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(1) On January 28, 2022, we entered into an agreement, effective February 10, 2022, to amend and extend the term of our $2.0 billion multi-year revolving credit facility, for an additional year covering the period February 11, 2026 to February 10, 2027, in the amount of $1.9 billion.
(2) Includes business transformation-linked pricing adjustments that may result in the reduction or increase in both the interest rate and commitment fee under the credit agreement if PMI achieves, or fails to achieve, certain specified targets based on its business transformation goals.
(3) On September 20, 2022, we entered into an agreement, effective September 29, 2022, to amend and extend the term of our $2.5 billion multi-year revolving credit facility, for an additional year covering the period September 30, 2026 to September 29, 2027, in the amount of $2.3 billion. On September 20, 2023, PMI entered into an agreement, effective September 29, 2023, to amend and further extend the term to September 29, 2028.
At February 6, 2025, there were no borrowings under the committed revolving credit facilities, and the entire committed amounts were available for borrowing.
All banks participating in our committed revolving credit facilities have an investment-grade long-term credit rating from the credit rating agencies. We continuously monitor the credit quality of our banking group, and at this time we are not aware of any potential non-performing credit provider.
These committed revolving credit facilities do not include any credit rating triggers, material adverse change clauses or any provisions that could require us to post collateral. We expect to continue to meet our covenants.
In addition to the committed revolving credit facilities discussed above, PMI maintains certain short-term credit arrangements, including uncommitted credit lines, to primarily meet working capital needs. These credit arrangements amounted to approximately $2.1 billion at December 31, 2024 and approximately $2.7 billion at December 31, 2023. Borrowings under these arrangements and other bank loans amounted to $137 million at December 31, 2024, and $283 million at December 31, 2023.
Term Loan Facility related to the Financing of the Swedish Match Acquisition – On June 23, 2022, PMI entered into a €5.5 billion (approximately $5.8 billion at the date of signing) senior unsecured term loan credit agreement consisting of a €3.0 billion (approximately $3.2 billion at the date of signing) tranche expiring three years after the occurrence of certain events and a €2.5 billion (approximately $2.6 billion at the date of signing) tranche expiring on June 23, 2027.
On November 7, 2022, PMI delivered notices of borrowing for advances totaling €5.5 billion under the term loan facility, of which €3.0 billion would become due on November 9, 2025, and €2.5 billion would become due on June 23, 2027, unless prepaid pursuant to the terms of the credit agreement.
On November 21, 2024, PMI prepaid approximately €3 billion (approximately $3.2 billion), including outstanding principal and accrued interest, representing all borrowings outstanding under the 3-year tranche of the senior unsecured term loan facility. As of December 31, 2024, borrowings in the amount of €2.5 billion (approximately $2.6 billion) under the 5-year tranche of the term loan facility remained outstanding.
Commercial Paper Program – We continue to have access to liquidity in the commercial paper market through programs in place in the U.S. and in Europe having an aggregate issuance capacity of $8.0 billion. At December 31, 2024, we had no commercial paper
outstanding. At December 31, 2023, we had $1.7 billion of commercial paper outstanding. The average commercial paper balance outstanding during 2024 and 2023 was $1.3 billion and $3.6 billion, respectively.
Sale of Accounts Receivable – To mitigate credit risk and enhance cash and liquidity management, we sell trade receivables to unaffiliated financial institutions. For further details, see Item 8, Note 19. Sale of Accounts Receivable to our consolidated financial statements.
Supply Chain Financing – We engage with unaffiliated global financial institutions that offer a voluntary supply chain financing program to some of our suppliers. For further details, see Item 8, Note 22. Supply Chain Financing to our consolidated financial statements.
Debt – Our total debt was $45.7 billion at December 31, 2024, and $47.9 billion at December 31, 2023. Our total debt is primarily fixed rate in nature. The weighted-average all-in financing cost of our total debt was 3.5% in 2024 and 3.3% in 2023. For further details, including the fair value of our debt, see Item 8, Note 8. Indebtedness. The amount of debt that we can issue is subject to approval by our Board of Directors.
On February 10, 2023, we filed a shelf registration statement with the U.S. Securities and Exchange Commission, under which we may from time to time sell debt securities and/or warrants to purchase debt securities over a three-year period.
Our debt issuances in 2024 were as follows:
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| Type | | Face Value | | Interest Rate | | Issuance | | Maturity |
| U.S. dollar notes | (a) | $750 | | 4.750% | | February 2024 | | February 2027 |
| U.S. dollar notes | (a) | $1,000 | | 4.875% | | February 2024 | | February 2029 |
| U.S. dollar notes | (a) | $1,250 | | 5.125% | | February 2024 | | February 2031 |
| U.S. dollar notes | (a) | $1,750 | | 5.250% | | February 2024 | | February 2034 |
| Euro notes | (b) (c) | €500 (approximately $543) | | 3.750% | | June 2024 | | January 2031 |
| U.S. dollar notes | (d) | $750 | | 4.375% | | November 2024 | | November 2027 |
| U.S. dollar notes | (d) | $750 | | 4.625% | | November 2024 | | November 2029 |
| U.S. dollar notes | (d) | $750 | | 4.750% | | November 2024 | | November 2031 |
| U.S. dollar notes | (d) | $750 | | 4.900% | | November 2024 | | November 2034 |
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(a) Interest is payable semi-annually, commencing in August 2024
(b) Interest is payable annually, commencing in January 2025
(c) USD equivalents for foreign currency notes were calculated based on exchange rates on the date of issuance.
(d) Interest is payable semi-annually, commencing in May 2025
The net proceeds from the sale of the securities listed in the table above were primarily used for general corporate purposes, including working capital requirements, repayment of commercial paper and to refinance certain of our outstanding notes. On November 21, 2024, PMI financed the prepayment of the 3-year tranche of the senior unsecured term loan facility with the proceeds of the November 2024 bond issuances and cash on hand.
The weighted-average time to maturity of our long-term debt was approximately 7 years at the end of 2024 and 2023.
Cash Requirements – At December 31, 2024, our material short-term and long-term cash requirements for various contractual obligations and commitments primarily consisted of the following:
•principal payments related to long-term debt and the associated interest payments. For further details, see Item 8, Note 8. Indebtedness to our consolidated financial statements;
•accounts payable and accrued liabilities on our consolidated balance sheet (primarily short-term in nature);
•purchase obligations for inventory and production costs to be utilized in the normal course of business such as raw materials, electronic devices, indirect materials and supplies, packaging, co-manufacturing arrangements, storage and distribution, as well as capital expenditures. These purchase obligations are expected to be approximately $3.0 billion in 2025 and approximately $1.7 billion for years beyond; and
•operating lease liabilities, on an undiscounted basis, which were included in our consolidated balance sheets. For further details, see Item 8, Note 21. Leases to our consolidated financial statements.
•Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements, including special purpose entities, other than guarantees, and cash requirements discussed above.
Guarantees – At December 31, 2024, we have guarantees of our own performance, which are primarily related to excise taxes on the shipment of our products. There is no liability in the consolidated financial statements associated with these guarantees. These guarantees have not had, and are not expected to have, a significant impact on PMI’s liquidity.
In August 2024, PMI entered into a guarantee agreement for an equity investee. For further details, see Item 8, Note 6. Related Parties – Equity Investments and Other.
Swedish Match Notes Consent Solicitation and PMI Guarantee – On June 15, 2023, our wholly owned subsidiary, Swedish Match AB ("Swedish Match"), initiated a public consent solicitation of eligible holders of certain outstanding series of its notes to amend certain terms and conditions of these respective notes. The eligible noteholders provided the requisite irrevocable consent instructions voting in favor of the amendments, which were subsequently passed by way of extraordinary resolution at the noteholders’ meeting held on July 28, 2023. As a result of the passage of the extraordinary resolution, Philip Morris International Inc. entered into a guarantee, which guarantees unconditionally and irrevocably to the noteholders the punctual payment when due, whether at stated maturity, by acceleration or otherwise, of the principal, premium, if any, and interest on the notes.
Equity and Dividends
We discuss our stock awards as of December 31, 2024, in Item 8, Note 10. Stock Plans to our consolidated financial statements.
On June 11, 2021, our Board of Directors authorized a share repurchase program of up to $7 billion, with target spending of $5 billion to $7 billion over a three-year period. On July 22, 2021, we began repurchasing shares under this share repurchase program. On May 11, 2022, we announced the suspension of our three-year share repurchase program following the recommended public offer to acquire the outstanding shares of Swedish Match from its shareholders. We did not make any share repurchases in 2023 and 2024. Our three-year share repurchase program expired on July 21, 2024.
Dividends paid in 2024 were $8.2 billion. During the third quarter of 2024, our Board of Directors approved a 3.8% increase in the quarterly dividend to $1.35 per common share. As a result, the present annualized dividend rate is $5.40 per common share.
Market Risk
Counterparty Risk - We predominantly work with financial institutions with strong short- and long-term credit ratings as assigned by Standard & Poor’s and Moody’s. These banks are also part of a defined group of relationship banks. Non-investment grade institutions are only used in certain emerging markets to the extent required by local business needs. We have a conservative approach when it comes to choosing financial counterparties and financial instruments. As such we do not invest or hold investments in any structured or equity-linked products. The majority of our cash and cash equivalents is currently invested with maturities of less than 30 days.
We continuously monitor and assess the credit worthiness of all our counterparties.
Derivative Financial Instruments - We operate globally with manufacturing and sales facilities in various locations around the world. Consequently, we use certain financial instruments to manage our foreign currency and interest rate exposure. We use derivative financial instruments principally to reduce our exposure to market risks resulting from fluctuations in foreign exchange and interest rates by creating offsetting exposures. We are not a party to leveraged derivatives and, by policy, do not use derivative financial instruments for speculative purposes.
See Item 8, Note 16. Financial Instruments to our consolidated financial statements for further details on our derivative financial instruments and the related collateral arrangements.
Value at Risk - We use a value at risk computation to estimate the potential one-day loss in the fair value of our interest-rate-sensitive and foreign currency price-sensitive derivative financial instruments, representing the majority of our derivative financial instruments exposure. This computation includes our debt and foreign currency forwards, swaps and options. Anticipated transactions, foreign currency trade payables and receivables, and net investments in foreign subsidiaries, which the foregoing instruments are intended to hedge, were excluded from the computation.
