured debt from Moody’s Investors Service, Inc. and Standard & Poor’s Financial Services LLC. The New Credit Agreement does not include any other rating triggers or any provisions that could require the posting of collateral.

The New Credit Agreement includes various covenants, one of which requires us to maintain a ratio of consolidated earnings before interest, taxes, depreciation and amortization (“EBITDA”) to Consolidated Interest Expense of not less than 4.0 to 1.0, calculated as of the end of the applicable quarter on a rolling four quarters basis. The terms “Consolidated EBITDA” and “Consolidated Interest Expense,” each as defined in the New Credit Agreement, include certain adjustments.

Any commercial paper issued by us and any borrowings under the New Credit Agreement are guaranteed by PM USA.

Long-term Debt

The aggregate carrying value of our total long-term debt at September 30, 2023 and December 31, 2022 was $25.1 billion and $26.7 billion, respectively.

In May 2023, we repaid in full our 2.950% senior unsecured notes in the aggregate principal amount of $218 million at maturity. In addition, during the first quarter of 2023, we repaid in full our 1.000% senior unsecured Euro notes in the aggregate principal amount of $1.3 billion (€1.25 billion) at maturity.

At September 30, 2023 and December 31, 2022, accrued interest on our total debt of $190 million and $411 million, respectively, was included in other accrued liabilities on our condensed consolidated balance sheets.

For a discussion of the fair value of our long-term debt and the designation of our Euro denominated senior unsecured notes as a net investment hedge of our investment in ABI, see Note 6. Financial Instruments.

XML

Income Taxes

9 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

In August 2022, the U.S. Government enacted legislation commonly referred to as the Inflation Reduction Act that became effective January 1, 2023. The main provisions of the Inflation Reduction Act that impact us are: (i) a 15% corporate alternative minimum tax (“Corporate AMT”) and (ii) a 1% excise tax on share repurchases, which is recorded in equity on our consolidated statements of stockholders’ equity (deficit).

We are considered an “applicable corporation” for purposes of Corporate AMT. We expect our regular federal income tax liability will generally exceed our Corporate AMT liability; however, certain unique circumstances may result in our Corporate AMT liability exceeding our regular federal income tax liability, including when tax losses are reported in a different year than book losses.

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

	For the Nine Months Ended September 30,						For the Three Months Ended September 30,
(in millions)	2023			2022			2023			2022
Earnings before income taxes	$	8,193		$	4,685		$	2,908		$	407
Provision for income taxes	2,123			1,611			742			183
Income tax rate	25.9		%	34.4		%	25.5		%	45.0		%

Our income tax rate for the nine months ended September 30, 2023 differs from the U.S. federal statutory rate of 21%, due primarily to state tax expense and a valuation allowance recorded against a deferred tax asset related to the disposition of our former investment in JUUL. Our income tax rate for the three months ended September 30, 2023 differs from the U.S. federal statutory rate of 21%, due primarily to state tax expense.

Our income tax rates for the nine and three months ended September 30, 2022 differ from the U.S. federal statutory rate of 21%, due primarily to state tax expense, including the state tax treatment of the impairment charge on our equity investment in ABI, and a valuation allowance recorded against a deferred tax asset related to the decrease in the estimated fair value of our former investment in JUUL, partially offset by the release of a valuation allowance related to our Cronos warrant and tax accruals no longer required.

We are subject to income taxation in many jurisdictions. Unrecognized tax benefits reflect the differences between tax positions we have taken or expect to take on income tax returns and the amounts recognized in the financial statements. Resolution of the related tax positions with the relevant tax authorities may take many years to complete, and such timing is not entirely within our control.

For the year ending December 31, 2023, we expect to recognize an approximate $6.5 billion ordinary loss for cash tax purposes with respect to a portion of our tax basis associated with our former investment in JUUL. For financial statement purposes, we expect to fully reserve for the tax benefit associated with this ordinary loss by recording an unrecognized tax benefit of approximately $1.6 billion in 2023 on a pro-rata basis, pending the IRS’s review of our tax position. For the nine months ended September 30, 2023, we recognized a pro-rata portion of this ordinary loss, which resulted in a tax benefit of $1,141 million and a reduction to our current income taxes payable. For the nine months ended September 30, 2023, we also recognized a $1,173 million increase in a long-term liability for unrecognized tax benefits related to this tax position, partially offset by a $32 million deferred federal benefit for state taxes. There was no impact to our condensed consolidated statement of earnings for the nine and three months ended September 30, 2023. For further discussion of our former investment in JUUL, see Note 5. Investments in Equity Securities.

At September 30, 2023, our total unrecognized tax benefits were $1,233 million. The amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate at September 30, 2023, was $35 million, along with $1,198 million affecting deferred taxes. The amount of unrecognized tax benefit that, if recognized, would impact the effective tax rate at December 31, 2022, was $44 million, along with $25 million affecting deferred taxes. Unrecognized tax benefits increased by $1,164 million from December 31, 2022 due primarily to the tax position established with respect to the character of losses from our former investment in JUUL as discussed above.

As a result of the recognition of the approximate $6.5 billion ordinary loss for cash tax purposes discussed above, we expect to be subject to Corporate AMT in 2023.

The following chart provides a reconciliation of the beginning and ending valuation allowances for the nine months ended September 30, 2023:

(in millions)
Balance at beginning of year	$	2,800
Additions to valuation allowance charged to income tax expense	76
Releases to valuation allowance credited to income tax benefit	(6)
Foreign currency translation	(2)
Additions to valuation allowance due to NJOY Transaction (no impact to earnings)	12
Reductions to valuation allowance offset to deferred tax asset (no impact to earnings)	(663)
Balance at end of period	$	2,217

We determine deferred tax assets and liabilities based on the differences between the financial statement and tax bases of assets and liabilities, using enacted tax rates in effect for the year in which the differences are expected to reverse. We record a valuation allowance when it is more likely than not that some portion or all of a deferred tax asset will not be realized. We determine the realizability of deferred tax assets based on the weight of all available positive and negative evidence. In reaching this determination, we consider the character of the assets and the possible sources of taxable income of the appropriate character within the available carryback and carryforward periods available under the tax law.

For the nine months ended September 30, 2023, we reduced the deferred tax asset and corresponding valuation allowance for the portion of our JUUL capital losses that is now part of our tax basis in the shares of a foreign subsidiary. This outside basis difference of the foreign subsidiary is not recognized as a deferred tax asset since we do not expect the temporary difference to reverse in the foreseeable future. The cumulative valuation allowance at September 30, 2023 was primarily attributable to

deferred tax assets recorded in connection with the portion of our JUUL capital losses that is now included in our tax basis in the shares of a domestic subsidiary and our investment in Cronos.

XML

Contingencies

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Contingencies

Contingencies

Legal proceedings covering a wide range of matters are pending or threatened in various United States and foreign jurisdictions against Altria and certain of our subsidiaries, including PM USA and USSTC, as well as our indemnitees. Various types of claims may be raised in these proceedings, including product liability, unfair trade practices, antitrust, income tax liability, contraband shipments, patent infringement, employment matters, claims alleging violation of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), claims for contribution and claims of competitors, shareholders or distributors. Legislative action, such as changes to tort law, also may expand the types of claims and remedies available to plaintiffs.

Litigation is subject to uncertainty and it is possible that there could be adverse developments in pending or future cases. An unfavorable outcome or settlement of pending tobacco-related or other litigation could encourage the commencement of additional litigation. Damages claimed in some tobacco-related and other litigation are or can be significant and, in certain cases, have ranged in the billions of dollars. The variability in pleadings in multiple jurisdictions, together with the actual experience of management in litigating claims, demonstrates that the monetary relief that may be specified in a lawsuit bears little relevance to the ultimate outcome. In certain cases, plaintiffs claim that defendants’ liability is joint and several. In such cases, we may face the risk that one or more co-defendants decline or otherwise fail to participate in the bonding required for an appeal or to pay their proportionate or jury-allocated share of a judgment. As a result, under certain circumstances, we may have to pay more than our proportionate share of any bonding- or judgment-related amounts. Furthermore, in those cases where plaintiffs are successful, we also may be required to pay interest and attorneys’ fees.

Although PM USA has historically been able to obtain required bonds or relief from bonding requirements in order to prevent plaintiffs from seeking to collect judgments while adverse verdicts have been appealed, there remains a risk that such relief may not be obtainable in all cases. This risk has been substantially reduced given that 47 states and Puerto Rico limit the dollar amount of bonds or require no bond at all. As discussed below, however, tobacco litigation plaintiffs have challenged the constitutionality of Florida’s bond cap statute in several cases and plaintiffs may challenge state bond cap statutes in other jurisdictions as well. Such challenges may include the applicability of state bond caps in federal court. States, including Florida, also may seek to repeal or alter bond cap statutes through legislation. Although we cannot predict the outcome of such challenges, it is possible that our condensed consolidated results of operations, cash flows or financial position could be materially affected in a particular fiscal quarter or fiscal year by an unfavorable outcome of one or more such challenges.

We record provisions in our condensed consolidated financial statements for pending litigation when we determine that an unfavorable outcome is probable and the amount of the loss can be reasonably estimated. At the present time, while it is reasonably possible that an unfavorable outcome in a case may occur, except to the extent discussed elsewhere in this Note 13. Contingencies: (i) management has concluded that it is not probable that a loss has been incurred in any of the pending cases; (ii) management is unable to estimate the possible loss or range of loss that could result from an unfavorable outcome in any of the pending cases; and (iii) accordingly, management has not provided any amounts in our condensed consolidated financial statements for unfavorable outcomes, if any. Litigation defense costs are expensed as incurred.

We have achieved substantial success in managing litigation. Nevertheless, litigation is subject to uncertainty and significant challenges remain. It is possible that our condensed consolidated results of operations, cash flows or financial position could be materially affected in a particular fiscal quarter or fiscal year by an unfavorable outcome or settlement of certain pending litigation. We believe, and have been so advised by counsel handling the respective cases, that we have valid defenses to the litigation pending against us, as well as valid bases for appeal of adverse verdicts. We have defended, and will continue to defend, vigorously against litigation challenges. However, we may enter into settlement discussions in particular cases if we believe it is in our best interests to do so.

Judgments Paid and Provisions for Tobacco and Health (Including Engle Progeny Litigation) and Certain Other Litigation Items: The changes in our accrued liability for tobacco and health and certain other litigation items, including related interest costs, for the periods specified below are as follows:

	For the Nine Months Ended September 30,				For the Three Months Ended September 30,
(in millions)	2023		2022		2023		2022
Accrued liability for tobacco and health and certain other litigation items at beginning of period	$	71	$	91	$	381	$	25
Pre-tax charges for:
Tobacco and health and certain other litigation (1)	75		71		23		21
Shareholder derivative lawsuits (2)	98		27		—		20
JUUL-related settlements (3)	240		—		—		—
Related interest costs	11		3		—		2
Payments	(122)		(137)		(31)		(13)
Accrued liability for tobacco and health and certain other litigation items at end of period	$	373	$	55	$	373	$	55

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

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

(3) Includes the settlement of certain e-vapor product litigation relating to JUUL e-vapor products and the e-vapor product litigation brought by the Minnesota attorney general. See E-vapor Product Litigation below for a discussion of these settlements.

The accrued liability for tobacco and health and certain other litigation items, including related interest costs, was included in accrued liabilities and other liabilities on our condensed consolidated balance sheets. Pre-tax charges for tobacco and health and certain other litigation were included in marketing, administration and research costs on our condensed consolidated statements of earnings. Pre-tax charges for related interest costs were included in interest and other debt expense, net on our condensed consolidated statements of earnings.

After exhausting all appeals in those cases resulting in adverse verdicts associated with tobacco-related litigation, since October 2004, PM USA has paid judgments and settlements (including related costs and fees) totaling approximately $1 billion and interest totaling approximately $241 million as of September 30, 2023. These amounts include payments for Engle progeny judgments (and related costs and fees) totaling approximately $439 million and related interest totaling approximately $60 million.

Security for Judgments: To obtain stays of judgments pending appeal, PM USA has posted various forms of security. As of September 30, 2023, PM USA has posted appeal bonds totaling approximately $34 million, which have been collateralized with restricted cash and are included in assets on our condensed consolidated balance sheets.

Overview of Tobacco-Related Litigation

Types and Number of U.S. Cases: Claims related to tobacco products generally fall within the following categories: (i) smoking and health cases alleging personal injury brought on behalf of individual plaintiffs; (ii) health care cost recovery cases brought by governmental (both domestic and foreign) plaintiffs seeking reimbursement for health care expenditures allegedly caused by cigarette smoking and/or disgorgement of profits; (iii) e-vapor cases alleging violation of RICO, fraud, failure to warn, design defect, negligence, antitrust, patent infringement and unfair trade practices; and (iv) other tobacco-related litigation described below. Plaintiffs’ theories of recovery and the defenses raised in tobacco-related litigation are discussed below.

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

	October 23, 2023	October 24, 2022	October 25, 2021
Individual Smoking and Health Cases (1)	167	161	179
Health Care Cost Recovery Actions (2)	1	1	1
E-vapor Cases (3)	5,177	4,351	2,951
Other Tobacco-Related Cases (4)	3	3	3

(1) Includes as of October 23, 2023, 15 cases filed in Illinois, 17 cases filed in New Mexico, 53 cases filed in Massachusetts and 46 non-Engle cases filed in Florida. Does not include individual smoking and health cases brought by or on behalf of plaintiffs in Florida state and federal courts following the decertification of the Engle class (these Engle progeny cases are discussed below in Smoking and Health Litigation - Engle Class Action). Also does not include 1,386 cases brought by flight attendants seeking compensatory damages for personal injuries allegedly caused by exposure to environmental tobacco smoke (“ETS”). The flight attendants allege that they are members of an ETS smoking and health class action in Florida, which was settled in 1997 (Broin). The terms of the court-approved settlement in that case allowed class members to file individual lawsuits seeking compensatory damages but prohibited them from seeking punitive damages. Class members were prohibited from filing individual lawsuits after 2000 under the court-approved settlement.

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

(3) Includes as of October 23, 2023, 57 class action lawsuits, 3,614 individual lawsuits and 1,506 “third party” lawsuits relating to the Multidistrict Litigation discussed under E-vapor Product Litigation below. The 57 class action lawsuits include 32 cases in the Northern District of California involving plaintiffs whose claims were previously included in other class action complaints but were refiled as separate stand-alone class actions for procedural and other reasons. In May 2023, we reached agreement on terms to resolve the majority of the Multidistrict Litigation lawsuits. Also includes three patent infringement lawsuits filed against us and certain of our affiliates. For further discussion of the pending Multidistrict Litigation settlement and patent infringement litigation, see E-vapor Product Litigation below.

(4) Includes as of October 23, 2023, one inactive smoking and health case alleging personal injury and purporting to be brought on behalf of a class of individual plaintiffs and two inactive class action lawsuits alleging that use of the terms “Lights” and “Ultra Lights” constitute deceptive and unfair trade practices, common law or statutory fraud, unjust enrichment, breach of warranty or violations of RICO.

International Tobacco-Related Cases: As of October 23, 2023, (i) Altria is named as a defendant in three e-vapor class action lawsuits in Canada; (ii) PM USA is a named defendant in 10 health care cost recovery actions in Canada, eight of which also name Altria as a defendant; and (iii) PM USA and Altria are named as defendants in seven smoking and health class actions filed in various Canadian provinces. See Guarantees and Other Similar Matters below for a discussion of the Distribution Agreement (defined below) between Altria and PMI that provides for indemnities for certain liabilities concerning tobacco products.

Tobacco-Related Cases Set for Trial: As of October 23, 2023, two Engle progeny cases, one individual smoking and health case and no e-vapor cases are set for trial through December 31, 2023. Trial dates are subject to change.

Trial Results: Since January 1999, excluding the Engle progeny cases (separately discussed below), verdicts have been returned in 78 tobacco-related cases in which PM USA was a defendant. Verdicts in favor of PM USA and other defendants were returned in 48 of the 78 cases. These 48 cases were tried in Alaska (1), California (7), Connecticut (1), Florida (10), Louisiana (1), Massachusetts (6), Mississippi (1), Missouri (4), New Hampshire (1), New Mexico (2), New Jersey (1), New York (5), Ohio (2), Pennsylvania (2), Rhode Island (1), Tennessee (2) and West Virginia (2). One case in Massachusetts, Main, where the verdict was initially returned in favor of PM USA, was reversed on appeal and remanded for a new trial.

Of the 30 non-Engle progeny cases in which verdicts were returned in favor of plaintiffs, 26 have reached final resolution.

See Smoking and Health Litigation - Engle Progeny Trial Results below for a discussion of verdicts in state and federal Engle progeny cases involving PM USA as of October 23, 2023.

Smoking and Health Litigation

Overview: Plaintiffs’ allegations of liability in smoking and health cases are based on various theories of recovery, including negligence, gross negligence, strict liability, fraud, misrepresentation, design defect, failure to warn, nuisance, breach of express and implied warranties, breach of special duty, conspiracy, concert of action, violations of unfair trade practice laws and consumer protection statutes and claims under the federal and state anti-racketeering statutes. Plaintiffs in the smoking and health cases seek various forms of relief, including compensatory and punitive damages, treble/multiple damages and other statutory damages and penalties, creation of medical monitoring and smoking cessation funds, disgorgement of profits, and injunctive and equitable relief. Defenses raised in these cases include lack of proximate cause, assumption of the risk, comparative fault and/or contributory negligence, statutes of limitations and preemption by the Federal Cigarette Labeling and Advertising Act.

Non-Engle Progeny Litigation: Summarized below are the non-Engle progeny smoking and health cases pending during 2023 (or recently concluded) in which a verdict was returned in favor of plaintiff and against PM USA. Charts listing certain verdicts for plaintiffs in the Engle progeny cases can be found in Smoking and Health Litigation - Engle Progeny Trial Results below.

Ricapor-Hall: In August 2023, a jury in a Hawaii state court returned a verdict in favor of plaintiff and against PM USA, awarding $6 million in compensatory damages, which we expect to be reduced to $3 million based on the jury’s finding on comparative fault and a set-off against plaintiff’s settlements with other defendants, and $8 million in punitive damages. We will file post-trial motions challenging the verdict and will, if necessary, appeal.

Deswert: In May 2023, a jury in a Pennsylvania state court returned a verdict in favor of plaintiff and against PM USA, awarding less than $1 million in compensatory damages and allocating 50% of the fault to PM USA. Despite the comparative fault finding, the compensatory damages award would not have been reduced due to the jury’s finding for plaintiff on the strict liability claim. Plaintiff’s claim for punitive damages was dismissed prior to the trial. In lieu of appealing the trial court’s verdict, PM USA settled plaintiff’s claims in July 2023 and recorded a pre-tax charge of less than $1 million in the third quarter of 2023.

Woodley: In February 2023, a jury in a Massachusetts state court returned a verdict in favor of plaintiff and against PM USA, awarding $5 million in compensatory damages. There was no claim for punitive damages. Following the denial of PM USA’s post-trial motions, PM USA appealed the judgment to the Appeals Court of Massachusetts, and the appeal remains pending.