The computation estimates were made assuming normal market conditions, using a 95% confidence interval and a one-day holding period using a "parametric delta-gamma" approximation technique to determine the observed interrelationships between movements in interest rates and various currencies and in calculating the risk of the underlying positions in the portfolio. These interrelationships were determined by observing interest rate and forward currency rate movements primarily over the preceding quarter for determining value at risk at December 31, 2024 and 2023, and primarily over each of the four preceding quarters for the calculation of average, high and low value at risk amounts during each year.
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| Fair Value Impact |
(in millions) | At December 31, 2024 | | Average | | High | | Low |
Instruments sensitive to: | | | | | | | |
Foreign currency rates | $130 | | $92 | | $130 | | $69 |
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Interest rates | $221 | | $233 | | $272 | | $200 |
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| Fair Value Impact |
(in millions) | At December 31, 2023 | | Average | | High | | Low |
Instruments sensitive to: | | | | | | | |
Foreign currency rates | $77 | | $74 | | $82 | | $66 |
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Interest rates | $297 | | $332 | | $505 | | $219 |
Year-over-year increases of the impact of foreign currency rates and decreases of the impact of interest rates on the value at risk computation above was primarily due to higher foreign currency volatility and lower interest rate volatility in 2024 compared to 2023.
The value at risk computation is a risk analysis tool designed to statistically estimate the maximum probable daily loss from adverse movements in interest and foreign currency rates under normal market conditions. The computation does not purport to represent actual losses in fair value or earnings to be incurred by us, nor does it consider the effect of favorable changes in market rates. We cannot predict actual future movements in such market rates and do not present these results to be indicative of future movements in market rates or to be representative of any actual impact that future changes in market rates may have on our future results of operations or financial position.
Contingencies
See Item 3 and Item 8, Note 18. Contingencies to our consolidated financial statements for a discussion of contingencies.
Cautionary Factors That May Affect Future Results
Forward-Looking and Cautionary Statements
We may from time to time make written or oral forward-looking statements, including statements contained in filings with the SEC, in reports to stockholders and in press releases and investor webcasts. You can identify these forward-looking statements by use of words such as "strategy," "expects," "continues," "plans," "anticipates," "believes," "will," "aspires," "estimates," "intends," "projects," "aims," "goals," "targets," "forecasts" 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 and assumptions. Our SFPs constitute a relatively new product category that is less predictable than our mature cigarette business.
Achievement of future results is subject to risks, uncertainties and inaccurate assumptions. Should known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated or projected. Investors should bear this in mind as they consider 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 to differ materially from those contained in any forward-looking statements made by us; any such statement is qualified by reference to the following cautionary statements. We elaborate on these and other risks we face throughout this document, particularly in Item 1A. Risk Factors and Business Environment of this section. You should understand that it is not possible to predict or identify all risk factors. Consequently, you should not consider the following to be a complete discussion of all potential risks or uncertainties. We do not undertake to update any forward-looking statement that we may make from time to time, except in the normal course of our public disclosure obligations.
Item 7A.Quantitative and Qualitative Disclosures About Market Risk.
The information called for by this Item is included in Item 7, Market Risk.
Item 8.Financial Statements and Supplementary Data.
Consolidated Statements of Earnings
(in millions of dollars, except per share data)
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for the years ended December 31, | 2024 | | 2023 | | 2022 |
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Net revenues 1 & 2 (Notes 6 & 13) | $ | | | | $ | | | | $ | | |
Cost of sales (Notes 4 & 5) | | | | | | | | |
Gross profit | | | | | | | | |
Marketing, administration and research costs (Notes 3, 4, 5, 13 & 20) | | | | | | | | |
Impairment of goodwill (Note 5) | | | | | | | | |
Operating income | | | | | | | | |
Interest expense, net (Note 15) | | | | | | | | |
Pension and other employee benefit costs (Note 14) | | | | | | | | |
Earnings before income taxes | | | | | | | | |
Provision for income taxes (Note 12) | | | | | | | | |
Impairment related to the RBH equity investment (Note 6) | | | | | | | | |
Equity investments and securities (income)/loss, net | () | | | () | | | () | |
Net earnings | | | | | | | | |
Net earnings attributable to noncontrolling interests | | | | | | | | |
Net earnings attributable to PMI | $ | | | | $ | | | | $ | | |
Per share data (Note 11): | | | | | |
Basic earnings per share | $ | | | | $ | | | | $ | | |
Diluted earnings per share | $ | | | | $ | | | | $ | | |
(1) million, $ million and $ million for the years ended December 31, 2024, 2023 and 2022, respectively
(2) million, $ million and $ million, respectively
See notes to consolidated financial statements.
Consolidated Statements of Comprehensive Earnings
(in millions of dollars)
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| for the years ended December 31, | 2024 | | 2023 | | 2022 |
| Net earnings | $ | | | | $ | | | | $ | | |
| Other comprehensive earnings (losses), net of income taxes: | | | | | |
Change in currency translation adjustments: | | | | | |
Unrealized gains (losses), net of income taxes of $() in 2024, $ in 2023 and $() in 2022 | () | | | () | | | () | |
(Gains)/losses transferred to earnings, net of income taxes of $ in 2024, $ in 2023 and 2022 (Notes 3, 17 & 20) | | | | | | | | |
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Change in net loss and prior service cost: | | | | | |
Net gains (losses) and prior service costs, net of income taxes of $ in 2024, $ in 2023 and $() in 2022 | () | | | () | | | | |
Amortization of net losses, prior service costs and net transition costs, net of income taxes of $() in 2024, $() in 2023 and $() in 2022 | | | | | | | | |
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Change in fair value of derivatives accounted for as hedges: | | | | | |
Gains (losses) recognized, net of income taxes of $() in 2024, $() in 2023 and $() in 2022 | | | | | | | | |
(Gains) losses transferred to earnings, net of income taxes of $ in 2024, $ in 2023 and $ in 2022 | () | | | () | | | () | |
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| Total other comprehensive earnings (losses) | | | | () | | | | |
Total comprehensive earnings | | | | | | | | |
| Less comprehensive earnings attributable to: | | | | | |
Noncontrolling interests | | | | | | | | |
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See notes to consolidated financial statements.
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| for the years ended December 31, | 2024 | | 2023 | | 2022 |
| CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | | | | | |
| Short-term borrowing activity by original maturity: | | | | | |
| Net issuances (repayments) - maturities of 90 days or less | $ | () | | | $ | | | | $ | | |
| Issuances - maturities longer than 90 days | | | | | | | | |
| Repayments - maturities longer than 90 days | () | | | () | | | () | |
| Borrowings under credit facilities related to Swedish Match AB acquisition | | | | | | | | |
| Repayments under credit facilities related to Swedish Match AB acquisition | () | | | () | | | () | |
| Long-term debt proceeds | | | | | | | | |
| Long-term debt repaid | () | | | () | | | () | |
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The total fair value step-up adjustment for inventories was $ million, of which $ million was recognized in cost of sales in the fourth quarter of 2022 and the remaining balance in the first quarter of 2023.
The fair value of long-term debt was primarily determined using readily available market prices as of the acquisition date and the total purchase price adjustment of $() million is being amortized as an increase to interest expense, net over the lives of the related debt.
Goodwill is primarily attributable to future growth opportunities, anticipated synergies in the U.S. and intangible assets that did not qualify for separate recognition. The goodwill is not deductible for income tax purposes.
| | Trademarks | Amortizable | - years | | |
| Developed technology, including patents | | years | | |
| Customer relationships | | - years | | |
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| Total identifiable intangible assets | | | $ | | |
The significant assumptions used in determining the fair values of the identifiable intangible assets included royalty rates, revenue growth rates, profit margins, customer attrition rates and discount rates.
Trademarks primarily relate to $ million for the ZYN trademark, which has been determined to have an indefinite life due to the fast growth and the leading position of the brand in the U.S. market. All other trademarks have been determined to have a useful life ranging between - years. The trademarks have been valued using the relief from royalty method supported by revenue growth rate assumptions and royalty rates disaggregated at the individual trademark level.
Developed technology, including patents, relates to the nicotine pouch technology of $ million. These patents have been assigned a useful life of years, which is in line with their protection period and have been valued using the comparable transactions and income methods.
Customer relationships have been valued by categories of customers and geographic locations, namely the U.S. market, Scandinavia, and other markets using the multiple periods excess earnings method. The significant assumptions included customer attrition rates disaggregated at the customer category level, the revenue growth rates, as well as profit margins.
PMI consolidated statements of earnings for the year ended December 31, 2022, include $ million of net revenues and $() million of net losses associated with the results of operations of Swedish Match from the acquisition date to December 31, 2022. The operating results of Swedish Match are included in the Europe and Americas segments.
Acquisition related transaction costs, which were comprised primarily of regulatory, financial advisory and legal fees, totaled $ million for the year ended December 31, 2022, and were included in marketing, administration and research costs in the consolidated statements of earnings. Bridge and term loan credit agreement related fees associated with the issuance of debt amounted to $ million, of which $ million were capitalized at the acquisition date. The fair value of the noncontrolling interest was based on the tender offer as of the acquisition date.
Under the EU Merger Regulation, approval by the European Commission of PMI's acquisition of Swedish Match was conditional on PMHH's divestiture of Swedish Match's subsidiary, SMD Logistics AB ("SMDL"), following the completion of the offer to tender all shares in Swedish Match to PMHH. As a result, these assets were accounted for as assets held for sale and included within other current assets and other accrued liabilities in PMI’s consolidated balance sheets at March 31, 2023 and December 31, 2022. PMI subsequently sold SMDL on June 30, 2023 and the transaction did not have a material impact on the consolidated statements of earnings for the year ended December 31, 2023.
The unaudited pro forma combined financial information was prepared using the acquisition method of accounting and was based on the historical financial information of PMI and Swedish Match. In order to reflect the occurrence of the acquisition on January 1, 2021, as required, the unaudited pro forma financial information includes adjustments to reflect the following:
•incremental amortization expense to be incurred based on the current fair values of the identifiable intangible assets acquired;
•incremental cost of products sold related to the fair value adjustments associated with acquisition date inventory;
•additional interest expense associated with the issuance of debt to finance the acquisition, including the effects of the related derivative financial instruments designated to hedge interest rate risks as well as economic hedges;
•reclassification of non-recurring acquisition-related costs incurred during the year ended December 31, 2022, to the year ended December 31, 2021;
•impact of a deferred tax cost of $ million in 2022 and $ million in 2021 related to the theoretical unrealized foreign currency gains on intercompany loans related to the acquisition financing. These theoretical unrealized pre-tax foreign currency movements were fully offset in the consolidated statements of earnings and were reflected as currency translation adjustments in
| | Net earnings attributable to PMI | $ | | |
Transactions With Noncontrolling Interests
Turkey – In the first quarter of 2022, PMI acquired the remaining % stake of its holding in Philip Morris Tütün Mamulleri Sanayi ve Ticaret A.Ş. ("PMTM") (formerly Philsa Philip Morris Sabanci Sigara ve Tütüncülük Sanayi ve Ticaret A.Ş.) and % stake in Philip Morris Pazarlama ve Satiş A.Ş. ("PMPS") (formerly Philip Morris SA, Philip Morris Sabanci Pazarlama ve Satiş A.Ş.) from its Turkish partners, Sabanci Holding for a total acquisition price including transaction costs and remaining dividend entitlements of approximately $ million. As a result of this acquisition, PMI owned % of these Turkish subsidiaries as of December 31, 2022. The purchase of the remaining stakes in these holdings resulted in a decrease to PMI's additional paid-in capital of $ million and an increase to accumulated other comprehensive losses of $ million primarily following the reclassification of accumulated currency translation losses from noncontrolling interests to PMI’s accumulated other comprehensive losses during the first quarter of 2022.
million, including transaction costs and dividend entitlements. The sale resulted in an increase to PMI's additional paid-in capital of $ million and a decrease to accumulated other comprehensive losses of $ million, following the reclassification of accumulated other comprehensive losses from PMI’s accumulated other comprehensive losses to noncontrolling interests.
million in a new production facility in the Lviv region, in Western Ukraine. In the fourth quarter of 2023, as a result of the completion of certain preparatory work for this new production facility, PMI recorded impairment of certain long-lived assets. The new production facility was completed at the end of the first quarter of 2024 and local production commenced in April 2024. As of December 31, 2024, PMI’s Ukrainian operations had approximately $ million in total assets, excluding intercompany balances. These total assets included $ million and $ million in receivables and inventories, respectively.
billion in total assets, excluding intercompany balances. These total assets included $ million, $ million, $ million, $ million and $ million in cash (primarily held in local currency), receivables, inventories, property, plant and equipment and goodwill, respectively. In addition, there was approximately $ million of cumulative foreign currency translation losses reflected in accumulated other comprehensive losses in the consolidated statement of stockholders’ equity as of December 31, 2024. Additionally, we hold a % equity interest in JSC TK Megapolis, PMI's distributor in Russia. For further details, see Note 6. Related Parties – Equity Investments and Other.
For the year ended December 31, 2024, PMI did not incur charges related to circumstances driven by the war.
| $ | | | $ | | | | $ | | | $ | | | $ | | | | | |
Russia 2 | | | | | | | | | | | | | | | | |
| Total | $ | | | $ | | | $ | | | | $ | | | $ | | | $ | | | | | | 1 The 2023 pre-tax charges were primarily due to the cost of PMI’s humanitarian efforts, which includes salary continuation for its employees, severance payments, as well as an impairment of certain long-lived assets in the fourth quarter of 2023. The 2022 pre-tax charges were primarily due to an inventory write-down, additional allowance for receivables and the cost of PMI’s humanitarian efforts, which includes salary continuation for its employees.
2 The 2022 pre-tax charges were primarily due to machinery and inventory write downs related to the commercial decisions noted above.
PMI will continue to monitor the situation as it evolves and will determine if further charges are needed.
| $ | | | $ | | | $ | | | $ | | | $ | | |
| Changes due to: | | | | | | |
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| Impairment | | | | | | | | | () | | () | |
| Currency | | | | | () | | | | | | | |
| Measurement period adjustments | () | | | | | | () | | | | () | |
| Balances, December 31, 2023 | | | | | | | | | | | | |
| Changes due to: | | | | | | |
| Acquisitions and divestitures | | | | | | | | | () | | | |
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| Currency | () | | () | | () | | () | | () | | () | |
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| Balances, December 31, 2024 | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | |
As discussed in Note 1. Background and Basis of Presentation, PMI updated in January 2024 its segment reporting by including the former Swedish Match segment results into its existing geographical segments. As a result, the January 1, 2023 and December 31, 2023 goodwill balances in the table above included the reclassifications of the former Swedish Match segment to the Europe and Americas segments.
The decrease in goodwill in 2023 was primarily due to the measurement period adjustments to the Swedish Match final purchase price allocation (see Note 3, Acquisitions and Divestitures), coupled with the impairment discussed below and partially offset by currency movements.
The decrease in goodwill in 2024 was due to currency movements and goodwill allocated to disposal group in relation to Vectura Group' sale, partially offset by the preliminary purchase price allocation of PMI's acquisition in Egypt of United Tobacco Company in the second quarter of 2024. For further details on the acquisition in Egypt and Vectura Group's sale, see Note 3. Acquisitions and Divestitures.
At December 31, 2024, goodwill primarily reflects PMI’s acquisitions of Swedish Match AB and Fertin Pharma A/S, as well as acquisitions in Egypt, Greece, Indonesia, Mexico, the Philippines and Serbia.
| | $ | | | | $ | | | | $ | | | | Amortizable intangible assets: | | | | | | | | |
| Trademarks | years | | | $ | | | | | | | | $ | | | | |
Reacquired commercialization rights for IQOS in the U.S. | years | | | | | | | | | | | | | |
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| Developed technology, including patents | years | | | | | | | | | | | | | |
| Customer relationships and other | years | | | | | | | | | | | | | |
| Total other intangible assets | | $ | | | $ | | | $ | | | | $ | | | $ | | | $ | | |
Non-amortizable intangible assets substantially consist of the ZYN trademarks and other trademarks related to acquisitions in Indonesia and Mexico, as well as the tobacco manufacturing license associated with the preliminary purchase price allocation of PMI's acquisition in Egypt in the second quarter of 2024 (see Note 3. Acquisitions and Divestitures for further details). The decrease since December 31, 2023, was mainly due to currency movements of $ million and a pre-tax impairment charge in the first quarter of 2024 of $ million primarily for an in-process research and development project in the Wellness and Healthcare segment. The pre-tax impairment charge of $ million was recorded in marketing, administration and research costs on PMI's consolidated statements of earnings for the year ended December 31, 2024. The decrease was partially offset by the recognition of the Egyptian tobacco manufacturing license.
The increase in the gross carrying amount of amortizable intangible assets from December 31, 2023, was primarily due to the classification of the IQOS commercialization rights in the U.S. on the acquisition date (May 1, 2024) as Other intangible assets, net (see Note 3. Acquisitions and Divestitures), partially offset by developed technology assets of $ million allocated to disposal group in relation to Vectura Group's sale (see Note 3. Acquisitions and Divestitures) and currency movements of $ million.
The change in the accumulated amortization from December 31, 2023, was mainly due to the 2024 amortization of $ million, partially offset by accumulated amortization of developed technology assets of $ million allocated to disposal group in relation to Vectura Group's sale and currency movements of $ million. The amortization of intangibles for the year ended December 31, 2024 was recorded in cost of sales ($ million) and in marketing, administration and research costs ($ million) on PMI's consolidated statements of earnings.
Amortization expense on a pre-tax basis for each of the next five years is estimated to be approximately $ million or less, assuming no additional transactions occur that require the amortization of intangible assets. This amount includes amortization of IQOS commercialization rights in the U.S. (see Note 3, Acquisitions and Divestitures).
impairment charges were required. Each of PMI's reporting units had fair values substantially in excess of their carrying values with the exception of the Wellness & Healthcare reporting unit, which had less than % excess of fair value over its carrying value. PMI will continue to monitor this reporting unit as any changes in assumptions and estimates, unfavorable clinical trial results, failure to obtain regulatory approvals or other market factors could result in additional future goodwill and other intangible asset impairments. In addition, there are still risks related to PMI’s Russian reporting unit’s assets as the fair value of these assets is difficult to predict due to the current economic, political, regulatory and social conditions as well as the foreign currency volatility. As of December 31, 2024, our Russian operations had approximately $ billion in total assets, excluding intercompany balances, of which approximately $ billion consisted of cash and cash equivalents held mostly in local currency (Russian rubles). Additionally, we hold a % equity interest in JSC TK Megapolis, PMI's distributor in Russia. For further details, see Note 4. War in Ukraine, Note 6. Related Parties – Equity Investments and Other, and Note 18. Contingencies.
2023 Annual impairment review of goodwill and non-amortizable intangible assets
During the second quarter of 2023, as a result of the completion of PMI's annual review of goodwill and non-amortizable intangible assets for potential impairment, it was determined that the estimated fair value of the Wellness and Healthcare reporting unit was lower than its carrying value. Consequently, PMI recorded a goodwill impairment charge of $ million in the consolidated statements of earnings for the year ended December 31, 2023, reflecting the impact of reduced estimated future cash flows, which were primarily attributable to unfavorable clinical trial results that became available in June 2023 for an inhalable aspirin product being developed by the Wellness and Healthcare business. Additionally, as a result of the impairment test of non-amortizable intangible assets, PMI recorded a pre-tax impairment charge of $ million for an in-process research and development project related to one of PMI's 2021 acquisitions. This pre-tax impairment charge of $ million was recorded within marketing, administration and research costs in the consolidated statements of earnings for the year ended December 31, 2023.
million and $ million, respectively. Equity method investments are initially recorded at cost. Under the equity method of accounting, the investment is adjusted for PMI's proportionate share of earnings or losses, dividends, capital contributions, changes in ownership interests and movements in currency translation adjustments. The carrying value of our equity method investments at December 31, 2024 and 2023, exceeded our share of the investees' book value by $ million and $ million, respectively. The difference between the investment carrying value and the amount of underlying equity in net assets is mainly attributable to equity method goodwill, convertible debt instruments, and definite-lived intangible assets and other assets. The difference related to the definite-lived intangibles and other assets at December 31, 2024 and 2023 of $ million and $ million, respectively, is amortized on a straight-line basis and is included in Equity investments and securities (income)/loss, net on the consolidated statements of earnings. At December 31, 2024 and 2023, PMI received year-to-date dividends from equity method investees of $ million and $ million, respectively.