Fontaine: In September 2022, a jury in a Massachusetts state court returned a verdict in favor of plaintiff and against PM USA, awarding approximately $8 million in compensatory damages and $1 billion in punitive damages. In September 2023, the court denied PM USA’s motion for a new trial and partially granted PM USA’s motion for remittitur, reducing the punitive damages award to $56 million. PM USA will file post-trial motions for judgment notwithstanding the verdict and will, if necessary, appeal.

Greene: In September 2019, a jury in a Massachusetts state court returned a verdict in favor of plaintiffs and against PM USA, awarding approximately $10 million in compensatory damages. In May 2020, the court ruled on plaintiffs’ remaining claim and trebled the compensatory damages award to approximately $30 million. In February 2021, the trial court awarded plaintiffs attorneys’ fees and costs in the amount of approximately $2.3 million. PM USA appealed the judgment, and, in May 2023, the Massachusetts Supreme Judicial Court affirmed the trial court judgment and orders denying PM USA’s post-trial motions, concluding the case. We recorded a pre-tax charge of approximately $48 million and paid the recorded amount in the second quarter of 2023.

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

Engle Class Action: In July 2000, in the second phase of the Engle smoking and health class action in Florida, a jury returned a verdict assessing punitive damages totaling approximately $145 billion against various defendants, including $74 billion against PM USA. Following entry of judgment, PM USA appealed. In May 2003, the Florida Third District Court of Appeal reversed the judgment entered by the trial court and instructed the trial court to order the decertification of the class. Plaintiffs petitioned the Florida Supreme Court for further review.

In July 2006, the Florida Supreme Court ordered that the punitive damages award be vacated, that the class approved by the trial court be decertified and that members of the decertified class could file individual actions against defendants within one year of issuance of the mandate. The court further declared the following Phase I findings are entitled to res judicata effect in such individual actions brought within one year of the issuance of the mandate: (i) that smoking causes various diseases; (ii) that nicotine in cigarettes is addictive; (iii) that defendants’ cigarettes were defective and unreasonably dangerous; (iv) that defendants concealed or omitted material information not otherwise known or available knowing that the material was false or misleading or failed to disclose a material fact concerning the health effects or addictive nature of smoking; (v) that defendants agreed to misrepresent information regarding the health effects or addictive nature of cigarettes with the intention of causing the public to rely on this information to their detriment; (vi) that defendants agreed to conceal or omit information regarding the health effects of cigarettes or their addictive nature with the intention that smokers would rely on the information to their detriment; (vii) that all defendants sold or supplied cigarettes that were defective; and (viii) that defendants were negligent.

In August 2006, PM USA and plaintiffs sought rehearing from the Florida Supreme Court on parts of its July 2006 opinion. In December 2006, the Florida Supreme Court refused to revise its July 2006 ruling, except that it revised the set of Phase I findings entitled to res judicata effect by excluding finding (v) listed above (relating to agreement to misrepresent information), and added the finding that defendants sold or supplied cigarettes that, at the time of sale or supply, did not conform to the representations of fact made by defendants. In February 2008, the trial court decertified the class.

Pending Engle Progeny Cases: The deadline for filing Engle progeny cases expired in January 2008, at which point a total of approximately 9,300 federal and state claims were pending. As of October 23, 2023, approximately 381 state court cases were pending against PM USA or Altria asserting individual claims by or on behalf of approximately 484 state court plaintiffs.

Because of a number of factors, including docketing delays, duplicated filings and overlapping dismissal orders, these numbers are estimates. The 2015 federal Engle agreement resolved nearly all Engle progeny cases pending in federal court as of the date of the agreement, and each case excluded from that agreement subsequently has been resolved.

Engle Progeny Trial Results: As of October 23, 2023, 144 federal and state Engle progeny cases involving PM USA have resulted in verdicts since the Florida Supreme Court Engle decision. Eighty verdicts were returned in favor of plaintiffs, and four verdicts (Calloway, Oshinsky-Blacker, McCoy and Mahfuz) that were initially returned in favor of plaintiffs were reversed post-trial or on appeal and remain pending. In Kaplan (McLaughlin), the punitive damages award was vacated on appeal and remanded for a new trial. In Sommers, plaintiff appealed a jury verdict awarding only compensatory damages. The Third District Court of Appeal affirmed the award and remanded for a new trial on entitlement to punitive damages and amount. On remand, the trial court granted PM USA’s motion for summary judgment and entered final judgment dismissing the plaintiff’s punitive damages claim with prejudice, and plaintiff has appealed.

Fifty-eight verdicts were returned in favor of PM USA, of which 48 were state cases. In addition, there have been a number of mistrials, only some of which have resulted in new trials as of October 23, 2023. The jury in one case, Garcia, awarded plaintiff compensatory damages and found plaintiff was entitled to punitive damages; however, the court declared a mistrial in the second phase of the trial regarding punitive damages because the jury was unable to determine the amount of the punitive damages. Following appeals by the plaintiff and PM USA, the appellate court in Garcia affirmed the compensatory damages judgment against PM USA and granted a new trial with respect to punitive damages. The plaintiff in Garcia subsequently filed a motion to voluntarily dismiss the punitive damages claim and to enter final judgment on the compensatory damages claim, which the court granted. PM USA’s appeal of the final judgment is pending. Two verdicts (Cohen and Collar) that were returned in favor of PM USA were subsequently reversed for new trials. Juries in two cases (Reider and Banks) returned zero damages verdicts in favor of PM USA. Juries in two other cases (Weingart and Hancock) returned verdicts against PM USA awarding no damages, but the trial court in each case decided to award plaintiffs damages. Two cases, Pollari and Neff, resulted in verdicts in favor of PM USA following a retrial of initial verdicts returned in favor of plaintiffs. In Pollari, plaintiff and defendants appealed the verdict and the appellate court affirmed the judgment in favor of the defendants. In Neff, the trial court denied plaintiff’s motion for a new trial, and plaintiff filed a notice of appeal. Two cases, Rintoul (Caprio) and Duignan, resulted in verdicts in favor of plaintiffs following retrial of initial verdicts returned in favor of plaintiffs. In Duignan, plaintiff’s motion for reconsideration with respect to the appellate court’s decision to vacate the punitive damages judgment, direct the trial court to apply the jury’s comparative fault assessments to the compensatory damages verdict and order the trial court to set aside the jury’s findings on plaintiff’s fraud claims was denied. The verdict in the retrial in Rintoul (Caprio) was reversed upon appeal and remanded for a new trial. Two cases, Freeman and Harris, resulted in an appellate reversal of a jury verdict in favor of plaintiff, and a judgment in favor of PM USA. One case, R. Douglas, was dismissed with prejudice following a verdict in favor of plaintiff.

The charts below list the verdicts and post-trial developments in certain Engle progeny cases in which verdicts were returned in favor of plaintiffs. The first chart lists cases that are pending as of October 23, 2023 where PM USA has determined an unfavorable outcome is not probable and the amount of loss cannot be reasonably estimated, and the second chart lists cases that have concluded in the past 12 months. Unless otherwise noted for a particular case, the jury’s award for compensatory damages will not be reduced by any finding of plaintiff’s comparative fault. Further, the damages noted reflect adjustments based on post-trial or appellate rulings.

References below to “R.J. Reynolds,” “Lorillard” and “Liggett Group” are to R.J. Reynolds Tobacco Company, Lorillard Tobacco Company and Liggett Group, LLC, respectively.

Currently Pending Engle Cases with Verdicts Against PM USA

(rounded to nearest $ million)

Plaintiff	Verdict Date	Defendant(s)	Court	Compensatory Damages (1)	Punitive Damages (PM USA)	Post-Trial Status
Chacon	October 2023	PM USA	Miami-Dade	<$1 million	<$1 million	Defendant’s post-trial motions pending.
Hoffman	January 2023	PM USA	Miami-Dade	$5 million ($3 million PM USA)	$0	Appeal by defendant to the Third District Court of Appeal pending.
Levine	September 2022	PM USA and R.J. Reynolds	Miami-Dade	$1 million	$0	Appeals by defendants and plaintiff to the Third District Court of Appeal pending.
Schertzer	April 2022	PM USA and R.J. Reynolds	Miami-Dade	$3 million	$0	Appeal by defendants to the Third District Court of Appeal pending.
Lipp	September 2021	PM USA	Miami-Dade	$15 million	$28 million	Appeal by defendant to the Third District Court of Appeal pending.

Plaintiff	Verdict Date	Defendant(s)	Court	Compensatory Damages (1)	Punitive Damages (PM USA)	Post-Trial Status
Garcia	May 2021	PM USA	Miami-Dade	$6 million ($3 million PM USA)	$0	Appeal by defendant to the Third District Court of Appeal pending.
Duignan	February 2020 (2)	PM USA and R.J. Reynolds	Pinellas	$3 million ($1 million PM USA)	$0	The Second District Court of Appeal vacated the final judgment entered in plaintiff’s favor following retrial, vacated the punitive damages judgment, directed the trial court to apply the jury’s comparative fault assessments to the compensatory damages verdict and ordered the trial court to set aside the jury’s findings on plaintiff’s fraud claims. In June 2023, plaintiff filed a motion for reconsideration, which the court denied in September 2023. The case will be returned to the trial court for further proceedings, including a retrial of plaintiff’s punitive damages claim.
McCall	March 2019	PM USA	Broward	<$1 million (<$1 million PM USA)	<$1 million	Defendant’s post-trial motions pending.
Chadwell	September 2018	PM USA	Miami-Dade	$2 million	$0	Third District Court of Appeal has received supplemental briefing in accordance with the decision in Prentice (3).
Kaplan (McLaughlin)	July 2018	PM USA and R.J. Reynolds	Broward	$2 million	$0	Florida Supreme Court vacated the punitive damages award in accordance with the decision in Sheffield (3). The Fourth District Court of Appeal affirmed the compensatory damages award and granted a new trial on punitive damages.
Cooper (Blackwood)	September 2015	PM USA and R.J. Reynolds	Broward	$5 million (<$1 million PM USA)	$0	Fourth District Court of Appeal affirmed the compensatory damages award and granted a new trial on punitive damages.

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

(2) Plaintiff’s verdict following a retrial of an initial verdict in favor of plaintiff.

(3) PM USA is not a defendant in Prentice or Sheffield, which are discussed below in Engle Progeny Appellate Issues.

Engle Cases Concluded Within Past 12 Months

(rounded to nearest $ million)

Plaintiff	Verdict Date	Defendant(s)	Court	Accrual Date	Payment Amount for Damages (if any)	Payment Date
Miller	September 2022	PM USA and R.J. Reynolds	Miami-Dade	Third quarter of 2022	<$1 million	December 2022
Tuttle	August 2022	PM USA	Duval	Third quarter of 2022	<$1 million	October 2022
Holliman	February 2019	PM USA	Miami-Dade	Fourth quarter of 2022	$3 million	January 2023
D. Brown	January 2015	PM USA	Federal Court - Middle District of Florida	Third quarter of 2022	$5 million	August 2022

Engle Progeny Appellate Issues: Appellate decisions in the following Engle progeny cases may have wide application to other Engle progeny cases:

In Mary Sheffield v. R.J. Reynolds Tobacco Company, an Engle progeny case against R.J. Reynolds only, the Florida Supreme Court resolved a conflict among Florida’s District Courts of Appeal finding that the 1999 amendments to Florida’s punitive damages statute (including its caps and bar on multiple punitive damages awards for the same course of conduct) apply in wrongful death cases where the decedent was injured prior to the October 1, 1999 effective date of the amendments but died from his or her injuries after such effective date.

In Linda Prentice v. R.J. Reynolds Tobacco Company, an Engle progeny case against R.J. Reynolds only, the Florida Supreme Court resolved a conflict among Florida’s District Courts of Appeal finding that in order for an Engle plaintiff to prevail on fraudulent concealment and conspiracy claims, plaintiff must prove that the smoker relied to his or her detriment on a statement that concealed or omitted material information about the health risks or addictiveness of smoking. The Florida Supreme Court declined to revisit its prior decisions giving preclusive effect to the Engle Phase I findings, described above in Engle Class Action.

Florida Bond Statute: In June 2009, Florida amended its existing bond cap statute by adding a $200 million bond cap that applies to all state Engle progeny lawsuits in the aggregate and establishes individual bond caps for individual Engle progeny cases in amounts that vary depending on the number of judgments in effect at a given time. Plaintiffs have been unsuccessful in various challenges to the bond cap statute in Florida state court.

No federal court has yet addressed the constitutionality of the bond cap statute or the applicability of the bond cap to Engle progeny cases tried in federal court.

From time to time, legislation has been presented to the Florida legislature that would repeal the bond cap statute; however to date, no legislation repealing the statute has passed.

Other Smoking and Health Class Actions: Since the dismissal in May 1996 of a purported nationwide class action brought on behalf of allegedly addicted smokers, plaintiffs have filed numerous putative smoking and health class action suits in various state and federal courts. In general, these cases have purported to be brought on behalf of residents of a particular state or states (although a few cases have purported to be nationwide in scope) and have raised addiction claims and, in many cases, claims of physical injury as well.

Class certification has been denied or reversed by courts in 61 smoking and health class actions involving PM USA in Arkansas (1), California (1), Delaware (1), the District of Columbia (2), Florida (2), Illinois (3), Iowa (1), Kansas (1), Louisiana (1), Maryland (1), Michigan (1), Minnesota (1), Nevada (29), New Jersey (6), New York (2), Ohio (1), Oklahoma (1), Oregon (1), Pennsylvania (1), Puerto Rico (1), South Carolina (1), Texas (1) and Wisconsin (1). See Certain Other Tobacco-Related Litigation below for a discussion of “Lights” and “Ultra Lights” class action cases and medical monitoring class action cases pending against PM USA.

As of October 23, 2023, PM USA and Altria are named as defendants, along with other cigarette manufacturers, in seven class actions filed in the Canadian provinces of Alberta, Manitoba, Nova Scotia, Saskatchewan, British Columbia and Ontario. In Saskatchewan, British Columbia (two separate cases) and Ontario, plaintiffs seek class certification on behalf of individuals who suffer or have suffered from various diseases, including chronic obstructive pulmonary disease, emphysema, heart disease or cancer, after smoking defendants’ cigarettes. In the actions filed in Alberta, Manitoba and Nova Scotia, plaintiffs seek certification of classes of all individuals who smoked defendants’ cigarettes. In March 2019, all of these class actions were stayed as a result of three Canadian tobacco manufacturers (none of which is related to us) seeking protection under Canada’s Companies’ Creditors Arrangement Act (which is similar to Chapter 11 bankruptcy in the United States). The companies entered into these proceedings following a Canadian appellate court upholding two smoking and health class action verdicts against those companies totaling approximately CAD $13 billion. See Guarantees and Other Similar Matters below for a discussion of the Distribution Agreement between Altria and PMI, which provides for indemnities for certain liabilities concerning tobacco products.

Health Care Cost Recovery Litigation

Overview: In the health care cost recovery litigation, governmental entities seek reimbursement of health care cost expenditures allegedly caused by tobacco products and, in some cases, of future expenditures and damages. Relief sought by some but not all plaintiffs includes punitive damages, multiple damages and other statutory damages and penalties, injunctions prohibiting alleged marketing and sales to minors, disclosure of research, disgorgement of profits, funding of anti-smoking programs, additional disclosure of nicotine yields, and payment of attorney and expert witness fees.

Although there have been some decisions to the contrary, most judicial decisions in the United States have dismissed all or most health care cost recovery claims against cigarette manufacturers. Nine federal circuit courts of appeals and eight state appellate courts, relying primarily on grounds that plaintiffs’ claims were too remote, have ordered or affirmed dismissals of health care cost recovery actions. The U.S. Supreme Court has refused to consider plaintiffs’ appeals from the cases decided by five federal circuit courts of appeal.

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

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

cases, while both Altria and PM USA are named as defendants in the New Brunswick, Ontario, Newfoundland and Labrador, Alberta, Manitoba, Saskatchewan, Prince Edward Island and Nova Scotia cases. The Nunavut Territory and Northwest Territory have passed legislation permitting similar claims, but lawsuits based on this legislation have not been filed. All of these cases have been stayed pending resolution of proceedings in Canada involving three tobacco manufacturers (none of which are affiliated with us) under the Companies’ Creditors Arrangement Act discussed above. See Smoking and Health Litigation - Other Smoking and Health Class Actions above for a discussion of these proceedings. See Guarantees and Other Similar Matters below for a discussion of the Distribution Agreement between Altria and PMI that provides for indemnities for certain liabilities concerning tobacco products.

Settlements of Health Care Cost Recovery Litigation: In November 1998, PM USA and certain other tobacco product manufacturers entered into the Master Settlement Agreement (the “MSA”) with 46 states, the District of Columbia and certain United States territories to settle asserted and unasserted health care cost recovery and other claims. PM USA and certain other tobacco product manufacturers had previously entered into agreements to settle similar claims brought by Mississippi, Florida, Texas and Minnesota (together with the MSA, the “State Settlement Agreements”). The State Settlement Agreements require that the original participating manufacturers or “OPMs” (now PM USA, R.J. Reynolds and, with respect to certain brands, ITG Brands, LLC (“ITG”)) make annual payments of approximately $9.4 billion, subject to adjustments for several factors, including inflation, market share and industry volume. In addition, the OPMs are required to pay settling plaintiffs’ attorneys’ fees, subject to an annual cap of $500 million; these quarterly payments are expected to end in 2024. For the three months ended September 30, 2023 and 2022, the aggregate amount recorded in cost of sales with respect to the State Settlement Agreements was approximately $900 million and $1.1 billion, respectively. For the nine months ended September 30, 2023 and 2022, the aggregate amount recorded in cost of sales with respect to the State Settlement Agreements was approximately $2.8 billion and $3.0 billion, respectively. These amounts include PM USA’s estimate of amounts related to NPM Adjustments discussed below.

NPM Adjustment Disputes: The “NPM Adjustment” is a reduction in MSA payments made by the OPMs and those manufacturers that are subsequent signatories to the MSA (collectively, the “participating manufacturers” or “PMs”) that applies if the PMs collectively lose at least a specified level of market share to non-participating manufacturers since 1997, subject to certain conditions and defenses.

The independent auditor (“IA”) appointed under the MSA has calculated that PM USA’s share of the maximum potential NPM Adjustments for 2004-2022 is (exclusive of interest or earnings): $388 million for 2004; $181 million for 2005; $154 million for 2006; $185 million for 2007; $250 million for 2008; $211 million for 2009; $218 million for 2010; $166 million for 2011; $214 million for 2012; $224 million for 2013; $258 million for 2014; $313 million for 2015; $292 million for 2016; $285 million for 2017; $318 million for 2018; $415 million for 2019; $572 million for 2020; $675 million for 2021; and $571 million for 2022. These maximum amounts will be substantially reduced to reflect the NPM Adjustment settlements discussed below, and potentially for current and future calculation disputes and other developments. PM USA’s recovery for 2004 is addressed below. In addition, PM USA’s recovery of such reduced amounts for all subsequent years will be dependent upon subsequent determinations regarding state-specific defenses and disputes with other PMs.

Settlements of NPM Adjustment Disputes.