PMI holds a % equity interest in Megapolis Distribution B.V. ("MDBV"), which was the holding company of JSC TK Megapolis (formerly CJSC TK Megapolis), pursuant to Dutch law, PMI's distributor in Russia (SSEA, CIS & MEA segment), which as of December 31, 2024 had a carrying value of $ million. Additionally, there was approximately $ million of cumulative foreign currency translation losses associated with MDBV reflected in accumulated other comprehensive losses in the consolidated statement of stockholders’ equity as of December 31, 2024. In June 2024, the Russian government included JSC TK Megapolis in the list of economically significant organizations that may be subject to forced localization under applicable Russian law, which refers to the mandatory removal of a foreign holding company from the shareholding structure. On August 8, 2024, the Arbitrazh Court of the Moscow Region granted the forced localization of MDBV as requested by the Ministry of Industry and Trade on July 18, 2024. As a result, MDBV’s shares in JSC TK Megapolis were transferred to JSC TK Megapolis and subsequently transferred to the Russian subsidiary of its indirect shareholders during the fourth quarter of 2024. As a result of the transfer of shares, PMI recorded a tax charge of $ million, primarily reflecting additional deferred withholding taxes related to the JSC TK Megapolis pre-localization earnings and other adjustments of accumulated earnings of the Russian subsidiary. As of December 31, 2024, there are risks related to this investment as the fair value of these assets with their associated rights is difficult to predict due to the current economic, political, regulatory, legal and social conditions as well as the foreign currency volatility.
% equity interest in United Arab Emirates-based Emirati Investors-TA (FZC) (“EITA”). PMI holds an approximate % economic interest in Société des Tabacs Algéro-Emiratie (“STAEM”), an Algerian joint venture that is % owned by EITA and % by the Algerian state-owned enterprise Management et Développement des Actifs et des Ressources Holding ("MADAR Holding"), which manufactures and distributes under license some of PMI’s brands (SSEA, CIS & MEA segment).
In April 2023, PMI acquired an approximate economic interest of % in United Tobacco Company ("UTC"). UTC is an entity incorporated in Egypt which manufactures products under license for PMI’s Egyptian subsidiary. On May 16, 2024, PMI acquired a controlling interest in UTC. For further details, see Note 3. Acquisitions and Divestitures.
In May 2024, PMI acquired an indirect economic interest of % in Eastern Company (“Eastern"), Egypt’s largest cigarette manufacturer which also includes cigars and pipe tobacco, among others, in its portfolio. PMI accounted for its investment in Eastern under the equity method of accounting as it has the indirect ability to participate in Eastern's policy making processes. In relation to the acquisition, PMI subsequently entered into an agreement in August 2024 to guarantee certain credit facilities and repayment of certain bank loan liabilities. The maximum amount of these guarantee obligations is $ million and they will be in effect until 2034. As of December 31, 2024, PMI has not finalized the basis difference allocation resulting from the investment.
The initial investments in Megapolis Distribution BV, EITA, Eastern and UTC (up to the acquisition of controlling interest in UTC on May 16, 2024) have been recorded at cost and are included in equity investments on the consolidated balance sheets. Transactions between these equity method investees and PMI subsidiaries are considered to be related-party transactions and are included in the tables below.
Equity securities:
On March 22, 2019, PMI’s wholly owned subsidiary in Canada, Rothmans, Benson & Hedges Inc. (“RBH”) obtained an initial order from the Ontario Superior Court of Justice granting it protection under the Companies’ Creditors Arrangement Act ("CCAA"), which is a Canadian federal law that permits a Canadian business to restructure its affairs while carrying on its business in the ordinary course with minimal disruption to its customers, suppliers and employees. The administration of the CCAA process, principally relating to the powers provided to the court under the CCAA and the oversight provided by the court appointed monitor, removes certain elements of control of the business from both PMI and RBH. As a result, PMI determined that it no longer had a controlling financial interest over RBH as defined in ASC 810 (Consolidation), and deconsolidated RBH as of the date of the CCAA filing.
Since the deconsolidation of RBH on March 22, 2019, PMI has accounted for its continuing investment in RBH in accordance with ASC 321 (Investments-Equity Securities) as an equity security, without readily determinable fair value, and recorded its continuing investment in RBH at fair value of $ million, which included the estimated settlement amount at the date of deconsolidation, within equity investments.
On October 17, 2024, the court-appointed mediator and monitor in the CCAA proceedings filed a proposed plan of compromise and arrangement (“Proposed Plan”) setting forth, among other things, certain terms of a proposed comprehensive resolution of Canadian tobacco claims and related litigation. Under the resolution contemplated by the Proposed Plan, RBH, Imperial Tobacco Canada Limited ("ITL") and JTI Macdonald Corp ("JTIM") would pay an aggregate global settlement amount of CAD billion (approximately $ billion). A significant determinative factor in the analysis of impairment indicators was the issue of allocation of CAD billion aggregate settlement amount among RBH, ITL, and JTIM which remained unresolved at the time of filing.
There has been no agreed allocation under the Proposed Plan and there has been no ruling from the CCAA court on the matter. On January 24, 2025, RBH filed an objection to approval of the Proposed Plan with the CCAA court (for further details, see Note 18. Contingencies). Developments, including the positions taken by RBH in this objection and the positions taken by other parties in related filings narrowed the range of possible outcomes with respect to the allocation of the aggregate settlement amount of CAD billion among RBH, ITL, and JTIM, which was determined to be an indicator that PMI’s investment in RBH may be impaired. Although there remains some uncertainty as to the final terms of the Proposed plan, PMI evaluated its investment in RBH for potential impairment and concluded that the estimated fair value of its investment in RBH was lower than its carrying value. As a result, PMI performed a quantitative valuation of its investment in RBH as of December 31, 2024, and recorded a non-cash impairment charge of $ million in the consolidated statement of earnings for the year ended December 31, 2024, as a recognized subsequent event. The fair value of PMI’s continuing investment in RBH of $ million represented the estimated fair value of the underlying business, net of PMI’s best estimate of the share of the aggregate global settlement amount that could be allocated to RBH, and was determined based on an income approach using a discounted cash flow analysis.
In determining the fair value of PMI’s investment in RBH, PMI made various judgements, estimates and assumptions, the most significant of which were the discount rate, sales volumes and operating margins related to the fair value of the combustible tobacco product business in Canada. In addition, significant estimates were made with respect to the allocation amount of the aggregate global
million and $ million for the years ended December 31, 2024 and 2023, respectively. Unrealized pre-tax gains (losses) of $ million and $ million ($ million and $ million net of tax) on these equity securities were recorded in equity investments and securities (income)/loss, net on the consolidated statements of earnings for the years ended December 31, 2024 and 2023, respectively. For a description of the fair value hierarchy and the three levels of inputs used to measure fair values, see Note 2. Summary of Significant Accounting Policies.
Other related parties:
United Arab Emirates-based Trans-Emirates Trading and Investments (FZC) ("TTI") holds a % non-controlling interest in Philip Morris Misr LLC ("PMM"), an entity incorporated in Egypt which is consolidated in PMI’s financial statements in the SSEA, CIS & MEA segment. PMM sells, under license, PMI brands in Egypt through an exclusive distribution agreement with a local entity that is also controlled by TTI.
Godfrey Phillips India Ltd ("GPI") is one of the non-controlling interest holders in IPM India, which is a % owned PMI consolidated subsidiary in the SSEA, CIS & MEA segment. GPI also acts as contract manufacturer and distributor for IPM India.
Financial activity with the above related parties:
| $ | | | $ | | | | Other | | | | | | | |
Net revenues (a) | | $ | | | $ | | | $ | | |
| | | | |
| Expenses: | | | | |
| Other | | $ | | | $ | | | $ | | |
| Expenses | | $ | | | $ | | | $ | | |
(a) Net revenues exclude excise taxes and VAT billed to customers.
PMI’s balance sheet activity with the above related parties was as follows:
| | | | | | | | | | | |
| | At December 31, |
| (in millions) | | 2024 | 2023 |
| Receivables: | | | |
| Megapolis Group | | $ | | | $ | | |
| Other | | | | | |
| Receivables | | $ | | | $ | | |
| | | |
| Payables: | | | |
| Other | | $ | | | $ | | |
| Payables | | $ | | | $ | | |
| | |
| | |
months from the date of purchase or such other periods as required by law. PMI generally provides in cost of sales for the estimated cost of warranty in the period the related revenue is recognized. PMI assesses the adequacy of its accrued product warranties and adjusts the amounts as necessary based on actual experience and changes in future estimates. Factors that affect product warranties may vary across markets but typically include device version mix, product failure rates, logistics and service delivery costs, and warranty policies. PMI accounts for its product warranties within other accrued liabilities. | $ | | | | Changes due to: | | |
| Warranties issued | | | | |
| Settlements | () | | () | |
| Currency/Other | () | | () | |
| Balance at end of period | $ | | | $ | | |
| | | % | | $ | | | | | % | Bank loans | | | | | | | | | | | |
| | |
| $ | | | | | | $ | | | | |
Given the mix of PMI's legal entities and their respective local economic environments, the average interest rate for bank loans above can vary significantly from day to day and country to country.
The fair values of PMI’s short-term borrowings at December 31, 2024 and 2023, based on current market interest rates, approximate carrying value.
% to % (average interest rate %), due through 2044$ | | | | $ | | | | Foreign currency obligations: | | | |
Euro notes, % to % (average interest rate %), due through 2039 | | | | | |
Swiss franc note, %, due 2024 | | | | | |
Euro credit facility borrowings related to Swedish Match AB acquisition, (average interest rate %), due through 2027 | | | | | |
Swedish krona notes, % to % (average interest rate %), due through 2029 | | | | | |
Other (average interest rate %), due through 2032 (a) | | | | | |
| Carrying value of long-term debt | | | | | |
Less current portion of long-term debt | | | | | |
| $ | | | | $ | | |
million and $ million in finance leases at December 31, 2024 and 2023, respectively.