▪Multi-State Settlement. By the end of 2018, a total of 36 MSA states and territories had entered the multi-state settlement of NPM Adjustment disputes to which PM USA is a party. Of these 36 states and territories, 35 entered settlement through 2022, and one state entered settlement through 2024. In March 2022, Illinois joined the multi-state settlement, settling the NPM Adjustment disputes through 2028. As a result, PM USA will receive approximately $80 million for 2004 through 2021, $20 million of which relates to the 2019 through 2021 “transition years.” In connection with this development for Illinois, PM USA recorded $80 million as a reduction in cost of sales in the first quarter of 2022. In August 2023, Iowa also joined the multi-state settlement, settling the NPM Adjustment disputes through 2029 and, together with Illinois, bringing the total number of states and territories that have joined the multi-state settlement to 38. As a result, PM USA will receive approximately $19 million for 2005 through 2022, $4 million of which relates to the 2020 through 2022 “transition years.” As a result of Iowa joining the multi-state settlement, PM USA recorded $19 million as a reduction in cost of sales in the third quarter of 2023. Pursuant to the multi-state settlement, PM USA has received $1.24 billion since the first group of states entered the NPM Adjustment dispute settlement in 2014 and expects to receive approximately $353 million in credits to offset PM USA’s MSA payments through 2039.

▪New York Settlement. In 2015, PM USA entered into a separate NPM Adjustment settlement with New York in which PM USA settled the NPM Adjustment disputes with New York in perpetuity. PM USA has received $503 million pursuant to the New York settlement and expects to receive annual credits applied against the MSA payments due to New York going forward.

▪Montana Settlement. In 2020, PM USA entered into a separate NPM Adjustment settlement with Montana in which PM USA settled the NPM Adjustment disputes with Montana through 2030. This settlement resulted in a payment by PM USA of $4 million.

Continuing NPM Adjustment Disputes with States That Have Not Settled.

▪2004 NPM Adjustment. The PMs and the nine states that have not settled the NPM Adjustment disputes participated in a multi-state arbitration of NPM Adjustment disputes for 2004. A tenth state, Illinois, also participated in the arbitration, but joined the multi-state settlement after the arbitration panel issued its decisions described below. The arbitration panels issued decisions finding that three states, Missouri, New Mexico and Washington, were not diligent in their enforcement of their escrow statutes in 2004 and, therefore, are subject to the NPM adjustment for 2004. The arbitration panels further found that the remaining seven states were diligent in their enforcement and, therefore, are not subject to the NPM adjustment for 2004. PM USA received approximately $52 million on account of the 2004 NPM Adjustment as a credit against its April 2023 MSA payment. Washington, Missouri and New Mexico have challenged those determinations in their respective state courts and with the arbitration panels, and several issues remain to be resolved by the courts that may affect the final amount of the 2004 NPM adjustment PM USA and other PMs will receive. In September 2023, the New Mexico trial court vacated the arbitration panel’s decision finding that New Mexico was not diligent in 2004. PM USA and other PMs have appealed that decision, and the appeals remain pending. PM USA had recorded $21 million and $3 million as a reduction in cost of sales in the third quarter of 2021 and fourth quarter of 2022, respectively, for its estimate of the minimum principal amount of the 2004 NPM Adjustment it received. PM USA had recorded $23 million and $5 million as interest income in the third quarter of 2021 and fourth quarter of 2022, respectively, for its estimate of the interest amount it received in connection with the 2004 NPM Adjustment.

▪2005-2007 NPM Adjustments. The PMs and the eight states that have not settled the NPM Adjustment disputes are currently arbitrating NPM Adjustment disputes before a single arbitration panel. The arbitration encompasses three years, 2005-2007, for seven of the eight states, and one year, 2005, for one state. As of October 23, 2023, no decisions have resulted from the arbitration.

▪Subsequent Years. No assurance can be given as to when proceedings for 2008 and subsequent years will be scheduled or the precise form those proceedings will take.

▪In November 2022, the State of New Mexico filed a motion in New Mexico state court against the PMs, including PM USA, claiming that the PMs wrongfully disputed the applicability of NPM Adjustments to New Mexico and that all adjustment amounts to date should have been paid to New Mexico rather than deposited into the disputed payments account. PM USA has placed certain disputed NPM Adjustment amounts attributed to New Mexico in the disputed payments account established pursuant to the terms of the MSA. New Mexico seeks a total of approximately $84 million in disputed payments from all defendants combined, as well as treble and punitive damages, and other relief. The PMs filed a cross motion to compel arbitration in the New Mexico matter. No decisions have resulted from these motions.

Other Disputes Under the State Settlement Agreements: The payment obligations of the tobacco product manufacturers that are parties to the State Settlement Agreements, as well as the allocations of any NPM Adjustments and related settlements, have been and may continue to be affected by R.J. Reynolds’s acquisition of Lorillard in 2015 and its related sale of certain cigarette brands to ITG (the “ITG transferred brands”). PM USA filed motions to enforce the State Settlement Agreements in Florida, Minnesota, Texas and Mississippi in connection with various positions that R.J. Reynolds and ITG took with regard to the ITG transferred brands. After various court decisions in each of those states that were favorable to PM USA, those motions to enforce have now been resolved either through settlement or exhaustion of appeals, although further proceedings may occur based on the resolution of certain outstanding litigation between R.J. Reynolds and ITG. In May 2022, PM USA filed a motion to compel arbitration under the MSA regarding certain positions that R.J. Reynolds and ITG took with regard to the ITG transferred brands. In June 2022, the matter was resolved through mutual agreement of the parties. PM USA continues to dispute how the ITG transferred brands are treated in allocating the NPM Adjustments under the MSA and related settlements and may pursue such claims.

In December 2019, the State of Mississippi filed a motion in Mississippi state court seeking to enforce the Mississippi State Settlement Agreement against PM USA, R.J. Reynolds and ITG concerning the tax rates used in the annual calculation of the net operating profit adjustment payments starting in 2018. The Mississippi state court held a hearing in October 2021 and issued a decision in June 2022 granting the State’s motion. Further proceedings remain outstanding, and a final judgment has not yet been issued.

In May 2023, PM USA and R.J. Reynolds filed a motion in the United States District Court for the Eastern District of Texas seeking to enforce the Texas State Settlement Agreement against the State of Texas concerning the same tax rate issue raised by the State of Mississippi. The State of Texas filed a cross-motion to enforce, and the matter remains pending in the trial court.

In January 2021, PM USA and other PMs reached an agreement with several MSA states to waive the PMs’ claim under the most favored nation provision of the MSA in connection with a settlement between those MSA states and a non-participating manufacturer, S&M Brands, Inc. (“S&M Brands”), under which the states released certain claims against S&M Brands in exchange for receiving a portion of the funds S&M Brands deposited into escrow accounts in those states pursuant to the states’ escrow statutes. In consideration for waiving its most favored nation claim, PM USA received approximately $32 million from

the escrow funds paid to those MSA states under their settlement with S&M Brands. These funds were received in January 2021 and were recorded in our condensed consolidated statement of earnings (losses) for the first quarter of 2021 as a reduction in cost of sales.

Federal Government’s Lawsuit: In 1999, the U.S. government filed a lawsuit in the U.S. District Court for the District of Columbia against various cigarette manufacturers, including PM USA, and others, including Altria, asserting claims under three federal statutes. The case ultimately proceeded only under the civil provisions of RICO. In August 2006, the district court held that certain defendants, including Altria and PM USA, violated RICO and engaged in certain “sub-schemes” to defraud that the government had alleged.

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

Corrective statements began appearing in newspapers and on television in the fourth quarter of 2017 and on websites in the second quarter of 2018, and the onserts began appearing in the fourth quarter of 2018. In December 2022, the district court entered a consent order approving a settlement with respect to corrective statements on point-of-sale signage.

In 2022, we recorded provisions totaling approximately $28 million for the estimated costs of implementing the corrective statements on point-of-sale signage remedy.

In June 2020, the U.S. government filed a motion with the district court asking for clarification as to whether the court-ordered injunction that applies to cigarettes discussed above also applies to HeatSticks, a heated tobacco product used with the IQOS System. In August 2020, we filed an opposition to the government’s motion and, in the alternative, a motion to modify the injunction to make clear it does not apply to HeatSticks. In July 2023, the district court ruled that HeatSticks are cigarettes as defined in the court ordered injunction. The district court also ruled that PM USA can make FDA authorized reduced exposure claims about HeatSticks. In September 2023, PM USA appealed the district court’s ruling that HeatSticks are subject to the court’s injunction.

E-vapor Product Litigation

As of October 23, 2023, we are defendants in 57 class action lawsuits, 3,614 individual lawsuits and 1,506 “third party” lawsuits relating to JUUL e-vapor products, which include school districts, state and local governments and tribal and healthcare organization lawsuits. We refer to this litigation collectively as the “Multidistrict Litigation.” The 57 class action lawsuits include 32 cases involving plaintiffs whose claims were previously included in other class action complaints but were refiled as separate stand-alone class actions for procedural and other reasons. Three of the class action lawsuits are pending in Canada. The theories of recovery in the Multidistrict Litigation include violation of RICO, fraud, failure to warn, design defect, negligence and unfair trade practices. Plaintiffs seek various remedies, including compensatory and punitive damages, restitution or remediation (for plaintiffs that are government entities) and an injunction prohibiting product sales.

An additional group of cases is pending in California state courts. In January 2020, the Judicial Council of California determined that this group of cases was appropriate for coordination and assigned the group to the Superior Court of California, Los Angeles County, for pretrial purposes.

In May 2023, we reached agreement on terms to resolve the majority of the Multidistrict Litigation lawsuits as well as the group of cases pending in a consolidated California state court proceeding for $235 million, for which amount we recorded a pre-tax provision in the second quarter of 2023. The settlement is conditioned on certain participation rates among plaintiffs, and the class action portion of the settlement is subject to final approval by the court. The settlement applies to all of the Multidistrict Litigation except 35 “third party” cases brought by Native American tribes and the three class action lawsuits pending in Canada. The settlement also does not apply to the cases brought by the attorneys general of Alaska, Hawaii and New Mexico, discussed below, or 17 putative class actions antitrust lawsuits. For a description of the antitrust cases not subject to the settlement, see Antitrust Litigation below.

Four of the “third party” lawsuits noted above against us and JUUL were initiated, individually, by the attorneys general of Alaska, Hawaii, Minnesota and New Mexico alleging violations of state consumer protection and other similar laws. We filed motions to dismiss the lawsuits. In Alaska, Hawaii and Minnesota, the motions were denied in February 2022, May 2021 and June 2021, respectively. Our motion to dismiss remains pending in New Mexico. In the Alaska lawsuit, although the trial court declined to dismiss most of the plaintiff’s claims, the trial court did dismiss plaintiff’s public nuisance claim. In April 2023, we agreed to settle the Minnesota lawsuit for an immaterial amount. The trial courts in the Alaska and Hawaii lawsuits have set the

trials for October 2024 and February 2024, respectively. As of October 23, 2023, the trial court in New Mexico has not set a trial date.

In May 2023, Fuma International LLC (“Fuma”) filed a lawsuit against Altria and our affiliates Nu Mark LLC (“Nu Mark”), AGDC, ALCS and NJOY in the United States District Court for the Eastern District of Virginia asserting claims of patent infringement based on the sale of various Nu Mark and NJOY products, including NJOY ACE, in the United States. In August 2023, we entered into an agreement with Fuma resulting in NJOY’s acquisition of the patents that Fuma asserted in its lawsuit. The parties separately agreed that Fuma would dismiss its patent infringement claims in exchange for $10 million, and such claims were dismissed in August 2023. We recorded a pre-tax provision for $10 million in the third quarter of 2023 related to the agreement and paid such amount to Fuma in August 2023.

In June 2023, JUUL and VMR Products LLC filed a lawsuit against Altria and our affiliates AGDC, ALCS, NJOY Holdings and NJOY in the United States District Court for the District of Arizona asserting claims of patent infringement based on the sale of NJOY ACE in the United States. Plaintiffs seek various remedies, including damages and an injunction on sales of NJOY ACE. The lawsuit is currently stayed.

Also in June 2023, the same plaintiffs filed a related action against the same defendants with the U.S. International Trade Commission (“ITC”). There, the plaintiffs also allege patent infringement, but the remedies sought include a prohibition on the importation of NJOY ACE into the United States. No damages are recoverable in the proceedings before the ITC.

In August 2023, NJOY filed a complaint against JUUL in the United States District Court for the District of Delaware asserting claims of patent infringement based on the sale of certain JUUL e-vapor products, including the currently marketed JUUL device and JUULpods, in the United States. Also in August 2023, NJOY filed a related action against JUUL with the ITC alleging patent infringement and seeking a ban on the importation and sale of the same JUUL products in the United States.

IQOS Litigation

In April 2020, RAI Strategic Holdings, Inc. and R.J. Reynolds Vapor Co., which are affiliates of R.J. Reynolds, filed a lawsuit against Altria, PM USA, ALCS, PMI and its affiliate, Philip Morris Products S.A., in the U.S. District Court for the Eastern District of Virginia asserting claims of patent infringement based on the sale of the IQOS System electronic device and Marlboro HeatSticks in the United States. Plaintiffs seek various remedies, including preliminary and permanent injunctive relief, treble damages and attorneys’ fees. Altria and PMI were previously dismissed from the lawsuit, and plaintiffs’ claims against the other defendants have been stayed.

PM USA, ALCS and Philip Morris Products S.A. filed counterclaims against plaintiffs in the Eastern District of Virginia lawsuit alleging patent infringement by R.J. Reynolds’ e-vapor products. In June 2022, PM USA and ALCS reached an agreement with R.J. Reynolds resulting in dismissal of their counterclaims. In addition, ALCS filed a separate lawsuit against R.J. Reynolds in the U.S. District Court for the Middle District of North Carolina also alleging patent infringement by R.J. Reynolds’ e-vapor products. In September 2022, a jury awarded ALCS $95 million in damages for past infringement, plus supplemental damages and interest. In January 2023, the court ordered R.J. Reynolds to pay ALCS a 5.25% royalty on future sales of its infringing product resulting in positive net income through the expiration of the relevant patents in 2035. R.J. Reynolds has filed a notice of appeal of the judgment. As gains related to this lawsuit have not yet been determined to be realized or realizable in accordance with GAAP, they have not been recognized in our financial statements for the nine and three months ended September 30, 2023.

In April 2020, a related patent infringement action was filed against the same defendants by the same plaintiffs, as well as R.J. Reynolds, with the ITC, but the remedies sought included a prohibition on the importation of the IQOS System electronic device, Marlboro HeatSticks and component parts into the United States and on the sale of any such products previously imported into the United States. No damages are recoverable in the proceedings before the ITC. In September 2021, the ITC issued a limited exclusion order barring the importation of the IQOS System electronic device, Marlboro HeatSticks and the infringing components into the United States and a cease and desist order barring domestic sales, marketing and distribution of these imported products. The orders became effective on November 29, 2021. Consequently, PM USA removed the IQOS System electronic device and Marlboro HeatSticks from the marketplace. In December 2021, defendants appealed the orders to the U.S. Court of Appeals for the Federal Circuit and, in March 2023, the U.S. Court of Appeals for the Federal Circuit issued its decision affirming the ITC exclusion order in full.

In November 2020, Healthier Choices Management Corp. filed an additional unrelated patent infringement case in the U.S. District Court for the Northern District of Georgia against PM USA and Philip Morris Products S.A. seeking damages and equitable relief. In February 2021, defendants filed a motion to dismiss the lawsuit, which the court granted in July 2021. In December 2021, the U.S. District Court denied plaintiff’s motion to amend the complaint and plaintiff appealed this ruling to the U.S. Court of Appeals for the Federal Circuit, which reversed the district court’s decision and remanded for further proceedings. On remand, the U.S. District Court stayed the case pending the outcome of plaintiff’s appeal from a ruling by the

U.S. Patent and Trademark Office, which issued a decision that the claims of the asserted patent are not valid. That appeal remains pending.

Antitrust Litigation

In March 2023, we entered into a stock transfer agreement with JUUL pursuant to which, among other things, we transferred to JUUL all of our beneficially owned JUUL equity securities. See Note 5. Investments in Equity Securities for a discussion of our disposition of our investment in JUUL.

In April 2020, the FTC issued an administrative complaint against Altria and JUUL alleging that our 35% investment in JUUL and the associated agreements constitute an unreasonable restraint of trade in violation of Section 1 of the Sherman Antitrust Act of 1890 (“Sherman Act”) and Section 5 of the Federal Trade Commission Act of 1914, and substantially lessened competition in violation of Section 7 of the Clayton Antitrust Act (“Clayton Act”). In February 2022, the administrative law judge dismissed the FTC’s complaint and, also in February 2022, FTC complaint counsel appealed the administrative law judge’s decision to the FTC. In March 2023, following our disposition of our investment in JUUL, we filed a motion to dismiss the complaint. In June 2023, the FTC dismissed the action as no longer in the public interest.

Also as of October 23, 2023, 17 putative class action lawsuits have been filed against Altria and JUUL in the U.S. District Court for the Northern District of California. The lawsuits initially named, in addition to the two companies, certain senior executives and certain members of the board of directors of both companies as defendants; however, those individuals currently or formerly affiliated with Altria were later dismissed. In November 2020, these lawsuits were consolidated into three complaints (one on behalf of direct purchasers, one on behalf of indirect purchasers and one on behalf of indirect resellers). The consolidated lawsuits, as amended, cite the FTC administrative complaint and allege that Altria and JUUL violated Sections 1, 2 and/or 3 of the Sherman Act and Section 7 of the Clayton Act and various state antitrust, consumer protection and unjust enrichment laws by restraining trade and/or substantially lessening competition in the U.S. closed-system electronic cigarette market. Plaintiffs seek various remedies, including treble damages, attorneys’ fees, a declaration that the agreements between Altria and JUUL are invalid and rescission of the transaction. We filed a motion to dismiss these lawsuits in January 2021. In August 2021, the U.S. District Court for the Northern District of California denied our motion to dismiss except with respect to plaintiffs’ claims for injunctive and equitable relief. However, plaintiffs were granted the opportunity to replead such claims by the trial court, which plaintiffs did in September 2021. In January 2022, the trial court ordered that the direct-purchaser plaintiffs’ claims against JUUL be sent to arbitration pursuant to an arbitration provision in JUUL’s online purchase agreement. The court granted plaintiffs’ leave to replead the complaint with new direct-purchaser plaintiffs, which plaintiffs did in February 2022, substituting four new plaintiffs. In September 2023, the direct-purchaser plaintiffs filed a third amended consolidated class action complaint, substituting three of the four named plaintiffs. The trial is set to commence in May 2026.

Shareholder Class Action and Shareholder Derivative Lawsuits

Shareholder Class Action: In the fourth quarter of 2021, we agreed to settle a class action lawsuit brought by purported Altria shareholders against Altria and certain of our current and former executives and JUUL, its founders and certain of its current and former executives alleging false and misleading statements and omissions relating to our former investment in JUUL. Pursuant to the settlement, which was granted final approval by the trial court in March 2022, among other things, (i) all claims asserted against Altria and the other named defendants were resolved without any liability or wrongdoing attributed to them personally or to Altria and (ii) Altria agreed to pay the class an aggregate amount of $90 million, which amount included attorneys’ fees. We recorded pre-tax provisions totaling $90 million in 2021 and, in January 2022, paid $90 million to plaintiffs’ escrow account.

Federal and State Shareholder Derivative Lawsuits: In October 2022, we agreed to settle a series of federal and state derivative cases brought by Altria shareholders on behalf of themselves and Altria against Altria and certain of our current and former executives and directors and JUUL, its founders and certain of its current and former executives. The cases related to our former investment in JUUL and asserted claims of breach of fiduciary duty by the Altria defendants and aiding and abetting in that alleged breach of fiduciary duty by the remaining defendants.

Under the terms of the settlement, which became effective in May 2023, among other things, we agreed to provide $100 million in funding over a five-year period to underage tobacco prevention and cessation programs, which may include positive youth development programs, led by independent third-party organizations. We expect to begin funding in 2024. In 2022, we recorded pre-tax provisions totaling $27 million for costs associated with the independent monitoring of our funding commitments and attorneys’ fees. In the first quarter of 2023, we recorded pre-tax provisions totaling approximately $100 million related to the settlement, and in April 2023, paid $15 million to plaintiffs’ escrow account for attorneys’ fees.

Certain Other Tobacco-Related Litigation

“Lights/Ultra Lights” Cases and Other Smoking and Health Class Actions: Plaintiffs have sought certification of their cases as class actions, alleging among other things, that the uses of the terms “Lights” and/or “Ultra Lights” constitute deceptive and unfair trade practices, common law or statutory fraud, unjust enrichment or breach of warranty, and have sought injunctive and

equitable relief, including restitution and, in certain cases, punitive damages. These class actions have been brought against PM USA and, in certain instances, Altria or our other subsidiaries, on behalf of individuals who purchased and consumed various brands of cigarettes. Defenses raised in these cases include lack of misrepresentation, lack of causation, injury and damages, the statute of limitations, non-liability under state statutory provisions exempting conduct that complies with federal regulatory directives, and the First Amendment. Twenty-one state courts in 23 “Lights” cases have refused to certify class actions, dismissed class action allegations, reversed prior class certification decisions or have entered judgment in favor of PM USA. As of October 23, 2023, two “Lights/Ultra Lights” class actions are pending in U.S. state courts. Neither case is active.

As of October 23, 2023, one smoking and health case alleging personal injury or seeking court-supervised programs or an ongoing medical monitoring program on behalf of individuals exposed to environmental tobacco smoke and purporting to be brought on behalf of a class of individual plaintiffs, is pending in a U.S. state court. The case is currently inactive.

UST Litigation: UST and/or its tobacco subsidiaries have been named in a number of individual tobacco and health lawsuits over time. Plaintiffs’ allegations of liability in these cases have been based on various theories of recovery, such as negligence, strict liability, fraud, misrepresentation, design defect, failure to warn, breach of implied warranty, addiction and breach of consumer protection statutes. Plaintiffs have typically sought various forms of relief, including compensatory and punitive damages, and certain equitable relief, including disgorgement. Defenses raised in these cases have included lack of causation, assumption of the risk, comparative fault and/or contributory negligence, and statutes of limitations. As of October 23, 2023, there is no such case pending against UST and/or its tobacco subsidiaries.

Environmental Regulation

Altria and our former subsidiaries are subject to various federal, state and local laws and regulations concerning the discharge of materials into the environment, or otherwise related to environmental protection, including, in the United States: the Clean Air Act, the Clean Water Act, the Resource Conservation and Recovery Act and the Comprehensive Environmental Response, Compensation and Liability Act (commonly known as “Superfund”), which can impose joint and several liability on each responsible party. Altria and our former subsidiaries are involved in several cost recovery/contribution cases subjecting them to potential costs of remediation and natural resource damages under Superfund or other laws and regulations. We expect to continue to make capital and other expenditures in connection with environmental laws and regulations.

We provide for expenses associated with environmental remediation obligations on an undiscounted basis when such amounts are probable and can be reasonably estimated. Such accruals are adjusted as new information develops or circumstances change. Other than those amounts, it is not possible to reasonably estimate the cost of any environmental remediation and compliance efforts that we may undertake in the future. In the opinion of our management, however, compliance with environmental laws and regulations, including the payment of any remediation costs or damages and the making of related expenditures, has not had, and is not expected to have, a material adverse effect on our condensed consolidated results of operations, capital expenditures, financial position or cash flows.

Guarantees and Other Similar Matters

In the ordinary course of business, we have agreed to indemnify a limited number of third parties in the event of future litigation. At September 30, 2023, we (i) had $44 million of unused letters of credit obtained in the ordinary course of business and (ii) were contingently liable for guarantees related to our own performance, including $22 million for surety bonds recorded on our condensed consolidated balance sheet. In addition, from time to time, we issue lines of credit to affiliated entities. These items have not had, and are not expected to have, a significant impact on our liquidity.

Under the terms of a distribution agreement between Altria and PMI (the “Distribution Agreement”), entered into as a result of our 2008 spin-off of our former subsidiary PMI, liabilities concerning tobacco products will be allocated based in substantial part on the manufacturer. PMI will indemnify Altria and PM USA for liabilities related to tobacco products manufactured by PMI or contract manufactured for PMI by PM USA, and PM USA will indemnify PMI for liabilities related to tobacco products manufactured by PM USA, excluding tobacco products contract manufactured for PMI. We do not have a related liability recorded on our condensed consolidated balance sheet at September 30, 2023 as the fair value of this indemnification is insignificant. PMI has agreed not to seek indemnification with respect to the IQOS System patent litigation discussed above under IQOS Litigation, excluding the patent infringement case filed with the U.S. District Court for the Northern District of Georgia.

PM USA has issued guarantees relating to our obligations under our outstanding debt securities, any borrowings under our $3.0 billion New Credit Agreement and amounts outstanding under our commercial paper program. For further discussion, see Note 11. Debt.

XML

New Accounting Guidance Not Yet Adopted

9 Months Ended

Sep. 30, 2023

Accounting Standards Update and Change in Accounting Principle [Abstract]

New Accounting Guidance Not Yet Adopted

New Accounting Guidance Not Yet Adopted

The following table provides a description of issued accounting guidance applicable to, but not yet adopted by, us:

Standards	Description	Effective Date for Public Entity	Effect on Financial Statements
ASU 2022-03 Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions	The guidance clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments also specify required disclosures for equity securities subject to contractual sale restrictions.	The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2023.	We do not expect our adoption of this guidance to have a material impact on our consolidated financial statements and related disclosures.

XML

Pay vs Performance Disclosure - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Pay vs Performance Disclosure
Net Income (Loss) Attributable to Parent	$ 2,166	$ 224	$ 6,070	$ 3,074

XML

Insider Trading Arrangements	3 Months Ended
	Sep. 30, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

XML

Background and Basis of Presentation (Policies)

9 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Investments in Equity Securities

under the equity method of accounting using a one-quarter lag.

Basis of Presentation

Our interim condensed consolidated financial statements are unaudited. Our management believes that all adjustments necessary for a fair statement of the interim results presented have been reflected in our interim condensed consolidated financial statements. All such adjustments were of a normal recurring nature. Net revenues and net earnings for any interim period are not necessarily indicative of results that may be expected for the entire year.

New Accounting Pronouncements

On January 1, 2023, we adopted Accounting Standards Update (“ASU”) 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU No. 2021-08”). This guidance updates how an entity recognizes and measures contract assets and contract liabilities acquired in a business combination. Our adoption of ASU No. 2021-08 had no impact on our condensed consolidated financial statements or related disclosures.

Additionally, on January 1, 2023, we adopted ASU 2022-04, Liabilities- Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations (“ASU No. 2022-04”). This guidance requires that a buyer in a supplier finance program disclose sufficient qualitative and quantitative information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period and potential magnitude. As of and for the nine months ended September 30, 2023, our adoption of ASU No. 2022-04 had no material impact on our condensed consolidated financial statements or related disclosures.

For a description of issued accounting guidance applicable to, but not yet adopted by, us, see Note 14. New Accounting Guidance Not Yet Adopted.

Standards	Description	Effective Date for Public Entity	Effect on Financial Statements
ASU 2022-03 Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions	The guidance clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments also specify required disclosures for equity securities subject to contractual sale restrictions.	The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2023.	We do not expect our adoption of this guidance to have a material impact on our consolidated financial statements and related disclosures.

Intangible assets

We determined the preliminary fair values of the identifiable intangibles assets using an income approach. The fair value measurements were primarily based on significant inputs that are not observable in the market, such as discounted cash flow analyses, and thus are classified in Level 3 of the fair value hierarchy.

Contingent payments

In determining the estimated fair value of contingent payments, we made certain judgments, estimates and assumptions, the most significant of which was the likelihood of certain potential regulatory outcomes. Contingent payments are classified in Level 3 of the fair value hierarchy.We record provisions in our condensed consolidated financial statements for pending litigation when we determine that an unfavorable outcome is probable and the amount of the loss can be reasonably estimated. At the present time, while it is reasonably possible that an unfavorable outcome in a case may occur, except to the extent discussed elsewhere in this Note 13. Contingencies: (i) management has concluded that it is not probable that a loss has been incurred in any of the pending cases; (ii) management is unable to estimate the possible loss or range of loss that could result from an unfavorable outcome in any of the pending cases; and (iii) accordingly, management has not provided any amounts in our condensed consolidated financial statements for unfavorable outcomes, if any. Litigation defense costs are expensed as incurred.

Goodwill and Intangible Assets

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

Cash Discounts

We calculate substantially all cash discounts, offered to customers for prompt payment, as a flat rate per unit based on agreed-upon payment terms and record receivables net of the cash discounts on our condensed consolidated balance sheets.

Revenue from Contract with Customer

We record an allowance for returned goods, which is included in other accrued liabilities on our condensed consolidated balance sheets. It is USSTC’s policy to accept authorized sales returns from its customers for products that have passed the freshness date printed on product packaging due to the limited shelf life of USSTC’s MST and snus products. We record estimated sales returns, which are based principally on historical volume and return rates, as a reduction to revenues. Actual sales returns will differ from estimated sales returns to the extent actual results differ from estimated assumptions. We reflect differences between actual and estimated sales returns in the period in which the actual amounts become known. These differences, if any, have not had a material impact on our condensed consolidated financial statements. All returned goods are destroyed upon return and not included in inventory. Consequently, we do not record an asset for USSTC’s right to recover goods from customers upon return.

Equity Method Investments

We account for our investment in ABI under the equity method of accounting because we have the ability to exercise significant influence over the operating and financial policies of ABI, including having active representation on ABI’s board of directors and certain ABI board committees. Through this representation, we participate in ABI’s policy making processes.

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

The fair value of our equity investment in ABI is based on (i) unadjusted quoted prices in active markets for ABI’s ordinary shares and was classified in Level 1 of the fair value hierarchy and (ii) observable inputs other than Level 1 prices, such as quoted prices for similar assets for the Restricted Shares and was classified in Level 2 of the fair value hierarchy. We can convert our Restricted Shares to ordinary shares at our discretion. Therefore, the fair value of each Restricted Share is based on the value of an ordinary share.

The fair value of our equity method investment in Cronos is based on unadjusted quoted prices in active markets for Cronos’s common shares and was classified in Level 1 of the fair value hierarchy. At December 31, 2022, the fair value of our equity method investment in Cronos exceeded its carrying value by $22 million or approximately 6%.

Income Taxes

We determine deferred tax assets and liabilities based on the differences between the financial statement and tax bases of assets and liabilities, using enacted tax rates in effect for the year in which the differences are expected to reverse. We record a valuation allowance when it is more likely than not that some portion or all of a deferred tax asset will not be realized. We determine the realizability of deferred tax assets based on the weight of all available positive and negative evidence. In reaching this determination, we consider the character of the assets and the possible sources of taxable income of the appropriate character within the available carryback and carryforward periods available under the tax law.

Revenue From Contract With Customer, Deferred Revenue

We record payments received by our businesses in advance of product shipment as deferred revenue. These payments are included in other accrued liabilities on our condensed consolidated balance sheets until control of such products is obtained by the customer.

Environmental Regulation

We provide for expenses associated with environmental remediation obligations on an undiscounted basis when such amounts are probable and can be reasonably estimated.

XML

Background and Basis of Presentation (Tables)

9 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Share Repurchase Activity

Our share repurchase activity was as follows:

	For the Nine Months Ended September 30,				For the Three Months Ended September 30,
(in millions, except per share data)	2023		2022		2023		2022
Total number of shares repurchased	16.3		29.9		5.9		8.5
Aggregate cost of shares repurchased	$	732	$	1,451	$	260	$	368
Average price per share of shares repurchased	$	44.97	$	48.60	$	44.26	$	43.68

XML

Acquisition of NJOY (Tables)

9 Months Ended

Sep. 30, 2023

Business Combination and Asset Acquisition [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The following amounts represent the preliminary estimates for purchase price allocation to assets acquired and liabilities assumed in the NJOY Transaction, which will be finalized by the end of the measurement period:

(in millions)
Cash and cash equivalents	$	22
Receivables	7
Inventories	19
Other assets	7
Property, plant and equipment	16
Other intangible assets:
Developed technology (amortizable)	1,000
Trademarks (amortizable)	230
Supplier agreements (amortizable)	180
Accounts payable	(7)
Accrued liabilities	(20)
Deferred income taxes	(167)
Total identifiable net assets	1,287
Total consideration	2,901
Goodwill	$	1,614

XML

Goodwill and Other Intangible Assets, net (Tables)

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets and Goodwill

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

	Goodwill				Other Intangible Assets, net
(in millions)	September 30, 2023		December 31, 2022		September 30, 2023		December 31, 2022
Smokeable products segment	$	99	$	99	$	2,970	$	2,989
Oral tobacco products segment	5,078		5,078		9,073		9,097
Other	1,614		—		1,684		298
Total	$	6,791	$	5,177	$	13,727	$	12,384

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

	For the Nine Months Ended				For the Year Ended
	September 30, 2023				December 31, 2022
(in millions)	Goodwill		Other Intangible Assets, net		Goodwill		Other Intangible Assets, net
Balance at January 1	$	5,177	$	12,384	$	5,177	$	12,306
Changes due to:
Acquisitions (1)	1,614		1,430		—		151
Amortization	—		(87)		—		(73)
Balance at end of period	$	6,791	$	13,727	$	5,177	$	12,384

(1) Substantially all of the 2023 amounts are attributable to the NJOY Transaction. For additional information regarding the NJOY Transaction, see Note 2. Acquisition of NJOY. 2022 amounts attributable to certain intellectual property for other tobacco products.

Schedule of Indefinite-Lived Intangible Assets

Other intangible assets consisted of the following:

	September 30, 2023				December 31, 2022
(in millions)	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Indefinite-lived intangible assets	$	11,443	$	—	$	11,443	$	—
Definite-lived intangible assets	2,841		557		1,411		470
Total other intangible assets	$	14,284	$	557	$	12,854	$	470

Schedule of Finite-Lived Intangible Assets

Other intangible assets consisted of the following:

	September 30, 2023				December 31, 2022
(in millions)	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Indefinite-lived intangible assets	$	11,443	$	—	$	11,443	$	—
Definite-lived intangible assets	2,841		557		1,411		470
Total other intangible assets	$	14,284	$	557	$	12,854	$	470

XML

Investments in Equity Securities (Tables)

9 Months Ended

Sep. 30, 2023

Investments [Abstract]

Investment

The carrying amount of our current and former investments consisted of the following:

(in millions)	September 30, 2023		December 31, 2022
ABI	$	9,563	$	8,975
Cronos	344		375
JUUL	—		250
Total	$	9,907	$	9,600

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

	For the Nine Months Ended September 30,						For the Three Months Ended September 30,
(in millions)	2023			2022			2023		2022
ABI (1)	$	(401)		$	2,155		$	(61)	$	2,367
Cronos (1)	46			197			3		11
(Income) losses from investments under equity method of accounting	(355)			2,352			(58)		2,378
JUUL	250		(2)	1,355		(3)	—		100		(3)
(Income) losses from investments in equity securities	$	(105)		$	3,707		$	(58)	$	2,478

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

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

(3) Represents the estimated change in fair value. Prior to the disposition of our JUUL equity securities on March 3, 2023, we accounted for our former investment in JUUL as an investment in an equity security measured at fair value.

XML

Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Debt

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

(in millions)	September 30, 2023		December 31, 2022
Carrying value	$	25,098	$	26,680
Fair value	21,325		22,928
Foreign currency denominated debt included in long-term debt:
Carrying value	3,164		4,540
Fair value	2,867		4,165

XML

Benefit Plans (Tables)

9 Months Ended

Sep. 30, 2023

Retirement Benefits [Abstract]

Schedule of Net Periodic Benefit (Income) Cost

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

	Pension				Postretirement				Pension				Postretirement
	For the Nine Months Ended September 30,								For the Three Months Ended September 30,
(in millions)	2023		2022		2023		2022		2023		2022		2023		2022
Service cost	$	29	$	48	$	11	$	17	$	9	$	16	$	3	$	7
Interest cost	250		155		49		31		84		51		15		11
Expected return on plan assets	(364)		(370)		(5)		(10)		(121)		(123)		(1)		(4)
Amortization:
Net loss (gain)	3		72		(2)		14		1		24		(2)		6
Prior service cost (credit)	4		5		(30)		(34)		1		2		(10)		(11)
Net periodic benefit cost (income)	$	(78)	$	(90)	$	23	$	18	$	(26)	$	(30)	$	5	$	9

XML

Earnings per Share (Tables)

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Earnings Per Share

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

	For the Nine Months Ended September 30,				For the Three Months Ended September 30,
(in millions)	2023		2022		2023		2022
Net earnings	$	6,070	$	3,074	$	2,166	$	224
Less: Distributed and undistributed earnings attributable to share-based awards	(12)		(9)		(5)		(3)
Earnings for basic and diluted EPS	$	6,058	$	3,065	$	2,161	$	221
Weighted-average shares for basic and diluted EPS	1,780		1,808		1,773		1,799

XML

Other Comprehensive Earnings/Losses (Tables)

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

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

	For the Nine Months Ended September 30, 2023
(in millions)	Benefit Plans		ABI			Currency Translation Adjustments and Other		Accumulated Other Comprehensive Losses
Balances, December 31, 2022	$	(1,436)	$	(1,369)		$	34	$	(2,771)
Other comprehensive earnings (losses) before reclassifications	—		388			14		402
Deferred income taxes	—		(82)			—		(82)
Other comprehensive earnings (losses) before reclassifications, net of deferred income taxes	—		306			14		320
Amounts reclassified to net earnings	(21)		(5)			—		(26)
Deferred income taxes	5		1			—		6
Amounts reclassified to net earnings, net of deferred income taxes	(16)		(4)			—		(20)
Other comprehensive earnings (losses), net of deferred income taxes	(16)		302		(1)	14		300
Balances, September 30, 2023	$	(1,452)	$	(1,067)		$	48	$	(2,471)

	For the Three Months Ended September 30, 2023
(in millions)	Benefit Plans		ABI			Currency Translation Adjustments and Other		Accumulated Other Comprehensive Losses
Balances, June 30, 2023	$	(1,447)	$	(1,303)		$	41	$	(2,709)
Other comprehensive earnings (losses) before reclassifications	—		316			7		323
Deferred income taxes	—		(69)			—		(69)
Other comprehensive earnings (losses) before reclassifications, net of deferred income taxes	—		247			7		254
Amounts reclassified to net earnings	(7)		(14)			—		(21)
Deferred income taxes	2		3			—		5
Amounts reclassified to net earnings, net of deferred income taxes	(5)		(11)			—		(16)
Other comprehensive earnings (losses), net of deferred income taxes	(5)		236		(1)	7		238
Balances, September 30, 2023	$	(1,452)	$	(1,067)		$	48	$	(2,471)

	For the Nine Months Ended September 30, 2022
(in millions)	Benefit Plans		ABI			Currency Translation Adjustments and Other		Accumulated Other Comprehensive Losses
Balances, December 31, 2021	$	(1,612)	$	(1,512)		$	68	$	(3,056)
Other comprehensive earnings (losses) before reclassifications	—		902			(11)		891
Deferred income taxes	—		(206)			—		(206)
Other comprehensive earnings (losses) before reclassifications, net of deferred income taxes	—		696			(11)		685
Amounts reclassified to net earnings	65		(74)			(1)		(10)
Deferred income taxes	(17)		15			—		(2)
Amounts reclassified to net earnings, net of deferred income taxes	48		(59)			(1)		(12)
Other comprehensive earnings (losses), net of deferred income taxes	48		637		(1)	(12)		673
Balances, September 30, 2022	$	(1,564)	$	(875)		$	56	$	(2,383)

	For the Three Months Ended September 30, 2022
(in millions)	Benefit Plans		ABI			Currency Translation Adjustments and Other		Accumulated Other Comprehensive Losses
Balances, June 30, 2022	$	(1,581)	$	(869)		$	73	$	(2,377)
Other comprehensive earnings (losses) before reclassifications	—		18			(16)		2
Deferred income taxes	—		(11)			—		(11)
Other comprehensive earnings (losses) before reclassifications, net of deferred income taxes	—		7			(16)		(9)
Amounts reclassified to net earnings	24		(16)			(1)		7
Deferred income taxes	(7)		3			—		(4)
Amounts reclassified to net earnings, net of deferred income taxes	17		(13)			(1)		3
Other comprehensive earnings (losses), net of deferred income taxes	17		(6)		(1)	(17)		(6)
Balances, September 30, 2022	$	(1,564)	$	(875)		$	56	$	(2,383)

(1) Primarily reflects our share of ABI’s currency translation adjustments and the impact of our designated net investment hedges related to our equity investment in ABI. For further discussion of designated net investment hedges, see Note 6. Financial Instruments.