The fair value of PMI’s outstanding long-term debt, which is utilized solely for disclosure purposes, is determined using quotes and market interest rates currently available to PMI for issuances of debt with similar terms and remaining maturities.
| | $ | | | | Level 2 | | | | | |
For a description of the fair value hierarchy and the three levels of inputs used to measure fair values, see Note 2. Summary of Significant Accounting Policies.
Term Loan Facility related to the Financing of the Swedish Match Acquisition
On June 23, 2022, PMI entered into a € billion (approximately $ billion at the date of signing) senior unsecured term loan credit agreement consisting of a € billion (approximately $ billion at the date of signing) tranche expiring after the occurrence of certain events and a € billion (approximately $ billion at the date of signing) tranche expiring on June 23, 2027.
On November 7, 2022, PMI delivered notices of borrowing for advances totaling € billion under the term loan facility, of which € billion would become due on November 9, 2025, and € billion would become due on June 23, 2027, unless prepaid pursuant to the terms of the credit agreement.
On November 21, 2024, PMI prepaid approximately € billion (approximately $ billion), including outstanding principal and accrued interest, representing all borrowings outstanding under the -year tranche of the senior unsecured term loan facility. As of December 31, 2024, borrowings in the amount of € billion (approximately $ billion) under the -year tranche of the term loan facility remained outstanding.
| % | | May 2020 | | May 2025 | U.S. dollar notes | | $ | | % | | August 2015 | | August 2025 |
U.S. dollar notes | | $ | | % | | November 2022 | | November 2025 |
U.S. dollar notes | | $ | | % | | February 2016 | | February 2026 |
U.S. dollar notes | | $ | | % | | February 2023 | | February 2026 |
U.S. dollar notes | (a) | $ | | % | | May 2023 | | February 2026 |
U.S. dollar notes | | $ | | % | | November 2020 | | May 2026 |
U.S. dollar notes | | $ | | % | | February 2024 | | February 2027 |
U.S. dollar notes | | $ | | % | | August 2017 | | August 2027 |
U.S. dollar notes | | $ | | % | | November 2024 | | November 2027 |
U.S. dollar notes | | $ | | % | | November 2022 | | November 2027 |
U.S. dollar notes | | $ | | % | | February 2023 | | February 2028 |
U.S. dollar notes | (b) | $ | | % | | May 2023 | | February 2028 |
U.S. dollar notes | | $ | | % | | November 2017 | | March 2028 |
U.S. dollar notes | (c) | $ | | % | | May 2013 | | May 2028 |
U.S. dollar notes | | $ | | % | | September 2023 | | September 2028 |
U.S. dollar notes | | $ | | % | | February 2024 | | February 2029 |
U.S. dollar notes | | $ | | % | | May 2019 | | August 2029 |
U.S. dollar notes | | $ | | % | | November 2024 | | November 2029 |
U.S. dollar notes | | $ | | % | | November 2022 | | November 2029 |
U.S. dollar notes | | $ | | % | | February 2023 | | February 2030 |
U.S. dollar notes | (d) | $ | | % | | May 2023 | | February 2030 |
U.S. dollar notes | | $ | | % | | May 2020 | | May 2030 |
U.S. dollar notes | | $ | | % | | September 2023 | | September 2030 |
U.S. dollar notes | | $ | | % | | November 2020 | | November 2030 |
U.S. dollar notes | | $ | | % | | November 2024 | | November 2031 |
U.S. dollar notes | | $ | | % | | November 2022 | | November 2032 |
U.S. dollar notes | | $ | | % | | February 2024 | | February 2031 |
U.S. dollar notes | | $ | | % | | February 2023 | | February 2033 |
U.S. dollar notes | (e) | $ | | % | | May 2023 | | February 2033 |
U.S. dollar notes | | $ | | % | | September 2023 | | September 2033 |
U.S. dollar notes | | $ | | % | | February 2024 | | February 2034 |
U.S. dollar notes | | $ | | % | | November 2024 | | November 2034 |
U.S. dollar notes | | $ | | % | | May 2008 | | May 2038 |
U.S. dollar notes | | $ | | % | | November 2011 | | November 2041 |
U.S. dollar notes | | $ | | % | | March 2012 | | March 2042 |
U.S. dollar notes | | $ | | % | | August 2012 | | August 2042 |
U.S. dollar notes | | $ | | % | | March 2013 | | March 2043 |
U.S. dollar notes | | $ | | % | | November 2013 | | November 2043 |
U.S. dollar notes | | $ | | % | | November 2014 | | November 2044 |
U.S. dollar notes | (f) | $ | | % | | May 2016 | | November 2044 |
| | | | | | | | |
| | | | | | | | |
(approximately $) | % | | March 2013 | | March 2025 | EURO notes | (c) | € (approximately $) | | % | | November 2017 | | November 2025 |
EURO notes | (c) | € (approximately $) | | % | | December 2020 | | November 2025 |
EURO notes | (c) | € (approximately $) | | % | | June 2021 | | November 2025 |
EURO notes | (g) | € (approximately $) | | % | | March 2014 | | March 2026 |
EURO notes | (g) | € (approximately $) | | % | | August 2019 | | August 2026 |
EURO notes | (c) | € (approximately $) | | % | | February 2020 | | February 2027 |
EURO notes | (g) | € (approximately $) | | % | | May 2014 | | May 2029 |
| EURO notes | (g) | € (approximately $) | | % | | June 2024 | | January 2031 |
EURO notes | (g) | € (approximately $) | | % | | August 2019 | | August 2031 |
EURO notes | (g) | € (approximately $) | | % | | June 2013 | | June 2033 |
EURO notes | (g) | € (approximately $) | | % | | May 2016 | | May 2036 |
EURO notes | (g) | € (approximately $) | | % | | November 2017 | | November 2037 |
EURO notes | (g) | € (approximately $) | | % | | August 2019 | | August 2039 |
| Swedish krona notes | (c) | SEK (approximately $) | | % | | January 2019 | | January 2026 |
| Swedish krona notes | (c) | SEK (approximately $) | | % | | February 2021 | | February 2026 |
| Swedish krona notes | (c) | SEK (approximately $) | | % | | March 2021 | | February 2026 |
| Swedish krona notes | (c) | SEK (approximately $) | | % | | September 2021 | | February 2026 |
| Swedish krona notes | (c) | SEK (approximately $) | | % | | January 2022 | | February 2026 |
| Swedish krona notes | (c) | SEK (approximately $) | | % | | April 2021 | | April 2029 |
(a) These notes are a further issuance of the % notes issued in February 2023.
(b) These notes are a further issuance of the % notes issued in February 2023.
(c) Notes issued by Swedish Match AB. USD equivalents for foreign currency notes were calculated based on exchange rates on the date of acquisition.
(d) These notes are a further issuance of the % notes issued in February 2023.
(e) These notes are a further issuance of the % notes issued in February 2023.
(f) These notes are a further issuance of the % notes issued by PMI in November 2014.
(g) USD equivalents for foreign currency notes were calculated based on exchange rates on the date of issuance.
The net proceeds from the sale of the securities listed in the table above were primarily used for general corporate purposes, including working capital requirements, repayment of commercial paper, and to refinance certain of our outstanding notes. On November 21, 2024, PMI financed the prepayment of the -year tranche of the senior unsecured term loan facility with the proceeds of the November 2024 bond issuances and cash on hand.
| | 2026 | | |
| 2027 | | |
| 2028 | | |
| 2029 | | |
| 2030-2034 | | |
| 2035-2039 | | |
| Thereafter | | |
| | |
| Debt discounts and fair value adjustments | () | |
| Total long-term debt | $ | | |
Revolving Credit Facilities
-day revolving credit, expiring January 28, 2025 $ | | | | Multi-year revolving credit, expiring February 10, 2026 (1) | | | |
Multi-year revolving credit, expiring September 29, 2026 (2) (3) | | | |
Total facilities | $ | | | |
| | | (1) On January 28, 2022, PMI entered into an agreement, effective February 10, 2022, to amend and extend the term of its $ billion multi-year revolving credit facility, for an additional year covering the period February 11, 2026 to February 10, 2027, in the amount of $ billion.
(2) Includes pricing adjustments that may result in the reduction or increase in both the interest rate and commitment fee under the credit agreement if PMI achieves, or fails to achieve, certain specified targets.
billion multi-year revolving credit facility, for an additional year covering the period September 30, 2026 to September 29, 2027, in the amount of $ billion. On September 20, 2023, PMI entered into an agreement, effective September 29, 2023, to amend and further extend the term to September 29, 2028.
On December 17, 2024, PMI entered into a credit agreement, effective January 29, 2025, relating to a senior unsecured revolving credit facility with borrowings up to an aggregate principal amount of € billion, (approximately $ billion) expiring on January 29, 2028. Concurrently, PMI did not request an extension of the maturity date of the existing -day revolving credit facility and the facility matured on January 28, 2025.
At December 31, 2024, there were borrowings under these committed revolving credit facilities, and the entire committed amounts were available for borrowing.
In addition to the committed revolving credit facilities discussed above, PMI maintains certain short-term credit arrangements, including uncommitted credit lines, to primarily meet working capital needs. These credit arrangements amounted to approximately $ billion at December 31, 2024, and approximately $ billion at December 31, 2023. Borrowings under these arrangements and other bank loans amounted to $ million at December 31, 2024, and $ million at December 31, 2023.
billion; issued, repurchased and outstanding shares were as follows: | | | | | | | | | | | | | | | | | |
| Shares Issued | | Shares
Repurchased | | Shares
Outstanding |
| Balances, January 1, 2022 | | | | () | | | | |
| Repurchase of shares | | | () | | | () | |
| Issuance of stock awards | | | | | | | |
| Balances, December 31, 2022 | | | | () | | | | |
|
| Issuance of stock awards | | | | | | | |
| Balances, December 31, 2023 | | | | () | | | | |
|
| Issuance of stock awards | | | | | | | |
| Balances, December 31, 2024 | | | | () | | | | |
On June 11, 2021, PMI's Board of Directors authorized a share repurchase program of up to $ billion, with target spending of $ billion to $ billion over a period that commenced in July 2021. From July 22, 2021 through March 31, 2022, PMI repurchased million shares of its common stock at a cost of approximately $ billion. During the first three months of 2022, PMI repurchased million shares of its common stock at a cost of $ million. On May 11, 2022, we announced the suspension of the share repurchase program following the recommended public offer to acquire the outstanding shares of Swedish Match from its shareholders. For further details, see Note 3. Acquisitions and Divestitures. Prior to the suspension of the program, PMI made no share repurchases during the second quarter of 2022. The share repurchase program expired on July 21, 2024.