Reclassification out of Accumulated Other Comprehensive Income

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

	For the Nine Months Ended September 30,				For the Three Months Ended September 30,
(in millions)	2023		2022		2023		2022
Benefit Plans: (1)
Net loss	$	5	$	94	$	2	$	33
Prior service cost/credit	(26)		(29)		(9)		(9)
	(21)		65		(7)		24
ABI (2)	(5)		(74)		(14)		(16)
Currency Translation Adjustments (2)	—		(1)		—		(1)
Pre-tax amounts reclassified from accumulated other comprehensive losses to net earnings	$	(26)	$	(10)	$	(21)	$	7

(1) Amounts are included in net defined benefit plan costs. For further details, see Note 7. Benefit Plans.

(2) Amounts are included in (income) losses from investments in equity securities. For further information, see Note 5. Investments in Equity Securities.

XML

Segment Reporting (Tables)

9 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

Segment data were as follows:

	For the Nine Months Ended September 30,				For the Three Months Ended September 30,
(in millions)	2023		2022		2023		2022
Net revenues:
Smokeable products	$	16,482	$	17,020	$	5,572	$	5,882
Oral tobacco products	1,993		1,948		685		670
All other	33		17		24		(2)
Net revenues	$	18,508	$	18,985	$	6,281	$	6,550
Earnings before income taxes:
OCI:
Smokeable products	$	8,092	$	8,112	$	2,743	$	2,791
Oral tobacco products	1,314		1,262		455		425
All other	(17)		(27)		(4)		(7)
Amortization of intangibles	(87)		(54)		(42)		(19)
General corporate expenses	(551)		(192)		(63)		(78)
Operating income	8,751		9,101		3,089		3,112
Interest and other debt expense, net	758		832		272		271
Net periodic benefit income, excluding service cost	(95)		(137)		(33)		(44)
(Income) losses from investments in equity securities	(105)		3,707		(58)		2,478
Loss on Cronos-related financial instruments	—		14		—		—
Earnings before income taxes	$	8,193	$	4,685	$	2,908	$	407

Schedule of Tobacco and Health and Certain Other Litigation Items

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

	For the Nine Months Ended September 30,				For the Three Months Ended September 30,
(in millions)	2023		2022		2023		2022
Smokeable products segment	$	65	$	71	$	13	$	21
General corporate expenses	348		27		10		20
Interest and other debt expense, net	11		3		—		2
Total	$	424	$	101	$	23	$	43

XML

Income Taxes (Tables)

9 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

Summary of Income Taxes

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

	For the Nine Months Ended September 30,						For the Three Months Ended September 30,
(in millions)	2023			2022			2023			2022
Earnings before income taxes	$	8,193		$	4,685		$	2,908		$	407
Provision for income taxes	2,123			1,611			742			183
Income tax rate	25.9		%	34.4		%	25.5		%	45.0		%

Summary of Valuation Allowance

The following chart provides a reconciliation of the beginning and ending valuation allowances for the nine months ended September 30, 2023:

(in millions)
Balance at beginning of year	$	2,800
Additions to valuation allowance charged to income tax expense	76
Releases to valuation allowance credited to income tax benefit	(6)
Foreign currency translation	(2)
Additions to valuation allowance due to NJOY Transaction (no impact to earnings)	12
Reductions to valuation allowance offset to deferred tax asset (no impact to earnings)	(663)
Balance at end of period	$	2,217

XML

Contingencies (Tables)

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Schedule of Contingencies

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

	For the Nine Months Ended September 30,				For the Three Months Ended September 30,
(in millions)	2023		2022		2023		2022
Accrued liability for tobacco and health and certain other litigation items at beginning of period	$	71	$	91	$	381	$	25
Pre-tax charges for:
Tobacco and health and certain other litigation (1)	75		71		23		21
Shareholder derivative lawsuits (2)	98		27		—		20
JUUL-related settlements (3)	240		—		—		—
Related interest costs	11		3		—		2
Payments	(122)		(137)		(31)		(13)
Accrued liability for tobacco and health and certain other litigation items at end of period	$	373	$	55	$	373	$	55

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

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

(3) Includes the settlement of certain e-vapor product litigation relating to JUUL e-vapor products and the e-vapor product litigation brought by the Minnesota attorney general. See E-vapor Product Litigation below for a discussion of these settlements.

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

	October 23, 2023	October 24, 2022	October 25, 2021
Individual Smoking and Health Cases (1)	167	161	179
Health Care Cost Recovery Actions (2)	1	1	1
E-vapor Cases (3)	5,177	4,351	2,951
Other Tobacco-Related Cases (4)	3	3	3

(1) Includes as of October 23, 2023, 15 cases filed in Illinois, 17 cases filed in New Mexico, 53 cases filed in Massachusetts and 46 non-Engle cases filed in Florida. Does not include individual smoking and health cases brought by or on behalf of plaintiffs in Florida state and federal courts following the decertification of the Engle class (these Engle progeny cases are discussed below in Smoking and Health Litigation - Engle Class Action). Also does not include 1,386 cases brought by flight attendants seeking compensatory damages for personal injuries allegedly caused by exposure to environmental tobacco smoke (“ETS”). The flight attendants allege that they are members of an ETS smoking and health class action in Florida, which was settled in 1997 (Broin). The terms of the court-approved settlement in that case allowed class members to file individual lawsuits seeking compensatory damages but prohibited them from seeking punitive damages. Class members were prohibited from filing individual lawsuits after 2000 under the court-approved settlement.

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

(3) Includes as of October 23, 2023, 57 class action lawsuits, 3,614 individual lawsuits and 1,506 “third party” lawsuits relating to the Multidistrict Litigation discussed under E-vapor Product Litigation below. The 57 class action lawsuits include 32 cases in the Northern District of California involving plaintiffs whose claims were previously included in other class action complaints but were refiled as separate stand-alone class actions for procedural and other reasons. In May 2023, we reached agreement on terms to resolve the majority of the Multidistrict Litigation lawsuits. Also includes three patent infringement lawsuits filed against us and certain of our affiliates. For further discussion of the pending Multidistrict Litigation settlement and patent infringement litigation, see E-vapor Product Litigation below.

(4) Includes as of October 23, 2023, one inactive smoking and health case alleging personal injury and purporting to be brought on behalf of a class of individual plaintiffs and two inactive class action lawsuits alleging that use of the terms “Lights” and “Ultra Lights” constitute deceptive and unfair trade practices, common law or statutory fraud, unjust enrichment, breach of warranty or violations of RICO.

Currently Pending Engle Cases with Verdicts Against PM USA

(rounded to nearest $ million)

Plaintiff	Verdict Date	Defendant(s)	Court	Compensatory Damages (1)	Punitive Damages (PM USA)	Post-Trial Status
Chacon	October 2023	PM USA	Miami-Dade	<$1 million	<$1 million	Defendant’s post-trial motions pending.
Hoffman	January 2023	PM USA	Miami-Dade	$5 million ($3 million PM USA)	$0	Appeal by defendant to the Third District Court of Appeal pending.
Levine	September 2022	PM USA and R.J. Reynolds	Miami-Dade	$1 million	$0	Appeals by defendants and plaintiff to the Third District Court of Appeal pending.
Schertzer	April 2022	PM USA and R.J. Reynolds	Miami-Dade	$3 million	$0	Appeal by defendants to the Third District Court of Appeal pending.
Lipp	September 2021	PM USA	Miami-Dade	$15 million	$28 million	Appeal by defendant to the Third District Court of Appeal pending.

Plaintiff	Verdict Date	Defendant(s)	Court	Compensatory Damages (1)	Punitive Damages (PM USA)	Post-Trial Status
Garcia	May 2021	PM USA	Miami-Dade	$6 million ($3 million PM USA)	$0	Appeal by defendant to the Third District Court of Appeal pending.
Duignan	February 2020 (2)	PM USA and R.J. Reynolds	Pinellas	$3 million ($1 million PM USA)	$0	The Second District Court of Appeal vacated the final judgment entered in plaintiff’s favor following retrial, vacated the punitive damages judgment, directed the trial court to apply the jury’s comparative fault assessments to the compensatory damages verdict and ordered the trial court to set aside the jury’s findings on plaintiff’s fraud claims. In June 2023, plaintiff filed a motion for reconsideration, which the court denied in September 2023. The case will be returned to the trial court for further proceedings, including a retrial of plaintiff’s punitive damages claim.
McCall	March 2019	PM USA	Broward	<$1 million (<$1 million PM USA)	<$1 million	Defendant’s post-trial motions pending.
Chadwell	September 2018	PM USA	Miami-Dade	$2 million	$0	Third District Court of Appeal has received supplemental briefing in accordance with the decision in Prentice (3).
Kaplan (McLaughlin)	July 2018	PM USA and R.J. Reynolds	Broward	$2 million	$0	Florida Supreme Court vacated the punitive damages award in accordance with the decision in Sheffield (3). The Fourth District Court of Appeal affirmed the compensatory damages award and granted a new trial on punitive damages.
Cooper (Blackwood)	September 2015	PM USA and R.J. Reynolds	Broward	$5 million (<$1 million PM USA)	$0	Fourth District Court of Appeal affirmed the compensatory damages award and granted a new trial on punitive damages.

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

(2) Plaintiff’s verdict following a retrial of an initial verdict in favor of plaintiff.

(3) PM USA is not a defendant in Prentice or Sheffield, which are discussed below in Engle Progeny Appellate Issues.

Engle Cases Concluded Within Past 12 Months

(rounded to nearest $ million)

Plaintiff	Verdict Date	Defendant(s)	Court	Accrual Date	Payment Amount for Damages (if any)	Payment Date
Miller	September 2022	PM USA and R.J. Reynolds	Miami-Dade	Third quarter of 2022	<$1 million	December 2022
Tuttle	August 2022	PM USA	Duval	Third quarter of 2022	<$1 million	October 2022
Holliman	February 2019	PM USA	Miami-Dade	Fourth quarter of 2022	$3 million	January 2023
D. Brown	January 2015	PM USA	Federal Court - Middle District of Florida	Third quarter of 2022	$5 million	August 2022

XML

New Accounting Guidance Not Yet Adopted (Tables)

9 Months Ended

Sep. 30, 2023

Accounting Standards Update and Change in Accounting Principle [Abstract]

Recent Accounting Guidance Not Yet Adopted

The following table provides a description of issued accounting guidance applicable to, but not yet adopted by, us:

Standards	Description	Effective Date for Public Entity	Effect on Financial Statements
ASU 2022-03 Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions	The guidance clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments also specify required disclosures for equity securities subject to contractual sale restrictions.	The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2023.	We do not expect our adoption of this guidance to have a material impact on our consolidated financial statements and related disclosures.

XML

Background and Basis of Presentation (Narrative) (Details)	1 Months Ended	3 Months Ended			9 Months Ended
	Aug. 31, 2023 $ / shares	Sep. 30, 2023 USD ($) $ / shares	Jun. 30, 2023 $ / shares	Sep. 30, 2022 $ / shares	Sep. 30, 2023 USD ($) $ / shares	Sep. 30, 2022 $ / shares	Jan. 31, 2023 USD ($)	Oct. 31, 2021 USD ($)	Jan. 31, 2021 USD ($)
Equity, Class of Treasury Stock [Line Items]
Common Stock Dividend Increase Percentage	0.043
Common Stock, Dividends, Per Share, Declared | $ / shares	$ 0.98	$ 0.98	$ 0.94	$ 0.94	$ 2.86	$ 2.74
Common Stock, Dividend Rate, Annual Per Share | $ / shares		$ 3.92			$ 3.92
Horizon [Member] | PM USA [Member]
Equity, Class of Treasury Stock [Line Items]
Ownership percentage in consolidated subsidiary		75.00%			75.00%
Horizon [Member] | JTIUH [Member]
Equity, Class of Treasury Stock [Line Items]
Noncontrolling interest, ownership percentage by noncontrolling owners		25.00%			25.00%
January 2021 Share Repurchase Program [Member]
Equity, Class of Treasury Stock [Line Items]
Planned share repurchase program								$ 3,500,000,000	$ 2,000,000,000
January 2023 Share Repurchase Program [Member]
Equity, Class of Treasury Stock [Line Items]
Planned share repurchase program							$ 1,000,000,000
Stock repurchase program, remaining authorized repurchase amount		$ 268,000,000			$ 268,000,000

XML

Background and Basis of Presentation (Share Repurchase Table) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Equity, Class of Treasury Stock [Line Items]
Aggregate cost of shares repurchased	$ 260	$ 368	$ 732	$ 1,451
January 2021 Share Repurchase Program [Member]
Equity, Class of Treasury Stock [Line Items]
Total number of shares repurchased (shares)		8.5		29.9
Aggregate cost of shares repurchased		$ 368		$ 1,451
Average price per share of shares repurchased (usd per share)		$ 43.68		$ 48.60
January 2023 Share Repurchase Program [Member]
Equity, Class of Treasury Stock [Line Items]
Total number of shares repurchased (shares)	5.9		16.3
Aggregate cost of shares repurchased	$ 260		$ 732
Average price per share of shares repurchased (usd per share)	$ 44.26		$ 44.97

XML

Acquisition of NJOY - Narrative (Details) - USD ($)		3 Months Ended	9 Months Ended
	Jun. 01, 2023	Sep. 30, 2023	Sep. 30, 2023	Jun. 30, 2023
Business Acquisition [Line Items]
Business acquisition, intangible assets, expected tax deductible amount	$ 0
Term Loan [Member]
Business Acquisition [Line Items]
Face amount	2,000,000,000
NJOY Holdings, Inc. [Member]
Business Acquisition [Line Items]
Total consideration	2,901,000,000
Payments to acquire businesses, gross	2,750,000,000
Business combination, contingent consideration arrangements, range of outcomes, value, high	500,000,000
Business combination, contingent consideration, liability	$ 130,000,000	$ 130,000,000	$ 130,000,000	$ 130,000,000
Business combination, acquisition related costs		$ 14,000,000	$ 63,000,000
NJOY Holdings, Inc. [Member] | Weighted Average
Business Acquisition [Line Items]
Acquired finite-lived intangible assets, weighted average useful life	17 years

XML

Acquisition of NJOY - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions	Jun. 01, 2023	Sep. 30, 2023	Dec. 31, 2022	Dec. 31, 2021
Business Acquisition [Line Items]
Goodwill		$ 6,791	$ 5,177	$ 5,177
NJOY Holdings, Inc. [Member]
Business Acquisition [Line Items]
Cash and cash equivalents	$ 22
Receivables	7
Inventories	19
Other assets	7
Property, plant and equipment	16
Accounts payable	(7)
Accrued liabilities	(20)
Deferred income taxes	(167)
Total identifiable net assets	1,287
Total consideration	2,901
Goodwill	1,614
Developed Technology Rights [Member] | NJOY Holdings, Inc. [Member]
Business Acquisition [Line Items]
Other intangible assets:	1,000
Trademarks | NJOY Holdings, Inc. [Member]
Business Acquisition [Line Items]
Other intangible assets:	230
Supplier Agreements [Member] | NJOY Holdings, Inc. [Member]
Business Acquisition [Line Items]
Other intangible assets:	$ 180

XML

Revenues from Contracts with Customers (Narrative) (Details) - USD ($)	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Revenue from Contract with Customer [Abstract]
Deferred revenue	$ 284,000,000	$ 252,000,000
Expected period for satisfaction of performance obligation	three days
Other	$ 57,000,000	48,000,000
Allowance for doubtful accounts, receivables	$ 0	$ 0

XML

Goodwill and Other Intangible Assets, net (Schedule of Goodwill and Other Intangible Assets by Segment) (Details) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022	Dec. 31, 2021
Goodwill [Line Items]
Goodwill	$ 6,791	$ 5,177	$ 5,177
Other Intangible Assets, net	13,727	12,384	$ 12,306
Smokeable Products Segment [Member]
Goodwill [Line Items]
Goodwill	99	99
Other Intangible Assets, net	2,970	2,989
Oral Tobacco Segment [Member]
Goodwill [Line Items]
Goodwill	5,078	5,078
Other Intangible Assets, net	9,073	9,097
All Other [Member]
Goodwill [Line Items]
Goodwill	1,614	0
Other Intangible Assets, net	$ 1,684	$ 298

XML

Goodwill and Other Intangible Assets, net (Other Intangible Assets Disclosure) (Details) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
Indefinite-lived intangible assets	$ 11,443	$ 11,443
Definite-lived intangible assets	2,841	1,411
Accumulated Amortization	557	470
Total other intangible assets	$ 14,284	$ 12,854

XML

Goodwill and Other Intangible Assets, net (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022	Jul. 31, 2023
Loss Contingencies [Line Items]
Amortization of intangible assets	$ 42	$ 19	$ 87	$ 54	$ 73
Finite-lived intangible assets, amortization expense, next twelve months	170		170
Finite-lived intangible assets, amortization expense, year two	170		170
Finite-lived intangible assets, amortization expense, year three	170		170
Finite-lived intangible assets, amortization expense, year four	170		170
Finite-lived intangible assets, amortization expense, year five	170		170
Disposal group, including discontinued operation, interest income	3		54
Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | IQOS Tobacco Heating System [Member]
Loss Contingencies [Line Items]
Disposal group, purchase agreement, consideration, additional payment					$ 1,000	$ 1,800
Disposal group, deferred gain on sale of rights under an agreement	$ 2,700		$ 2,700
Weighted Average
Loss Contingencies [Line Items]
Finite-lived intangible asset, useful life	18 years		18 years
UST Inc. [Member]
Loss Contingencies [Line Items]
Indefinite-lived trademarks	$ 8,800		$ 8,800
Middleton [Member]
Loss Contingencies [Line Items]
Indefinite-lived trademarks	$ 2,600		$ 2,600

XML

Goodwill and Other Intangible Assets, net (Changes in Goodwill and Net Carrying Amount of Intangible Assets) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Goodwill [Roll Forward]
Goodwill, beginning of period			$ 5,177	$ 5,177	$ 5,177
Acquisitions			1,614		0
Goodwill, end of period	$ 6,791		6,791		5,177
Intangible Assets [Roll Forward]
Intangible assets, net, beginning of period			12,384	12,306	12,306
Acquisitions			1,430		151
Amortization	(42)	$ (19)	(87)	$ (54)	(73)
Intangible assets, net, end of period	$ 13,727		$ 13,727		$ 12,384

XML

Investments in Equity Securities (Summary of Investments) (Details) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Investments [Line Items]
Investments	$ 9,907	$ 9,600
ABI [Member]
Investments [Line Items]
ABI	9,563	8,975
Cronos [Member]
Investments [Line Items]
Cronos	344	375
JUUL [Member]
Investments [Line Items]
JUUL	$ 0	$ 250

XML

Investments in Equity Securities (Earnings in Equity Securities) (Details) - USD ($) $ in Millions	3 Months Ended			9 Months Ended
	Sep. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Schedule of Equity Method Investments [Line Items]
(Income) losses from investments under equity method of accounting	$ (58)		$ 2,378	$ (355)	$ 2,352
(Income) losses from investments in equity securities	(58)		2,478	(105)	3,707
ABI [Member]
Schedule of Equity Method Investments [Line Items]
(Income) losses from investments under equity method of accounting	(61)		2,367	(401)	2,155
Cronos [Member]
Schedule of Equity Method Investments [Line Items]
(Income) losses from investments under equity method of accounting	3		11	46	197
JUUL [Member]
Schedule of Equity Method Investments [Line Items]
Loss on disposition of JUUL equity securities	$ 0	$ 250	$ 100	$ 250	$ 1,355

XML

Investments in Equity Securities (Investment in ABI Narrative) (Details) - USD ($) shares in Millions, $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2022	Sep. 30, 2023	Dec. 31, 2022
Schedule of Equity Method Investments [Line Items]
Equity method investment, difference between carrying amount and fair value	$ (2,500)	$ (2,500)
Equity method investment, impairment	$ 2,500	$ 2,500
ABI [Member]
Schedule of Equity Method Investments [Line Items]
Equity method investment, ownership percentage			10.00%
Number of restricted shares owned (in shares)			185
Number of ordinary shares owned (in shares)			12
Fair Value, Inputs, Level 1 [Member] | ABI [Member]
Schedule of Equity Method Investments [Line Items]
Fair value of equity investment			$ 11,000	$ 11,900
Equity method investment, difference between carrying amount and fair value			$ 9,600	$ 9,000
Equity method investment, difference between carrying amount and fair value, percentage (approximately)	(22.00%)	(22.00%)	15.00%	33.00%

XML

Investments in Equity Securities (Investment in Cronos Narrative) (Details) shares in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) shares	Sep. 30, 2022 USD ($)	Sep. 30, 2023 $ / shares	Dec. 31, 2022 USD ($)
Investments [Line Items]
Equity method investment, difference between carrying amount and fair value	$ (2,500,000,000)		$ (2,500,000,000)
Equity method investment, impairment	$ 2,500,000,000		$ 2,500,000,000
Cronos [Member]
Investments [Line Items]
Ownership percentage		41.10%
Number of ordinary shares owned (approximately) (in shares) | shares		156.6
Equity method investment, difference between carrying amount and fair value		$ (31,000,000)			$ 22,000,000
Equity method investment, difference between carrying amount and fair value, percentage (approximately)		(9.00%)			(6.00%)
Equity method investment, impairment		$ 0
Equity Contract, Preemptive Rights [Member] | Cronos [Member]
Investments [Line Items]
Equity method investment, shares purchased, (CAD per share) | $ / shares				$ 16.25
Equity method investments, fixed preemptive rights		$ 0			$ 0

XML

Investments in Equity Securities (Investment in JUUL Narrative) (Details) - USD ($) $ in Millions	3 Months Ended			9 Months Ended
	Sep. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
JUUL [Member]
Schedule of Equity Method Investments [Line Items]
Loss on disposition of JUUL equity securities	$ 0	$ 250	$ 100	$ 250	$ 1,355

XML

Financial Instruments (Narrative) (Details) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023 USD ($) contract	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) contract	Sep. 30, 2022 USD ($)	Dec. 31, 2022 contract
Derivative Instruments, Gain (Loss) [Line Items]
Number of foreign currency derivatives held | contract	0		0		0
Foreign currency denominated debt [Member] | Net Investment Hedging [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Other comprehensive (income) loss, net investment hedge, (gain) loss, before reclassification and tax | $	$ (101)	$ (289)	$ (32)	$ (664)

XML

Financial Instruments (Aggregate Fair Value and Carrying Value) (Details) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Derivative [Line Items]
Carrying value	$ 25,098	$ 26,680
Fair value	21,325	22,928
Foreign currency denominated debt included in long-term debt:
Carrying value	25,098	26,680
Foreign Currency Denominated Debt [Member]
Derivative [Line Items]
Carrying value	3,164	4,540
Foreign currency denominated debt included in long-term debt:
Carrying value	3,164	4,540
Fair value	$ 2,867	$ 4,165

XML

Benefit Plans (Schedule Of Components Of Net Periodic Benefit Cost (Income)) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Pension [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 9	$ 16	$ 29	$ 48
Interest cost	84	51	250	155
Expected return on plan assets	(121)	(123)	(364)	(370)
Amortization:
Net loss (gain)	1	24	3	72
Prior service cost (credit)	1	2	4	5
Net periodic benefit cost (income)	(26)	(30)	(78)	(90)
Postretirement [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	3	7	11	17
Interest cost	15	11	49	31
Expected return on plan assets	(1)	(4)	(5)	(10)
Amortization:
Net loss (gain)	(2)	6	(2)	14
Prior service cost (credit)	(10)	(11)	(30)	(34)
Net periodic benefit cost (income)	$ 5	$ 9	$ 23	$ 18

XML

Benefit Plans (Narrative) (Details)	9 Months Ended
	Sep. 30, 2023 USD ($)
Pension [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined benefit plan, plan assets, contributions by employer	$ 14,000,000
Pension [Member] | Maximum [Member]
Defined Benefit Plan Disclosure [Line Items]
Anticipated additional employer contributions	10,000,000
Postretirement [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined benefit plan, plan assets, contributions by employer	0
Postretirement [Member] | Maximum [Member]
Defined Benefit Plan Disclosure [Line Items]
Anticipated additional employer contributions	$ 0

XML

Earnings per Share (Basic and Diluted Earnings Per Share) (Details) - USD ($) shares in Thousands, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Earnings Per Share [Abstract]
Net earnings	$ 2,166	$ 224	$ 6,070	$ 3,074
Less: Distributed and undistributed earnings attributable to share-based awards	(5)	(3)	(12)	(9)
Less: Distributed and undistributed earnings attributable to share-based awards	(5)	(3)	(12)	(9)
Earnings for basic EPS	2,161	221	6,058	3,065
Earnings for diluted EPS	$ 2,161	$ 221	$ 6,058	$ 3,065
Weighted-average shares for basic EPS (in shares)	1,773,000	1,799,000	1,780,000	1,808,000
Weighted-average shares for diluted EPS (in shares)	1,773,000	1,799,000	1,780,000	1,808,000

XML

Other Comprehensive Earnings/Losses (Changes in Each Component of Accumulated Other Comprehensive Losses) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Accumulated Other Comprehensive Income [Roll Forward]
Beginning balance	$ (3,777)	$ (2,403)	$ (3,923)	$ (1,606)
Other comprehensive earnings (losses), net of deferred income taxes	238	(6)	300	673
Ending balance	(3,357)	(4,232)	(3,357)	(4,232)
Accumulated Other Comprehensive Losses [Member]
Accumulated Other Comprehensive Income [Roll Forward]
Beginning balance	(2,709)	(2,377)	(2,771)	(3,056)
Other comprehensive earnings (losses) before reclassifications	323	2	402	891
Deferred income taxes	(69)	(11)	(82)	(206)
Other comprehensive earnings (losses) before reclassifications, net of deferred income taxes	254	(9)	320	685
Amounts reclassified to net earnings	(21)	7	(26)	(10)
Deferred income taxes	5	(4)	6	(2)
Amounts reclassified to net earnings, net of deferred income taxes	(16)	3	(20)	(12)
Other comprehensive earnings (losses), net of deferred income taxes	238	(6)	300	673
Ending balance	(2,471)	(2,383)	(2,471)	(2,383)
Benefit Plans [Member]
Accumulated Other Comprehensive Income [Roll Forward]
Beginning balance	(1,447)	(1,581)	(1,436)	(1,612)
Other comprehensive earnings (losses) before reclassifications	0	0	0	0
Deferred income taxes	0	0	0	0
Other comprehensive earnings (losses) before reclassifications, net of deferred income taxes	0	0	0	0
Amounts reclassified to net earnings	(7)	24	(21)	65
Deferred income taxes	2	(7)	5	(17)
Amounts reclassified to net earnings, net of deferred income taxes	(5)	17	(16)	48
Other comprehensive earnings (losses), net of deferred income taxes	(5)	17	(16)	48
Ending balance	(1,452)	(1,564)	(1,452)	(1,564)
ABI [Member]
Accumulated Other Comprehensive Income [Roll Forward]
Beginning balance	(1,303)	(869)	(1,369)	(1,512)
Other comprehensive earnings (losses) before reclassifications	316	18	388	902
Deferred income taxes	(69)	(11)	(82)	(206)
Other comprehensive earnings (losses) before reclassifications, net of deferred income taxes	247	7	306	696
Amounts reclassified to net earnings	(14)	(16)	(5)	(74)
Deferred income taxes	3	3	1	15
Amounts reclassified to net earnings, net of deferred income taxes	(11)	(13)	(4)	(59)
Other comprehensive earnings (losses), net of deferred income taxes	236	(6)	302	637
Ending balance	(1,067)	(875)	(1,067)	(875)
Currency Translation Adjustments and Other [Member]
Accumulated Other Comprehensive Income [Roll Forward]
Beginning balance	41	73	34	68
Other comprehensive earnings (losses) before reclassifications	7	(16)	14	(11)
Deferred income taxes	0	0	0	0
Other comprehensive earnings (losses) before reclassifications, net of deferred income taxes	7	(16)	14	(11)
Amounts reclassified to net earnings	0	(1)	0	(1)
Deferred income taxes	0	0	0	0
Amounts reclassified to net earnings, net of deferred income taxes	0	(1)	0	(1)
Other comprehensive earnings (losses), net of deferred income taxes	7	(17)	14	(12)
Ending balance	$ 48	$ 56	$ 48	$ 56

XML

Other Comprehensive Earnings/Losses (Reclassifications) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net periodic benefit income, excluding service cost	$ (33)	$ (44)	$ (95)	$ (137)
(Income) losses from investments in equity securities	(58)	2,378	(355)	2,352
Pre-tax amounts reclassified from accumulated other comprehensive losses to net earnings	(2,166)	(224)	(6,070)	(3,074)
Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Pre-tax amounts reclassified from accumulated other comprehensive losses to net earnings	(21)	7	(26)	(10)
Benefit Plans [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net periodic benefit income, excluding service cost	(7)	24	(21)	65
Net loss [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net periodic benefit income, excluding service cost	2	33	5	94
Prior service cost/credit [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net periodic benefit income, excluding service cost	(9)	(9)	(26)	(29)
ABI [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
(Income) losses from investments in equity securities	(14)	(16)	(5)	(74)
Currency translation adjustments [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
(Income) losses from investments in equity securities	$ 0	$ (1)	$ 0	$ (1)

XML

Segment Reporting (Segment Data Schedule) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Segment Reporting Information [Line Items]
Net revenues	$ 6,281	$ 6,550	$ 18,508	$ 18,985
Amortization of intangibles	(42)	(19)	(87)	(54)	$ (73)
General corporate expenses	(63)	(78)	(551)	(192)
Operating income	3,089	3,112	8,751	9,101
Interest and other debt expense, net	272	271	758	832
Net periodic benefit income, excluding service cost	(33)	(44)	(95)	(137)
(Income) losses from investments in equity securities	(58)	2,478	(105)	3,707
Loss on Cronos-related financial instruments	0	0	0	14
Earnings before income taxes	2,908	407	8,193	4,685
Smokeable Products Segment [Member]
Segment Reporting Information [Line Items]
Net revenues	5,572	5,882	16,482	17,020
OCI	2,743	2,791	8,092	8,112
Oral Tobacco Segment [Member]
Segment Reporting Information [Line Items]
Net revenues	685	670	1,993	1,948
OCI	455	425	1,314	1,262
All Other [Member]
Segment Reporting Information [Line Items]
Net revenues	24	(2)	33	17
OCI	$ (4)	$ (7)	$ (17)	$ (27)

XML

Segment Reporting (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2023	Sep. 30, 2022
Smokeable Products Segment [Member] | Operating Segments [Member] | Non-Participating Manufacturer Arbitration Panel Decision [Member] | Operating Income (Loss) [Member] | NPM Adjustment to Cost Of Sales [Member] | PM USA [Member]
Segment Reporting Information [Line Items]
Gain (loss) related to litigation settlement	$ 15	$ 15	$ 60

XML

Segment Reporting (Schedule of Tobacco and Health and Certain Other Litigation Items) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2021
Schedule of Pre-tax Tobacco and Health Litigation Charges [Line Items]
Loss contingency accrual, provision					$ 90
Tobacco and Health Litigation Cases [Member]
Schedule of Pre-tax Tobacco and Health Litigation Charges [Line Items]
Loss contingency accrual, provision	$ 23	$ 43	$ 424	$ 101
Tobacco and Health Litigation Cases [Member] | General corporate expenses [Member]
Schedule of Pre-tax Tobacco and Health Litigation Charges [Line Items]
Loss contingency accrual, provision	10	20	348	27
Tobacco and Health Litigation Cases [Member] | Segment Reconciling Items [Member] | Interest and other debt expense, net [Member]
Schedule of Pre-tax Tobacco and Health Litigation Charges [Line Items]
Loss contingency accrual, provision	0	2	11	3
PM USA [Member] | Tobacco and Health Litigation Cases [Member] | Operating Segments [Member] | Smokeable Products Segment [Member] | Smokable Products [Member]
Schedule of Pre-tax Tobacco and Health Litigation Charges [Line Items]
Loss contingency accrual, provision	$ 13	$ 21	$ 65	$ 71

XML

Debt (Narrative) (Details) € in Millions		1 Months Ended	3 Months Ended		9 Months Ended
	Oct. 24, 2023 USD ($) period	May 31, 2023 USD ($)	Mar. 31, 2023 USD ($)	Mar. 31, 2023 EUR (€)	Sep. 30, 2023 USD ($)	Jun. 01, 2023 USD ($)	Dec. 31, 2022 USD ($)
Debt Instrument [Line Items]
Short-term borrowings					$ 0		$ 0
Carrying value					25,098,000,000		26,680,000,000
Accrued interest on long-term debt					190,000,000		$ 411,000,000
Notes Payable, Other Payables [Member] | Senior Unsecured Notes, 2.950%, Maturing May 2023 [Member]
Debt Instrument [Line Items]
Debt instrument, interest rate, stated percentage		2.95%
Repayments of senior unsecured debt		$ 218,000,000
Notes Payable, Other Payables [Member] | Euro Notes, 1.000%, Maturing First Quarter 2023 [Member]
Debt Instrument [Line Items]
Debt instrument, interest rate, stated percentage			1.00%	1.00%
Repayments of senior unsecured debt			$ 1,300,000,000	€ 1,250
Revolving Credit Facility [Member] | Line of Credit [Member] | Revolving Credit Facility Due August 2025 [Member]
Debt Instrument [Line Items]
Face amount					$ 3,000,000,000
Long-term debt, term					5 years
Debt instrument, unused borrowing capacity, amount					$ 3,000,000,000
Revolving Credit Facility [Member] | Line of Credit [Member] | Revolving Credit Facility Due October 24, 2028 [Member] | Subsequent Event [Member]
Debt Instrument [Line Items]
Long-term debt, term	5 years
Maximum borrowing capacity	$ 3,000,000,000
Line of credit facility, number of additional periods | period	2
Line of credit facility, additional period term	1 year
Debt instrument, covenant, consolidated EBITDA to interest expense ratio, minimum	4.0
Term Secured Overnight Financing Rate ("Term SOFR") [Member] | Revolving Credit Facility [Member] | Line of Credit [Member] | Revolving Credit Facility Due August 2025 [Member]
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate					1.00%
Term Loan [Member]
Debt Instrument [Line Items]
Face amount						$ 2,000,000,000

XML

Income Taxes - Summary of Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income Tax Disclosure [Abstract]
Earnings before income taxes	$ 2,908	$ 407	$ 8,193	$ 4,685
Provision for income taxes	$ 742	$ 183	$ 2,123	$ 1,611
Income tax rate	25.50%	45.00%	25.90%	34.40%

XML

Income Taxes - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2023	Dec. 31, 2022
Investments [Line Items]
Unrecognized tax benefits	$ 1,233		$ 1,233
Income tax benefit	(742)	$ (183)	(2,123)	$ (1,611)
Unrecognized tax benefits, period increase (decrease)			1,164
Unrecognized tax benefits that would impact the effective tax rate	35		35			$ 44
Unrecognized tax benefits that would impact deferred tax rate	$ 1,198		1,198			$ 25
JUUL [Member]
Investments [Line Items]
Income tax benefit			1,141
Unrecognized tax benefits, period increase (decrease)			1,173
Deferred federal income tax benefit			$ 32
Forecast [Member] | JUUL [Member]
Investments [Line Items]
Equity securities, FV-NI, ordinary gain (loss), tax basis of investments					$ 6,500
Unrecognized tax benefits					$ 1,600