At December 31, 2024, shares of common stock were reserved for stock awards under PMI’s stock plans, and million shares of preferred stock, without par value, were authorized but unissued. PMI currently has no plans to issue any shares of preferred stock.
million shares of PMI’s common stock may be issued under the 2022 Plan. At December 31, 2024, shares available for grant under the 2022 Plan were .
In May 2017, PMI’s shareholders approved the Philip Morris International Inc. 2017 Stock Compensation Plan for Non-Employee Directors (the “2017 Non-Employee Directors Plan”). A non-employee director is defined as a member of the PMI Board of Directors who is not a full-time employee of PMI or of any corporation in which PMI owns, directly or indirectly, stock possessing at least % of the total combined voting power of all classes of stock entitled to vote in the election of directors in such corporation. Up to million shares of PMI common stock may be awarded under the 2017 Non-Employee Directors Plan. At December 31, 2024, shares available for grant under the plan were .
Restricted share unit (RSU) awards
PMI may grant RSU awards to eligible employees; recipients may not sell, assign, pledge or otherwise encumber such awards. Such awards are subject to forfeiture if certain employment conditions are not met. RSU awards generally vest on the third anniversary of the grant date. RSU awards do not carry voting rights, although they do earn dividend equivalents.
| $ | | |
| Granted | | | | |
| Vested | () | | | |
| Forfeited | () | | | |
| Balance at December 31, 2024 | | | $ | | |
| | $ | | | $ | | | | 2023 | $ | | | | $ | | | $ | | |
| 2022 | $ | | | | $ | | | $ | | |
The fair value of the RSU awards at the date of grant is amortized to expense over the restriction period, typically after the date of the award, or upon death, disability or reaching the age of . As of December 31, 2024, PMI had $ million of total unrecognized compensation costs related to non-vested RSU awards. These costs are expected to be recognized over a weighted-average period of approximately , or upon death, disability or reaching the age of .
| | $ | | | $ | | | | 2023 | | | | $ | | | $ | | |
| 2022 | | | | $ | | | $ | | |
performance cycle. The performance metrics for such PSU's granted during 2023 and 2022 consisted of PMI's Total Shareholder Return ("TSR") relative to a predetermined peer group and on an absolute basis (% weight), PMI’s currency-neutral compound annual adjusted diluted earnings per share growth rate (% weight), and a Sustainability Index, which consists of drivers: •Product Sustainability (% weight) measuring progress primarily on PMI's efforts to maximize the benefits of smoke-free products, purposefully phase out cigarettes, and reduce post-consumer waste; and
•Operational Sustainability (% weight) measuring progress on PMI's efforts to benefit PMI and its stakeholders by tackling climate change, preserving nature, improving the quality of life of people in its supply chain, and fostering an empowered, and inclusive workplace.
The performance metrics, targets and relative weights for the PSU’s granted during 2024 were the same as the PSU’s granted during 2023 and 2022, with the exception of adjustments made to certain components of the Sustainability Index intended to address PMI's developing sustainability strategy and reporting.
The PSU performance metrics may be adjusted if appropriate to reflect the impact of unusual or infrequently occurring events, including, to the extent significant, corporate transactions, accounting or tax law changes, asset write-downs, litigation or claim adjustments, foreign exchange gains and losses, unbudgeted capital expenditures and other such events.
The aggregate of the weighted performance factors for the metrics in each such PSU award determines the percentage of PSUs that will vest at the end of the performance cycle. The minimum percentage of such PSUs that can vest is , with a target percentage of and a maximum percentage of . Each such vested PSU entitles the participant to share of common stock. An aggregate weighted PSU performance factor of will result in the targeted number of PSUs being vested. At the end of the performance cycle, participants are entitled to an amount equivalent to the accumulated dividends paid on common stock during the performance cycle for the number of shares earned. PSU awards do not carry voting rights.
| | $ | | | $ | | | | Granted | | | | | | | |
| Vested | () | | | | | | |
| Adjustments for performance achievement | | | | | | | |
| Forfeited | () | | | | | | |
| Balance at December 31, 2024 | | | | $ | | | $ | | |
| $ | | | | $ | | | $ | | | | $ | | | | 2023 | $ | | | $ | | | | $ | | | $ | | | | $ | | |
| 2022 | $ | | | $ | | | | $ | | | $ | | | | $ | | |
The grant date fair value of the PSU awards subject to the other performance factors was determined by using the market price of PMI’s stock on the date of the grant. The grant date fair value of the PSU market-based awards subject to the TSR performance factor was determined by using the Monte Carlo simulation model.
% | | | % | | | % | Average expected volatility (b) | | % | | | % | | | % |
(a) Based on the U.S. Treasury yield curve.
(b) Determined using the observed historical volatility.
The fair value of the PSU award at the date of grant is amortized to expense over the performance period, which is typically after the date of the award, or upon death, disability or reaching the age of . As of December 31, 2024, PMI had $ million of total unrecognized compensation cost related to non-vested PSU awards. This cost is recognized over a weighted-average performance cycle period of approximately , or upon death, disability or reaching the age of .
| | $ | | | $ | | | | 2023 | | | | $ | | | $ | | |
| 2022 | | | | $ | | | $ | | |
| | $ | | | | $ | | | Less distributed and undistributed earnings attributable to share-based payment awards (1) | | | | | | | | |
| Net earnings for basic and diluted EPS | $ | | | | $ | | | | $ | | |
| Weighted-average shares for basic EPS | | | | | | | | |
Plus contingently issuable performance stock units (PSUs) (1) | | | | | | | | |
| Weighted-average shares for diluted EPS | | | | | | | | |
(1) Including rounding adjustment
antidilutive stock awards.
| | $ | | | | $ | | | Provision for income taxes: | | | | | |
United States federal and state: | | | | | |
Current | $ | | | | $ | | | | $ | () | |
Deferred | () | | | () | | | () | |
Total United States | | | | () | | | () | |
Outside United States: | | | | | |
Current | | | | | | | | |
Deferred | () | | | | | | () | |
Total outside United States | | | | | | | | |
Total provision for income taxes | $ | | | | $ | | | | $ | | |
Changes in the tax laws of foreign jurisdictions could arise as a result of the Base Erosion and Profit Shifting project undertaken by the Organisation for Economic Co-operation and Development (“OECD”), which recommended changes to numerous long-standing tax principles. Many countries have enacted the OECD’s framework on a global minimum tax (referred to as “Pillar Two”), effective for taxable years beginning after December 31, 2023. PMI has determined that Pillar Two did not have a material impact on its 2024 consolidated financial statements.
At December 31, 2017, PMI recorded a one-time transition tax liability on its accumulated foreign earnings, which is payable over an eight-year period beginning in 2018. At December 31, 2023, $ billion of PMI's remaining long-term portion of transition tax liability was recorded in "income taxes and other liabilities" on PMI's consolidated balance sheets. At December 31, 2024, PMI had remaining long-term portion of transition tax liability as the final transition tax payment is anticipated to be made in the second quarter of 2025.
billion and $ billion, respectively, of accumulated earnings of Swedish Match U.S. subsidiaries that are expected to be permanently reinvested. PMI does not foresee a need to repatriate these earnings since its U.S. cash requirements are supported by distributions of earnings from PMI foreign entities that have not been designated as permanently reinvested and existing credit facilities. At December 31, 2024 and 2023, PMI has determined the amount of deferred tax liabilities related to these unremitted Swedish Match U.S. earnings was approximately $ million and $ million, respectively.
At December 31, 2024 and 2023, U.S. federal and foreign deferred income taxes have been provided on all accumulated earnings of PMI's foreign subsidiaries.
PMI is regularly examined by tax authorities around the world and is currently under examination in a number of jurisdictions. The U.S. federal statute of limitations on assessment remains open for the years 2019 and onward. Foreign and U.S. state jurisdictions have statutes of limitations generally ranging from to years after the filing of a return. Years still open to examination by foreign tax authorities in major jurisdictions include Germany (2018 onward), Indonesia (2019 onward), Italy (2019 onward), Russia (2021 onward) and Switzerland (2020 onward).
Subsidiaries of PMI in Indonesia, principally PT Hanjaya Mandala Sampoerna Tbk ("HMS"), have recorded income tax receivables in the amount of trillion Indonesian rupiah (approximately $ million) relating to corporate income tax assessments paid to avoid potential penalties, primarily for domestic and other intercompany transactions for the years 2015 to 2021. Objection letters have been filed with the Tax Office and these assessments are being challenged at various levels in court. These income tax receivables are included in other assets in PMI’s consolidated balance sheets at December 31, 2024 and 2023.
It is reasonably possible that within the next 12 months certain tax examinations will close, which could result in a change in unrecognized tax benefits along with related interest and penalties. An estimate of any possible change cannot be made at this time.
| | $ | | | | $ | | | Additions based on tax positions related to the current year | | | | | | | | |
Additions for tax positions of previous years | | | | | | | | |
Reductions for tax positions of prior years | | | | () | | | () | |
Reductions due to lapse of statute of limitations | () | | | () | | | () | |
Settlements | | | | | | | () | |
Other | () | | | | | | () | |
| Balance at December 31, | $ | | | | $ | | | | $ | | |
| | $ | | | | $ | | | Accrued interest and penalties | | | | | | | | |
Tax credits and other indirect benefits | () | | | () | | | () | |
Liability for tax contingencies | $ | | | | $ | | | | $ | | |
The amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate was $ million at December 31, 2024. The remainder, if recognized, would principally affect deferred taxes.