XML

Income Taxes (Details) $ in Millions	9 Months Ended
	Sep. 30, 2023 USD ($)
Valuation Allowance Rollforward [Roll Forward]
Balance at beginning of year	$ 2,800
Additions to valuation allowance charged to income tax expense	76
Releases to valuation allowance credited to income tax benefit	(6)
Foreign currency translation	(2)
Additions to valuation allowance due to NJOY Transaction (no impact to earnings)	12
Reductions to valuation allowance offset to deferred tax asset (no impact to earnings)	(663)
Balance at end of period	$ 2,217

XML

Contingencies (General Information) (Details)	Sep. 30, 2023 state
Commitments and Contingencies Disclosure [Abstract]
Number of states that cap bond or require no bond	47

XML

Contingencies (Judgments Paid and Provisions for Tobacco and Health Litigation) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended		12 Months Ended		228 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022	Dec. 31, 2021	Sep. 30, 2023
Loss Contingency Accrual [Roll Forward]
Accrued liability for tobacco and health litigation items at beginning of period	$ 381	$ 25	$ 71	$ 91	$ 91
Loss contingency accrual, provision						$ 90
Payments	(31)	(13)	(122)	(137)
Accrued liability for tobacco and health litigation items at end of period	373	55	373	55	$ 71	$ 91	$ 373
Related Interest Costs [Member]
Loss Contingency Accrual [Roll Forward]
Loss contingency accrual, provision	0	2	11	3
Assets [Member] | Pending Litigation [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Security posted for appeal of judgments	34		34				34
Tobacco and Health Judgment [Member]
Loss Contingencies [Line Items]
Judgments paid							1,000
Litigation settlement interest expense (income)							241
Tobacco and Health Judgment [Member] | Tobacco and Health and Certain Other Litigation [Member]
Loss Contingency Accrual [Roll Forward]
Loss contingency accrual, provision	23	21	75	71
Engle Progeny Cases [Member]
Loss Contingencies [Line Items]
Judgments paid							439
Litigation settlement interest expense (income)							$ 60
Agreement To Resolve Shareholder Class Action | Tobacco and Health and Certain Other Litigation [Member]
Loss Contingency Accrual [Roll Forward]
Loss contingency accrual, provision	0	20	98	27
JUUL-related settlements [Member] | Tobacco and Health and Certain Other Litigation [Member]
Loss Contingency Accrual [Roll Forward]
Loss contingency accrual, provision	$ 0	$ 0	$ 240	$ 0

XML

Contingencies (Schedule of Pending Cases) (Details) $ in Millions		3 Months Ended		9 Months Ended		12 Months Ended
	Oct. 23, 2023 claim case lawsuit	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Dec. 31, 2021 USD ($)	Jun. 30, 2023 USD ($)	May 31, 2023 lawsuit	Dec. 31, 2022 USD ($)	Oct. 24, 2022 claim	Jun. 30, 2022 USD ($)	Oct. 25, 2021 claim
Loss Contingencies [Line Items]
Pre-tax charge | $		$ 373	$ 55	$ 373	$ 55	$ 91	$ 381		$ 71		$ 25
Payments | $		(31)	(13)	(122)	(137)
Loss contingency accrual, provision | $						$ 90
Individual Smoking and Health Cases [Member]
Loss Contingencies [Line Items]
Number of cases pending										161		179
Health Care Cost Recovery Actions [Member]
Loss Contingencies [Line Items]
Number of cases pending										1		1
E-vapor Litigation [Member]
Loss Contingencies [Line Items]
Number of cases pending										4,351		2,951
Loss Contingency, Number Of Patent Infringement Lawsuits | lawsuit								3
Other Tabacco-Related Cases [Member]
Loss Contingencies [Line Items]
Number of cases pending										3		3
Tobacco and Health Judgment [Member] | Tobacco and Health and Certain Other Litigation [Member]
Loss Contingencies [Line Items]
Loss contingency accrual, provision | $		23	21	75	71
Agreement To Resolve Shareholder Class Action | Tobacco and Health and Certain Other Litigation [Member]
Loss Contingencies [Line Items]
Loss contingency accrual, provision | $		$ 0	$ 20	$ 98	$ 27
Subsequent Event [Member]
Loss Contingencies [Line Items]
Loss contingency, class action lawsuit | lawsuit	17
Subsequent Event [Member] | Individual Smoking and Health Cases [Member]
Loss Contingencies [Line Items]
Number of cases pending	167
Subsequent Event [Member] | Individual Smoking and Health Cases [Member] | Pending Litigation [Member] | Illinois [Member]
Loss Contingencies [Line Items]
Number of cases pending	15
Subsequent Event [Member] | Individual Smoking and Health Cases [Member] | Pending Litigation [Member] | New Mexico [Member]
Loss Contingencies [Line Items]
Number of cases pending	17
Subsequent Event [Member] | Individual Smoking and Health Cases [Member] | Pending Litigation [Member] | Massachusetts [Member]
Loss Contingencies [Line Items]
Number of cases pending	53
Subsequent Event [Member] | Individual Smoking and Health Cases [Member] | Pending Litigation [Member] | Florida [Member]
Loss Contingencies [Line Items]
Number of cases pending	46
Subsequent Event [Member] | ETS Smoking and Health Case, Flight Attendants [Member] | Pending Litigation [Member]
Loss Contingencies [Line Items]
Number of cases | case	1,386
Subsequent Event [Member] | Health Care Cost Recovery Actions [Member]
Loss Contingencies [Line Items]
Number of cases pending	1
Subsequent Event [Member] | E-vapor Litigation [Member]
Loss Contingencies [Line Items]
Number of cases pending	5,177
Loss contingency, class action lawsuit | lawsuit	57
Subsequent Event [Member] | E-vapor Litigation [Member] | Pending Individual Lawsuits [Member]
Loss Contingencies [Line Items]
Number of cases pending	3,614
Subsequent Event [Member] | E-vapor Litigation [Member] | Pending Lawsuits Filed By State Or Local Governments [Member]
Loss Contingencies [Line Items]
Number of cases pending	1,506
Subsequent Event [Member] | E-vapor Litigation [Member] | Class Action Lawsuit [Member]
Loss Contingencies [Line Items]
Number of cases pending	57
Number of pending claims, consolidated for pre-trial purposes	32
Subsequent Event [Member] | Other Tabacco-Related Cases [Member]
Loss Contingencies [Line Items]
Number of cases pending	3
Loss contingency, number of inactive cases | case	1
Loss contingency, number of inactive class action lawsuits | case	2

XML

Contingencies (Overview of Altria and/or PM USA Tobacco-Related Litigation Narrative) (Details)		298 Months Ended
	Oct. 23, 2023 claim case	Oct. 23, 2023 case claim	Oct. 24, 2022 claim	Oct. 25, 2021 claim	Jan. 31, 2008 claim
Health Care Cost Recovery Actions [Member]
Loss Contingencies [Line Items]
Number of cases pending | claim			1	1
Engle Progeny Cases [Member]
Loss Contingencies [Line Items]
Number of cases pending | claim					9,300
Individual Smoking and Health Cases [Member]
Loss Contingencies [Line Items]
Number of cases pending | claim			161	179
E-vapor Litigation [Member]
Loss Contingencies [Line Items]
Number of cases pending | claim			4,351	2,951
Subsequent Event [Member] | Health Care Cost Recovery Actions [Member]
Loss Contingencies [Line Items]
Number of cases pending | claim	1	1
Subsequent Event [Member] | Smoking and Health Class Actions and Aggregated Claims Litigation [Member]
Loss Contingencies [Line Items]
Number of cases pending | claim	1	1
Subsequent Event [Member] | Individual Smoking and Health Cases [Member]
Loss Contingencies [Line Items]
Number of cases pending | claim	167	167
Subsequent Event [Member] | E-vapor Litigation [Member]
Loss Contingencies [Line Items]
Number of cases pending | claim	5,177	5,177
Subsequent Event [Member] | E-vapor Litigation [Member] | Canada [Member]
Loss Contingencies [Line Items]
Number of cases pending | claim	3	3
Subsequent Event [Member] | PM USA [Member] | Health Care Cost Recovery Actions [Member] | Canada [Member]
Loss Contingencies [Line Items]
Number of cases pending | claim	10	10
Subsequent Event [Member] | PM USA [Member] | Engle Progeny Cases [Member]
Loss Contingencies [Line Items]
Number of cases set for trial	2	2
Number of verdicts returned	144
Number of favorable verdicts	58
Number of unfavorable verdicts	80
Subsequent Event [Member] | PM USA [Member] | Non Engle Progeny Cases [Member]
Loss Contingencies [Line Items]
Number of verdicts returned		78
Number of favorable verdicts		48
Number of unfavorable verdicts		30
Number of claims resolved		26
Subsequent Event [Member] | PM USA [Member] | Non Engle Progeny Cases [Member] | Alaska [Member]
Loss Contingencies [Line Items]
Number of favorable verdicts		1
Subsequent Event [Member] | PM USA [Member] | Non Engle Progeny Cases [Member] | California [Member]
Loss Contingencies [Line Items]
Number of favorable verdicts		7
Subsequent Event [Member] | PM USA [Member] | Non Engle Progeny Cases [Member] | Connecticut [Member]
Loss Contingencies [Line Items]
Number of favorable verdicts		1
Subsequent Event [Member] | PM USA [Member] | Non Engle Progeny Cases [Member] | Florida [Member]
Loss Contingencies [Line Items]
Number of favorable verdicts		10
Subsequent Event [Member] | PM USA [Member] | Non Engle Progeny Cases [Member] | Louisiana [Member]
Loss Contingencies [Line Items]
Number of favorable verdicts		1
Subsequent Event [Member] | PM USA [Member] | Non Engle Progeny Cases [Member] | Massachusetts [Member]
Loss Contingencies [Line Items]
Number of favorable verdicts		6
Number of verdicts reversed		1
Subsequent Event [Member] | PM USA [Member] | Non Engle Progeny Cases [Member] | Mississippi [Member]
Loss Contingencies [Line Items]
Number of favorable verdicts		1
Subsequent Event [Member] | PM USA [Member] | Non Engle Progeny Cases [Member] | Missouri [Member]
Loss Contingencies [Line Items]
Number of favorable verdicts		4
Subsequent Event [Member] | PM USA [Member] | Non Engle Progeny Cases [Member] | New Hampshire [Member]
Loss Contingencies [Line Items]
Number of favorable verdicts		1
Subsequent Event [Member] | PM USA [Member] | Non Engle Progeny Cases [Member] | New Mexico [Member]
Loss Contingencies [Line Items]
Number of favorable verdicts		2
Subsequent Event [Member] | PM USA [Member] | Non Engle Progeny Cases [Member] | New Jersey [Member]
Loss Contingencies [Line Items]
Number of favorable verdicts		1
Subsequent Event [Member] | PM USA [Member] | Non Engle Progeny Cases [Member] | New York [Member]
Loss Contingencies [Line Items]
Number of favorable verdicts		5
Subsequent Event [Member] | PM USA [Member] | Non Engle Progeny Cases [Member] | Ohio [Member]
Loss Contingencies [Line Items]
Number of favorable verdicts		2
Subsequent Event [Member] | PM USA [Member] | Non Engle Progeny Cases [Member] | Pennsylvania [Member]
Loss Contingencies [Line Items]
Number of favorable verdicts		2
Subsequent Event [Member] | PM USA [Member] | Non Engle Progeny Cases [Member] | Rhode Island [Member]
Loss Contingencies [Line Items]
Number of favorable verdicts		1
Subsequent Event [Member] | PM USA [Member] | Non Engle Progeny Cases [Member] | Tennessee [Member]
Loss Contingencies [Line Items]
Number of favorable verdicts		2
Subsequent Event [Member] | PM USA [Member] | Non Engle Progeny Cases [Member] | West Virginia [Member]
Loss Contingencies [Line Items]
Number of favorable verdicts		2
Subsequent Event [Member] | PM USA [Member] | Individual Smoking and Health Cases [Member]
Loss Contingencies [Line Items]
Number of cases set for trial	1	1
Subsequent Event [Member] | PM USA [Member] | E-vapor Litigation [Member]
Loss Contingencies [Line Items]
Number of cases set for trial	0	0
Subsequent Event [Member] | Philip Morris USA and Altria Group [Member] | Health Care Cost Recovery Actions [Member] | Canada [Member]
Loss Contingencies [Line Items]
Number of cases pending | claim	8	8
Subsequent Event [Member] | Philip Morris USA and Altria Group [Member] | Smoking and Health Class Actions and Aggregated Claims Litigation [Member] | Canada [Member]
Loss Contingencies [Line Items]
Number of cases pending | claim	7	7

XML

Contingencies (Non-Engle Progeny Litigation) (Details) - USD ($)	3 Months Ended		12 Months Ended
	Sep. 30, 2023	Jun. 30, 2023	Dec. 31, 2021	Aug. 31, 2023	May 31, 2023	Feb. 28, 2023	Sep. 30, 2022	Feb. 28, 2021	May 31, 2020	Sep. 30, 2019
Loss Contingencies [Line Items]
Loss contingency accrual, provision			$ 90,000,000
Non-Engle Progeny Smoking And Health Case, Ricapor-Hall [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Compensatory damages awarded				$ 6,000,000
Compensatory damages awarded, reduced amount				3,000,000
Punitive damages awarded				$ 8,000,000
Non-Engle Progeny Smoking And Health Case, Deswert [Member]
Loss Contingencies [Line Items]
Loss contingency accrual, provision	$ 1,000,000
Non-Engle Progeny Smoking And Health Case, Deswert [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Compensatory damages awarded					$ 1,000,000
Loss contingency, fault allocation percentage					50.00%
Non-Engle Progeny Smoking And Health Case, Woodley [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Compensatory damages awarded						$ 5,000,000
Punitive damages awarded						$ 0
Non-Engle Progeny Smoking And Health Case, Fontaine [Member]
Loss Contingencies [Line Items]
Punitive damages awarded	$ 56,000,000
Non-Engle Progeny Smoking And Health Case, Fontaine [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Compensatory damages awarded							$ 8,000,000
Punitive damages awarded							$ 1,000,000,000
Non-Engle Progeny Smoking and Health Case, Greene [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Compensatory damages awarded								$ 2,300,000	$ 30,000,000	$ 10,000,000
Loss contingency accrual, provision		$ 48,000,000

XML

Contingencies (Engle Class Action And Engle Progeny Trial Results) (Details)		1 Months Ended
	Oct. 23, 2023 USD ($) claim case plantiff	Sep. 30, 2023 plantiff	Feb. 28, 2022 plantiff	Jul. 31, 2006	Jan. 31, 2008 claim	Jul. 31, 2000 USD ($)
Loss Contingencies [Line Items]
Number of plaintiffs | plantiff		3	4
Engle Progeny Cases [Member]
Loss Contingencies [Line Items]
Punitive damages awarded | $						$ 145,000,000,000
Number of cases pending | claim					9,300
Engle Progeny Cases [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Punitive damages awarded | $						$ 74,000,000,000
Loss contingency, period for decertified class members to file individual actions against defendants				1 year
Subsequent Event [Member] | Engle Progeny Cases [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Number of verdicts returned	144
Number of unfavorable verdicts	80
Number of claims with unfavorable verdicts pending/reversed	4
Number of favorable verdicts	58
Subsequent Event [Member] | Engle Progeny Cases, State [Member]
Loss Contingencies [Line Items]
Number of cases pending | claim	381
Number of plaintiffs | plantiff	484
Subsequent Event [Member] | Engle Progeny Cases, State [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Number of favorable verdicts	48
Subsequent Event [Member] | Engle Progeny Cases, Garcia [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Number of favorable verdicts	1
Subsequent Event [Member] | Engle Progeny Cases, Pearson, D Cohen, Collar, Chacon [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Number of verdicts reversed	2
Subsequent Event [Member] | Engle Progeny Cases, Reider and Banks [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Zero damages verdicts	2
Damages awarded, value | $	$ 0
Subsequent Event [Member] | Engle Progeny Cases, Weingart and Hancock [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Damages awarded, value | $	$ 0
Zero damages verdict modified	2
Subsequent Event [Member] | Engle Progeny Cases, Pollari and Neff [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Number of favorable verdicts	2
Subsequent Event [Member] | Engle Progeny Cases, Gloger, Rintoul and Duignam [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Number of unfavorable verdicts	2
Subsequent Event [Member] | Engle Progeny Cases, Freeman [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Number of favorable verdicts	2
Subsequent Event [Member] | Engle Progeny Cases, R. Douglas [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Number of claims dismissed | claim	1

XML

Contingencies (Engle Progeny Cases Trial Results - Pending and Concluded) (Details) - USD ($) $ in Millions	1 Months Ended
	Jan. 31, 2023	Dec. 31, 2022	Oct. 31, 2022	Aug. 31, 2022	Oct. 26, 2023	Sep. 30, 2022	Apr. 30, 2022	Sep. 30, 2021	May 31, 2021	Feb. 29, 2020	Mar. 31, 2019	Sep. 30, 2018	Jul. 31, 2018	Sep. 30, 2015
Engle Progeny Cases, Chacon [Member] | Pending Litigation [Member] | Subsequent Event [Member]
Loss Contingencies [Line Items]
Compensatory damages awarded					$ 1
Engle Progeny Cases, Chacon [Member] | Pending Litigation [Member] | PM USA [Member] | Subsequent Event [Member]
Loss Contingencies [Line Items]
Punitive damages awarded					$ 1
Engle Progeny Cases, Hoffman [Member] | Pending Litigation [Member]
Loss Contingencies [Line Items]
Compensatory damages awarded	$ 5
Engle Progeny Cases, Hoffman [Member] | Pending Litigation [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Compensatory damages awarded	3
Punitive damages awarded	0
Engle Progeny Cases, Levine [Member] | Pending Litigation [Member]
Loss Contingencies [Line Items]
Compensatory damages awarded						$ 1
Engle Progeny Cases, Levine [Member] | Pending Litigation [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Punitive damages awarded						$ 0
Engle Progeny Cases, Schertzer [Member] | Pending Litigation [Member]
Loss Contingencies [Line Items]
Compensatory damages awarded							$ 3
Engle Progeny Cases, Schertzer [Member] | Pending Litigation [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Punitive damages awarded							$ 0
Engle Progeny Cases, Lipp [Member] | Pending Litigation [Member]
Loss Contingencies [Line Items]
Compensatory damages awarded								$ 15
Engle Progeny Cases, Lipp [Member] | Pending Litigation [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Punitive damages awarded								$ 28
Engle Progeny Cases, Garcia [Member] | Pending Litigation [Member]
Loss Contingencies [Line Items]
Compensatory damages awarded									$ 6
Engle Progeny Cases, Garcia [Member] | Pending Litigation [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Compensatory damages awarded									3
Punitive damages awarded									$ 0
Engle Progeny Cases, Duignan [Member] | Pending Litigation [Member]
Loss Contingencies [Line Items]
Compensatory damages awarded										$ 3
Engle Progeny Cases, Duignan [Member] | Pending Litigation [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Compensatory damages awarded										1
Punitive damages awarded										$ 0
Engle Progeny Cases, McCall [Member] | Pending Litigation [Member]
Loss Contingencies [Line Items]
Compensatory damages awarded											$ 1
Engle Progeny Cases, McCall [Member] | Pending Litigation [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Compensatory damages awarded											1
Punitive damages awarded											$ 1
Engle Progeny Cases, Chadwell [Member] | Pending Litigation [Member]
Loss Contingencies [Line Items]
Compensatory damages awarded												$ 2
Engle Progeny Cases, Chadwell [Member] | Pending Litigation [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Punitive damages awarded												$ 0
Engle Progeny Cases, Kaplan [Member] | Pending Litigation [Member]
Loss Contingencies [Line Items]
Compensatory damages awarded													$ 2
Engle Progeny Cases, Kaplan [Member] | Pending Litigation [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Punitive damages awarded													$ 0
Engle Progeny Cases, Cooper [Member] | Pending Litigation [Member]
Loss Contingencies [Line Items]
Compensatory damages awarded														$ 5
Engle Progeny Cases, Cooper [Member] | Pending Litigation [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Compensatory damages awarded														1
Punitive damages awarded														$ 0
Engle Progeny Cases, Miller [Member] | Settled Litigation [Member]
Loss Contingencies [Line Items]
Damages awarded, value		$ 1
Engle Progeny Cases, Tuttle [Member] | Settled Litigation [Member]
Loss Contingencies [Line Items]
Damages awarded, value			$ 1
Engle Progeny Cases, Holliman [Member] | Settled Litigation [Member]
Loss Contingencies [Line Items]
Damages awarded, value	$ 3
Engle Progeny Cases, D. Brown [Member] | Settled Litigation [Member]
Loss Contingencies [Line Items]
Damages awarded, value				$ 5

XML

Contingencies (Florida Bond Statute) (Details)	Jun. 30, 2009 USD ($)
Florida [Member] | Engle Progeny Cases, State [Member]
Loss Contingencies [Line Items]
Maximum bond for all defendants	$ 200,000,000

XML

Contingencies (Other Smoking and Health Class Actions) (Details) - Smoking and Health Class Actions and Aggregated Claims Litigation [Member] $ in Billions	1 Months Ended	329 Months Ended
	Mar. 31, 2019 CAD ($) ruling manufacture	Sep. 30, 2023 case manufacture	Oct. 23, 2023 claim
Subsequent Event [Member]
Loss Contingencies [Line Items]
Number of cases pending | claim			1
PM USA [Member]
Loss Contingencies [Line Items]
Class not certified		61
Arkansas [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Class not certified		1
California [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Class not certified		1
Delaware [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Class not certified		1
District of Columbia [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Class not certified		2
Florida [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Class not certified		2
Illinois [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Class not certified		3
Iowa [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Class not certified		1
Kansas [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Class not certified		1
Louisiana [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Class not certified		1
Maryland [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Class not certified		1
Michigan [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Class not certified		1
Minnesota [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Class not certified		1
Nevada [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Class not certified		29
New Jersey [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Class not certified		6
New York [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Class not certified		2
Ohio [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Class not certified		1
Oklahoma [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Class not certified		1
Oregon [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Class not certified		1
Pennsylvania [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Class not certified		1
Puerto Rico [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Class not certified		1
South Carolina [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Class not certified		1
Texas [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Class not certified		1
Wisconsin [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Class not certified		1
Canada [Member] | Philip Morris USA and Altria Group [Member] | Subsequent Event [Member]
Loss Contingencies [Line Items]
Number of cases pending | claim			7
Canada [Member] | Canadian Tobacco Manufacturers [Member]
Loss Contingencies [Line Items]
Number of manufacturers | manufacture	3	3
Number of verdicts upheld | ruling	2
Amount awarded to other party | $	$ 13
Canada [Member] | Altria Group [Member]
Loss Contingencies [Line Items]
Number of manufacturers | manufacture	0
British Columbia and Saskatchewan [Member] | Philip Morris USA and Altria Group [Member] | Subsequent Event [Member]
Loss Contingencies [Line Items]
Number of cases pending | claim			2

XML

Contingencies (Health Care Cost Recovery Litigation) (Details)	1 Months Ended	3 Months Ended			9 Months Ended
	Nov. 30, 1998 USD ($) state	Sep. 30, 2023 USD ($) manufacture claim	Sep. 30, 2022 USD ($)	Dec. 31, 2021 USD ($)	Sep. 30, 2023 USD ($) manufacture claim	Sep. 30, 2022 USD ($)	Oct. 24, 2022 claim	Oct. 25, 2021 claim	Mar. 31, 2019 manufacture
Loss Contingencies [Line Items]
Litigation settlement				$ 90,000,000
Health Care Cost Recovery Actions [Member]
Loss Contingencies [Line Items]
Number of cases pending | claim							1	1
Number of states with settled litigation | state	46
State settlement agreements annual payments	$ 9,400,000,000
State settlement agreements attorney fees annual cap	$ 500,000,000
Litigation settlement		$ 900,000,000	$ 1,100,000,000		$ 2,800,000,000	$ 3,000,000,000
Threatened Litigation [Member] | Canada [Member] | Health Care Cost Recovery Actions [Member]
Loss Contingencies [Line Items]
Number of cases pending | claim		10			10
Canadian Tobacco Manufacturers [Member] | Canada [Member] | Smoking and Health Class Actions and Aggregated Claims Litigation [Member]
Loss Contingencies [Line Items]
Number of manufacturers | manufacture		3			3				3

XML

Contingencies (NPM Adjustment Disputes) (Details) $ in Millions	1 Months Ended			3 Months Ended						9 Months Ended		12 Months Ended		252 Months Ended	309 Months Ended
	Aug. 31, 2023 USD ($)	Nov. 30, 2022 USD ($)	Mar. 31, 2022 USD ($)	Sep. 30, 2023 USD ($)	Dec. 31, 2022 USD ($)	Sep. 30, 2022 USD ($)	Mar. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2023 USD ($) state	Sep. 30, 2022 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2018 state	Sep. 30, 2023 state
Loss Contingencies [Line Items]
Litigation settlement								$ 90
Health Care Cost Recovery Actions [Member]
Loss Contingencies [Line Items]
Litigation settlement				$ 900		$ 1,100				$ 2,800	$ 3,000
PM USA [Member] | Health Care Cost Recovery Actions [Member]
Loss Contingencies [Line Items]
Loss contingency, number of states with settled litigation including New York, subsequent expansion | state														36	38
Loss contingency, credits to offset payments										1,240
Litigation settlement, amount expected to be awarded from other party										353
PM USA [Member] | Health Care Cost Recovery Actions [Member] | Settled Litigation [Member]
Loss Contingencies [Line Items]
Loss contingency, number of additional states extended with settled litigation | state														35
PM USA [Member] | Health Care Cost Recovery Actions [Member] | Pending Litigation [Member]
Loss Contingencies [Line Items]
Loss contingency, number of additional states extended with settled litigation | state														1
PM USA [Member] | Health Care Cost Recovery Actions, 2004 NPM Adjustment [Member]
Loss Contingencies [Line Items]
Estimate of possible gain										388
PM USA [Member] | Health Care Cost Recovery Actions, 2004 NPM Adjustment [Member] | Pending Litigation [Member]
Loss Contingencies [Line Items]
Loss contingency, credits to offset payments										$ 52
Loss contingency, number of states with concluded hearings | state										9
Loss contingency, number of states not in compliance with escrow statues | state										3
Loss contingency, number of states in compliance with escrow statues | state										7
Loss contingency, damages sought, value					$ 5				$ 23
PM USA [Member] | Health Care Cost Recovery Actions, 2004 NPM Adjustment [Member] | Pending Litigation [Member] | Cost of Sales [Member]
Loss Contingencies [Line Items]
Loss contingency, reduction to cost of sales					$ 3				$ 21
PM USA [Member] | Health Care Cost Recovery Actions, 2005 NPM Adjustment [Member]
Loss Contingencies [Line Items]
Estimate of possible gain										$ 181
PM USA [Member] | Health Care Cost Recovery Actions, 2006 NPM Adjustment [Member]
Loss Contingencies [Line Items]
Estimate of possible gain										154
PM USA [Member] | Health Care Cost Recovery Actions, 2007 NPM Adjustment [Member]
Loss Contingencies [Line Items]
Estimate of possible gain										185
PM USA [Member] | Health Care Cost Recovery Actions, 2008 NPM Adjustment [Member]
Loss Contingencies [Line Items]
Estimate of possible gain										250
PM USA [Member] | Health Care Cost Recovery Actions, 2009 NPM Adjustment [Member]
Loss Contingencies [Line Items]
Estimate of possible gain										211
PM USA [Member] | Health Care Cost Recovery Actions, 2010 NPM Adjustment [Member]
Loss Contingencies [Line Items]
Estimate of possible gain										218
PM USA [Member] | Health Care Cost Recovery Actions, 2011 NPM Adjustment [Member]
Loss Contingencies [Line Items]
Estimate of possible gain										166
PM USA [Member] | Health Care Cost Recovery Actions, 2012 NPM Adjustment [Member]
Loss Contingencies [Line Items]
Estimate of possible gain										214
PM USA [Member] | Health Care Cost Recovery Actions, 2013 NPM Adjustment [Member]
Loss Contingencies [Line Items]
Estimate of possible gain										224
PM USA [Member] | Health Care Cost Recovery Actions, 2014 NPM Adjustment [Member]
Loss Contingencies [Line Items]
Estimate of possible gain										258
PM USA [Member] | Health Care Cost Recovery Actions, 2015 NPM Adjustments [Member]
Loss Contingencies [Line Items]
Estimate of possible gain										313
PM USA [Member] | Health Care Cost Recovery Actions, 2016 NPM Adjustments [Member]
Loss Contingencies [Line Items]
Estimate of possible gain										292
PM USA [Member] | Health Care Cost Recovery Actions, 2017 NPM Adjustments [Member]
Loss Contingencies [Line Items]
Estimate of possible gain										285
PM USA [Member] | Health Care Cost Recovery Actions, 2018 NPM Adjustments [Member]
Loss Contingencies [Line Items]
Estimate of possible gain										318
PM USA [Member] | Health Care Cost Recovery Actions, 2019 NPM Adjustments [Member]
Loss Contingencies [Line Items]
Estimate of possible gain										415
PM USA [Member] | Health Care Cost Recovery Actions, 2020 NPM Adjustments [Member]
Loss Contingencies [Line Items]
Estimate of possible gain										572
PM USA [Member] | Health Care Cost Recovery Actions, 2021 NPM Adjustments [Member]
Loss Contingencies [Line Items]
Estimate of possible gain										675
PM USA [Member] | Health Care Cost Recovery Actions, 2022 NPM Adjustments [Member]
Loss Contingencies [Line Items]
Estimate of possible gain										$ 571
PM USA [Member] | Health Care Cost Recovery Actions, 2005-2007 NPM Adjustment [Member] | Pending Litigation [Member]
Loss Contingencies [Line Items]
Loss contingency, number of states not settled | state										8
PM USA [Member] | Health Care Cost Recovery Actions, 2005-2007 NPM Adjustment [Member] | Pending Litigation [Member] | Period One
Loss Contingencies [Line Items]
Loss contingency, number of states not settled | state										7
Loss contingency, number of states not settled, arbitration period										3 years
PM USA [Member] | Health Care Cost Recovery Actions, 2005-2007 NPM Adjustment [Member] | Pending Litigation [Member] | Period Two
Loss Contingencies [Line Items]
Loss contingency, number of states not settled | state										1
Loss contingency, number of states not settled, arbitration period										1 year
Illinois [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Litigation settlement							$ 80
Illinois [Member] | PM USA [Member] | Health Care Cost Recovery Actions, Transition Years 2004-2021 [Member] | Settled Litigation [Member]
Loss Contingencies [Line Items]
Litigation settlement			$ 80
Illinois [Member] | PM USA [Member] | Health Care Cost Recovery Actions, Transition Years 2019-2021 [Member] | Settled Litigation [Member]
Loss Contingencies [Line Items]
Litigation settlement			$ 20
Iowa [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Litigation settlement				$ 19
Iowa [Member] | PM USA [Member] | Health Care Cost Recovery Actions, Transition Years 2005-2022 [Member] | Pending Litigation [Member]
Loss Contingencies [Line Items]
Litigation settlement	$ 19
Iowa [Member] | PM USA [Member] | Health Care Cost Recovery Actions, Transition Years 2020-2022 [Member] | Pending Litigation [Member]
Loss Contingencies [Line Items]
Litigation settlement	$ 4
New York [Member] | PM USA [Member] | Health Care Cost Recovery Actions [Member] | Settled Litigation [Member]
Loss Contingencies [Line Items]
Litigation settlement													$ 503
Montana [Member] | PM USA [Member] | Settled Litigation [Member]
Loss Contingencies [Line Items]
Litigation settlement												$ 4
New Mexico [Member] | PM USA [Member] | Pending Litigation [Member]
Loss Contingencies [Line Items]
Loss contingency, damages sought, value		$ 84

XML

Contingencies (Other Disputes Under the State Settlement Agreements) (Details) $ in Millions	1 Months Ended
	Jan. 31, 2021 USD ($)
PM USA [Member] | Other Disputes Under the State Settlement Agreements [Member]
Loss Contingencies [Line Items]
Amount ordered to be paid from other party	$ 32

XML

Contingencies (Federal Government's Lawsuit) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Loss Contingencies [Line Items]
Loss contingency accrual, provision		$ 90
Implementation of Corrective Communications [Member]
Loss Contingencies [Line Items]
Loss contingency accrual, provision	$ 28

XML

Contingencies (E-vapor Product Litigation and IQOS Litigation) (Details)	1 Months Ended					3 Months Ended
	Aug. 31, 2023 USD ($)	Jun. 30, 2023 USD ($)	May 31, 2023 USD ($) claim thirdPartyClaim	Sep. 30, 2022 USD ($)	Apr. 30, 2020 USD ($)	Dec. 31, 2021 USD ($)	Oct. 23, 2023 claim lawsuit	Jan. 31, 2023	Oct. 24, 2022 claim	Oct. 25, 2021 claim
Loss Contingencies [Line Items]
Litigation settlement | $						$ 90,000,000
E-vapor Litigation [Member]
Loss Contingencies [Line Items]
Number of cases pending									4,351	2,951
Litigation settlement | $			$ 235,000,000
Loss contingency, number of third party cases not subject to settlement agreement | thirdPartyClaim			35
Loss contingency, number of class action lawsuits pending not subject to settlement agreement			3
Loss contingency, number of putative class action antitrust lawsuits not subject to settlement agreement			17
Damages awarded, value | $	$ 10,000,000
Judgments paid | $	$ 10,000,000
Loss contingency, damages recoverable, value | $		$ 0
IQOS [Member]
Loss Contingencies [Line Items]
Damages awarded, value | $				$ 95,000,000
Loss contingency, damages recoverable, value | $					$ 0
Loss contingency, royalty fee percentage								5.25%
Subsequent Event [Member] | E-vapor Litigation [Member]
Loss Contingencies [Line Items]
Number of cases pending							5,177
Number of third party lawsuits | lawsuit							4
Subsequent Event [Member] | E-vapor Litigation [Member] | Canada [Member]
Loss Contingencies [Line Items]
Number of cases pending							3
Class Action Lawsuit [Member] | Subsequent Event [Member] | E-vapor Litigation [Member]
Loss Contingencies [Line Items]
Number of cases pending							57
Number of pending claims, consolidated for pre-trial purposes							32
Pending Individual Lawsuits [Member] | Subsequent Event [Member] | E-vapor Litigation [Member]
Loss Contingencies [Line Items]
Number of cases pending							3,614
Pending Lawsuits Filed By State Or Local Governments [Member] | Subsequent Event [Member] | E-vapor Litigation [Member]
Loss Contingencies [Line Items]
Number of cases pending							1,506
Pending Class Action Lawsuit [Member] | Subsequent Event [Member] | E-vapor Litigation [Member] | Canada [Member]
Loss Contingencies [Line Items]
Number of cases pending							3

XML

Contingencies (Antitrust Litigation and Shareholder Class Action and Shareholder Derivative Lawsuits) (Details) $ in Millions	1 Months Ended					3 Months Ended	12 Months Ended
	Sep. 30, 2023 USD ($) plantiff	Apr. 30, 2023 USD ($)	Oct. 31, 2022 USD ($)	Feb. 28, 2022 plantiff	Jan. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Oct. 23, 2023 lawsuit	Jun. 30, 2023 USD ($)	Mar. 31, 2023 USD ($)	Sep. 30, 2022 USD ($)	Jun. 30, 2022 USD ($)	Nov. 30, 2020 complaint	Apr. 30, 2020
Loss Contingencies [Line Items]
Loss contingency, number of complaints | complaint														3
Number of plaintiffs | plantiff	3			4
Litigation settlement						$ 90
Loss contingency accrual, provision								$ 90
Payments for legal settlements					$ 90
Pre-tax charge	$ 373					$ 91	$ 71	$ 91		$ 381		$ 55	$ 25
Subsequent Event [Member]
Loss Contingencies [Line Items]
Loss contingency, class action lawsuit | lawsuit									17
Federal And State Shareholder Derivative Lawsuits [Member]
Loss Contingencies [Line Items]
Loss contingency accrual, provision							$ 27
Loss contingency, settlement funding amount			$ 100
Loss contingency, settlement funding period			5 years
Judgments paid		$ 15
Pre-tax charge											$ 100
JUUL [Member]
Loss Contingencies [Line Items]
Equity securities, ownership percentage															35.00%

XML

Contingencies (Lights/Ultra Lights Cases) (Details) - Subsequent Event [Member]	Oct. 23, 2023 claim court case
Lights [Member]
Loss Contingencies [Line Items]
Claims not certified, number | case	23
Number of cases pending	2
Lights [Member] | PM USA [Member]
Loss Contingencies [Line Items]
Number of state courts | court	21
Smoking and Health Class Actions and Aggregated Claims Litigation [Member]
Loss Contingencies [Line Items]
Number of cases pending	1

XML

Contingencies (UST Litigations Narrative) (Details)	Oct. 23, 2023 claim
Pending Individual Lawsuits [Member] | Subsequent Event [Member] | UST Litigation [Member]
Loss Contingencies [Line Items]
Number of cases pending	0

XML

Contingencies (Guarantees and Other Similar Matters (Details)	Sep. 30, 2023 USD ($)
Loss Contingencies [Line Items]
Contingent liability related to performance surety bonds	$ 22,000,000
Credit Agreement [Member] | Revolving Credit Facility Due October 24, 2028 [Member]
Loss Contingencies [Line Items]
Maximum borrowing capacity	3,000,000,000
Letter of Credit [Member]
Loss Contingencies [Line Items]
Maximum borrowing capacity	$ 44,000,000

XML

Label	Element	Value
Restricted Cash, Noncurrent	us-gaap_RestrictedCashNoncurrent	$ 46,000,000
Restricted Cash, Current	us-gaap_RestrictedCashCurrent	$ 15,000,000

[1] Restricted cash consisted primarily of cash deposits collateralizing appeal bonds posted by PM USA to obtain stays of judgments pending appeals. See Note 13. Contingencies.