For the years ended December 31, 2024, 2023 and 2022, PMI recognized income (expense) in its consolidated statements of earnings of $() million, $ million and $ million, respectively, related to interest and penalties associated with uncertain tax positions.
% | | | % | | | % | | Increase (decrease) resulting from: | | | | | |
| Foreign rate differences | () | | | () | | | () | |
| Dividend repatriation cost | | | | | | | | |
|
| Global intangible low-taxed income | | | | | | | | |
| U.S. state taxes | | | | () | | | | |
| Foreign derived intangible income | () | | | () | | | () | |
| Foreign exchange | | | | () | | | () | |
| Non-deductible goodwill impairment | | | | | | | | |
| Unremitted earnings of Russian subsidiaries | | | | | | | | |
| Fair value adjustment of equity securities | | | | | | | | |
| Other | () | | | () | | | () | |
| Effective tax rate | | % | | | % | | | % |
The 2024 effective tax rate increased percentage points to %. The change in the effective tax rate for 2024, as compared to 2023, was unfavorably impacted by: (i) an increase in deferred tax liabilities related to the fair value adjustment of equity securities held by PMI; (ii) U.S. state taxes; and (iii) a deferred tax charge for unrealized foreign currency losses on intercompany loans related to the Swedish Match acquisition financing reflected in the consolidated statements of earnings, while the underlying pre-tax foreign currency movements fully offset in the consolidated statements of earnings and were reflected as currency translation adjustments in its consolidated statements of stockholders' (deficit) equity, partially offset by: (i) a lower deferred tax charge in 2024 related to the unremitted earnings of PMI's Russian subsidiaries as compared to the 2023 charge following the suspension of certain double tax treaties; (ii) the non-deductible Wellness and Healthcare goodwill impairment charge recorded in 2023; and (iii) a U.S. tax benefit for a worthless stock deduction under section 165(g) of the Internal Revenue Code related to PMI's investment in C.A. Tabacalera Nacional, a wholly owned foreign corporation incorporated in Venezuela. For further details on PMI's ceased operations in Venezuela and the impairment loss related to the sale of Vectura Group, see Note 20. Restructuring Activities and Note 3. Acquisitions and Divestitures, respectively.
The 2023 effective tax rate increased percentage points to %. The change in the effective tax rate for 2023, as compared to 2022, was unfavorably impacted by: (i) an increase in deferred tax liabilities related to the unremitted earnings of PMI's Russian subsidiaries due to the unilateral suspension of certain Russian double tax treaties by the Russian authorities on August 8, 2023, with respect to certain payments including dividends; (ii) the non-deductible Wellness and Healthcare goodwill impairment charge and (iii) an increase in foreign tax credit limitation related to GILTI, partially offset by changes in earnings mix by taxing jurisdiction.
| | $ | | | | Accrued pension costs | | | | | |
| Inventory | | | | | |
| Accrued liabilities | | | | | |
| Net operating loss, tax credit, and other carryforwards | | | | | |
| Investments in equity interests | | | | | |
| Foreign exchange | | | | | |
| Other | | | | | |
| Total deferred income tax assets | | | | | |
| Less: valuation allowance | () | | | () | |
| Deferred income tax assets, net of valuation allowance | | | | | |
| Deferred income tax liabilities: | | | |
| Intangible assets | () | | | () | |
| Property, plant and equipment | () | | | () | |
| Unremitted earnings | () | | | () | |
| Foreign exchange | () | | | | |
| Other | | | | | |
Total deferred income tax liabilities | () | | | () | |
| Net deferred income tax assets (liabilities) | $ | () | | | $ | () | |
At December 31, 2024, PMI recorded deferred tax assets for net operating loss, tax credit, and other carryforwards of $ million, with varying dates of expiration, primarily after 2029, including $ million with an unlimited carryforward period. At December 31, 2024, PMI has recorded a valuation allowance of $ million against deferred tax assets that do not meet the more-likely-than not recognition threshold.
million, with varying dates of expiration, primarily after 2028, including $ million with an unlimited carryforward period. At December 31, 2023, PMI has recorded a valuation allowance of $ million against deferred tax assets that do not meet the more-likely-than-not recognition threshold.
existing geographical segments. The geographical segments are as follows: Europe Region; South and Southeast Asia, Commonwealth of Independent States, Middle East and Africa Region ("SSEA, CIS & MEA"); East Asia, Australia, and PMI Duty Free Region ("EA, AU & PMI DF"); and Americas Region. The Wellness and Healthcare segment remains unchanged.
PMI’s Chief Executive Officer, who is the chief operating decision maker ("CODM") evaluates geographical segment performance based on the regional operating income, which includes results from all product categories sold in each region, excluding Wellness and Healthcare products. Business operations in the Wellness and Healthcare segment are evaluated separately. The CODM reviews short-term and long-term trends, forecasts, and budget-to-actual variances to assess geographical segment performance and to allocate resources. Interest expense, net, and provision for income taxes are centrally managed and, accordingly, such items are not presented
geographical segments, except the Wellness and Healthcare business. PMI believes this best depicts how the nature, amount, timing and uncertainty of its revenue and cash flows are affected by economic factors.
On November 27, 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ASU 2023-07, “Improvements to Reportable Segment Disclosures” (“ASU 2023-07”). ASU 2023-07 improves reportable segment disclosures, primarily through enhanced disclosures about significant segment expenses that impact segment profit or loss, regularly provided to the chief operating decision maker. For further details, see Note 23. New Accounting Standards.
| $ | | | $ | | | $ | | | $ | | | $ | | | | Less: | | | | | | |
| Cost of sales | | | | | | | | | | | | |
| Marketing, administration and research costs | | | | | | | | | | | | |
| Operating income (loss) | $ | | | $ | | | $ | | | $ | | | $ | () | | $ | | |
For the Year Ended December 31, 2023 | | | | | | |
| Net revenues | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | |
| Less: | | | | | | |
| Cost of sales | | | | | | | | | | | | |
| Marketing, administration and research costs | | | | | | | | | | | | |
| Impairment of goodwill | | | | | | | | | | | | |
| Operating income (loss) | $ | | | $ | | | $ | | | $ | | | $ | () | | $ | | |
For the Year Ended December 31, 2022 | | | | | | |
| Net revenues | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | |
| Less: | | | | | | |
| Cost of sales | | | | | | | | | | | | |
| Marketing, administration and research costs | | | | | | | | | | | | |
| Operating income (loss) | $ | | | $ | | | $ | | | $ | | | $ | () | | $ | | |
Total net revenues attributable to customers located in Japan, PMI's largest market in terms of net revenues, were $ billion, $ billion and $ billion in 2024, 2023 and 2022, respectively. PMI had one customer in the EA, AU & PMI DF segment that accounted for %, % and % of PMI’s consolidated net revenues, and one customer in the Europe segment that accounted for %, % and % of PMI’s consolidated net revenues in 2024, 2023 and 2022, respectively.
| | $ | | | | $ | | | SSEA, CIS & MEA | | | | | | | | |
EA, AU & PMI DF | | | | | | | | |
| Americas | | | | | | | | |
| Total combustible tobacco | | | | | | | | |
| Smoke-free: | | | | | |
| Smoke-free excluding Wellness and Healthcare: | | | | | |
| Europe | | | | | | | | |
SSEA, CIS & MEA | | | | | | | | |
EA, AU & PMI DF | | | | | | | | |
| Americas | | | | | | | | |
| Total Smoke-free excluding Wellness and Healthcare | | | | | | | | |
| Wellness and Healthcare | | | | | | | | |
| Total Smoke-free | | | | | | | | |
| | | | | |
| Total PMI net revenues | $ | | | | $ | | | | $ | | |
Net revenues related to combustible tobacco refer to the operating revenues generated from the sale of these products, including shipping and handling charges billed to customers, net of sales and promotion incentives, and excise taxes. These net revenue amounts consist of the sale of PMI's cigarettes and other tobacco products that are combusted. Other tobacco products primarily include roll-your-own and make-your-own cigarettes, pipe tobacco, cigars and cigarillos and do not include smoke-free products.
Net revenues related to smoke-free, excluding wellness and healthcare, refer to the operating revenues generated from the sale of these products, including shipping and handling charges billed to customers, net of sales and promotion incentives, and excise taxes, if applicable. These net revenue amounts consist of the sale of PMI's products that are not combustible tobacco products, such as heat-not-burn, e-vapor, and oral products, as well as consumer accessories.
Net revenues related to wellness and healthcare consist of operating revenues generated from the sale of products primarily associated with inhaled therapeutics, and oral and intra-oral delivery systems that are included in the operating results of PMI's Wellness and Healthcare business.
Items affecting the comparability of results from operations were as follows:
•Egypt sales tax charge – In the third quarter of 2024, following a ruling issued by the Higher Administrative Court in Egypt and subsequent evaluation of available remedies, PMI concluded that an adverse outcome was probable and recorded a pre-tax charge of $ million in relation to tax assessments for general sales tax deducted on imported cutfiller for the years 2014 to 2016. This pre-tax charge was recorded in marketing, administration and research costs in the consolidated statement of earnings for the year ended December 31, 2024, and was included in the SSEA, CIS & MEA segment results.
•Loss on sale of Vectura Group – In September 2024, PMI announced the execution of a definitive agreement to sell Vectura to Molex Asia Holdings Ltd. On December 31, 2024, we completed the sale. The sale resulted in a pre-tax loss of $ million. This pre-tax loss was recorded in marketing, administration and research costs in the consolidated statement of earnings for the year ended December 31, 2024, and was included in the Wellness and Healthcare segment results. For further details, see Note 3. Acquisitions and Divestitures.
•Restructuring charges - See Note 20. Restructuring Activities for details of the $ million and $ million pre-tax charges for the year ended December 31, 2024 and 2023, respectively, as well as a breakdown of these costs by segment.
million following the termination of a distribution arrangement in the Middle East. This pre-tax charge was recorded as a reduction of net revenues in the consolidated statements of earnings, and was included in the SSEA, CIS & MEA segment results for the year ended December 31, 2023. •Impairment of goodwill and other intangibles – For the year ended December 31, 2023, PMI recorded $ million of goodwill and non-amortizable intangible assets impairment charges that was included in the Wellness and Healthcare segment. For the year ended December 31, 2022, PMI recorded an impairment charge related to definite-lived intangible assets of $ million. This charge was included in the Wellness and Healthcare segment. For further details, see Note 5. Goodwill and Other Intangible Assets, net.
•South Korea indirect tax charge – On July 13, 2023, PMI's South Korean subsidiary, PM Korea, received an adverse ruling from the Supreme Court of South Korea related to cases alleging underpayment of excise taxes in connection with a 2015 excise tax increase and subsequent audit by the South Korean Board of Audit and Inspection. The Supreme Court ruling reversed previous decisions that were in PM Korea’s favor at the trial and appellate levels. As a result of the ruling, we concluded that an adverse outcome was probable. Consequently, we recorded a non-cash pre-tax charge of $ million in marketing, administration and research costs in the consolidated statements of earning, reflecting the full amount previously paid by PM Korea, which was included in the EA, AU & PMI DF segment for the year ended December 31, 2023.
•Termination of agreement with Foundation for a Smoke-Free World – On September 29, 2023, PMI and the Foundation for a Smoke-Free World (the "Foundation") entered into the Final Grant Agreement and Termination of the Second Amended and Restated Pledge Agreement ("Agreement"). Under the terms of the agreement, PMI paid $ million in the third quarter of 2023 in return for the termination of the pledge agreement between the parties. As a result, in the third quarter of 2023, PMI recorded a pre-tax charge of $ million commensurate with the early termination of the pledge agreement. The pre-tax charge was recorded in marketing, administration and research costs in the consolidated statements of earnings for the year ended December 31, 2023 and was included in the operating results of the following segments: Europe ($ million); SSEA, CIS & MEA ($ million); EA, AU & PMI DF ($ million); and Americas ($ million).
•Charges related to the war in Ukraine – See Note 4. War in Ukraine for details of the $ million and $ million pre-tax charges in the Europe segment for the years ended December 31, 2023 and 2022, respectively.
•Swedish Match AB acquisition accounting related items – See Note 3. Acquisitions and Divestitures for details of the $ million and $ million pre-tax purchase accounting adjustments related to the sale of acquired inventories stepped up to fair value. These pre-tax purchase accounting adjustments were included in the Americas segment ($ million in 2023 and $ million in 2022) and the Europe segment ($ million in 2022).
| | $ | | | | $ | | | | SSEA, CIS & MEA | | | | | | | | |
| EA, AU & PMI DF | | | | | | | | |
| Americas | | | | | | | | |
| Wellness & Healthcare | | | | | | | | |
Total depreciation and amortization expense | $ | | | | $ | | | | $ | | |
| | $ | | | | $ | | | | SSEA, CIS & MEA | | | | | | | | |
| EA, AU & PMI DF | | | | | | | | |
| Americas | | | | | | | | |
| Wellness & Healthcare | | | | | | | | |
Total capital expenditures | $ | | | | $ | | | | $ | | |
PMI’s total property, plant and equipment, net and other assets by geographic area were:
| | | | | | | | | | | | | | | | | |
| At December 31, |
(in millions) | 2024 | | 2023 | | 2022 |
Long-lived assets: | | | | | |
| Europe | $ | | | | $ | | | | $ | | |
| SSEA, CIS & MEA | | | | | | | | |
| East Asia and Australia | | | | | | | | |
| Americas | | | | | | | | |
| Total long-lived assets | | | | | | | | |
| Altria Group, Inc. agreement | | | | | | | | |
| Financial instruments | | | | | | | | |
Total property, plant and equipment, net and Other assets | $ | | | | $ | | | | $ | | |
billion, $ billion and $ billion at December 31, 2024, 2023 and 2022, respectively. Total long-lived assets located in Indonesia, which is reflected in the SSEA, CIS & MEA segment above, were $ billion, $ billion and $ billion at December 31, 2024, 2023 and 2022, respectively. Total long-lived assets located in Italy, which is reflected in the Europe segment above, were $ billion, $ billion and $ billion at December 31, 2024, 2023 and 2022, respectively.
) | | $ | () | | | $ | () | | | Net postemployment costs | | | | | | | | |
| Net postretirement costs | | | | | | | | |
| Total pension and other employee benefit costs | $ | | | | $ | | | | $ | | |
| | $ | | | | $ | | | | $ | | | Service cost | | | | | | | | | | | |
Interest cost | | | | | | | | | | | |
Benefits paid | () | | | () | | | () | | | () | |
| Employee contributions | | | | | | | | | | | |
Settlement, curtailment and plan amendment | () | | | () | | | () | | | | |
| | |
Actuarial losses (gains) | | | | | | | | | | | |
Currency | () | | | | | | | | | () | |
| | |
Other | () | | | () | | | () | | | () | |
Benefit obligation at December 31, | | | | | | | | | | | |
Fair value of plan assets at January 1, | | | | | | | | | | | |
Actual return on plan assets | | | | | | | | | | | |
Employer contributions, net of refunds | | | | | | | | | | | |
Employee contributions | | | | | | | | | | | |
Benefits paid | () | | | () | | | () | | | () | |
Settlement | () | | | () | | | () | | | | |
Currency | () | | | | | | | | | | |
| | |
| Other | () | | | | | | | | | | |
Fair value of plan assets at December 31, | | | | | | | | | | | |
Net pension and postretirement liability recognized at December 31, | $ | () | | | $ | () | | | $ | () | | | $ | () | |
(1) Primarily non-U.S. based defined benefit retirement plans.
At December 31, 2024, actuarial losses (gains) consisted primarily of losses for assumption changes related to lower discount rates year-over-year for the Swiss plan. At December 31, 2023, actuarial losses (gains) consisted primarily of losses for assumption changes related to lower discount rates year-over-year for the Swiss, German and Dutch plans.
At December 31, 2024 and 2023, the Swiss pension plan represented % and % of the benefit obligation, respectively, and approximately % and % of the fair value of plan assets at December 31, 2024 and 2023, respectively. At December 31, 2024 and 2023, the U.S. pension plans represented % and % of the benefit obligation, respectively, and approximately % and % of the fair value of plan assets at December 31, 2024 and 2023, respectively.
| | $ | | | | | | | Accrued liabilities — employment costs | () | | | () | | | $ | () | | | $ | () | |
Long-term employment costs | () | | | () | | | () | | | () | |
| $ | () | | | $ | () | | | $ | () | | | $ | () | |
billion and $ billion at December 31, 2024 and 2023, respectively.
For pension plans with accumulated benefit obligations in excess of plan assets, the accumulated benefit obligation and fair value of plan assets were $ billion and $ billion, respectively, as of December 31, 2024. The accumulated benefit obligation and fair value of plan assets were $ billion and $ billion, respectively, as of December 31, 2023.
For pension plans with projected benefit obligations in excess of plan assets, the projected benefit obligation and fair value of plan assets were $ billion and $ billion, respectively, as of December 31, 2024. The projected benefit obligation and fair value of plan assets were $ billion and $ billion, respectively, as of December 31, 2023.
% | | | % | | | % | | | % | Rate of compensation increase | | | | | | | | | |
Interest crediting rate | | | | | | | | | |
Health care cost trend rate assumed for next year | | | | | | | | | |
Ultimate trend rate | | | | | | | | | |
Year that rate reaches the ultimate trend rate | | | | | 2048 | | 2047 |
The discount rate for the largest pension plans is based on a yield curve constructed from a portfolio of high quality corporate bonds that produces a cash flow pattern equivalent to each plan’s expected benefit payments. The discount rate for the remaining plans is developed from local bond indices that match local benefit obligations as closely as possible.
Components of Net Periodic Benefit Cost
| | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | Interest cost | | | | | | | | | | | | | | | | | |
Expected return on plan assets | () | | | () | | | () | | | | | | | | | | |
Amortization: | | | | | | | | | | | |
Net losses | | | | | | | | | | () | | | () | | | | |
Prior service cost (credit) | () | | | () | | | () | | | | | | | | | | |
Net transition obligation | | | | | | | | | | | | | | | | | |
Settlement and curtailment | | | | | | | | | | | | | | | | | |
| Net periodic pension and postretirement costs | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
Settlement and curtailment charges were due primarily to employee severance and early retirement programs.
All of the amounts in the table above, other than service cost, are recognized in pension and other employee benefit costs in the consolidated statement of earnings.
% | | | % | | | % | | | % | | | % | | | % | Discount rate - interest cost | | | | | | | | | | | | | | | | | |
Expected rate of return on plan assets | | | | | | | | | | | | | | |
Rate of compensation increase | | | | | | | | | | | | | | |
Interest crediting rate | | | | | | | | | | | | | | |
Health care cost trend rate | | | | | | | | | | | | | | |
PMI’s expected rate of return on pension plan assets is determined by the plan assets’ historical long-term investment performance, current asset allocation and estimates of future long-term returns by asset class.
PMI and certain of its subsidiaries sponsor defined contribution plans. Amounts charged to expense for defined contribution plans totaled $ million, $ million and $ million for the years ended December 31, 2024, 2023 and 2022, respectively.
Plan Assets
PMI’s investment strategy for pension plans is based on an expectation that equity securities will outperform debt securities over the long term. Accordingly, the target allocation of PMI’s plan assets is broadly characterized as approximately % in equity securities and approximately % in debt securities and other assets. The strategy primarily utilizes indexed U.S. equity securities, international equity securities and investment-grade debt securities. PMI attempts to mitigate investment risk by rebalancing between equity and debt asset classes once a year or as PMI’s contributions and benefit payments are made.
| | $ | | | | | | | | Equity securities: | | | | | | | | |
U.S. securities | | | | | | | | | | |
International securities | | | | | | | | | | |
Investment funds(a) | | | | | | | $ | | | | | |
Government bonds | | | | | | | | | | | |
Corporate bonds | | | | | | | | | | |
Other | | | | | | | | | | | | (c) |
Total assets in the fair value hierarchy | $ | | | | $ | | | | $ | | | | $ | | | |
Investment funds measured at net asset value(b) | | | | | | | | | |
Total assets | $ | | | | | | | | | |
(a) Investment funds whose objective seeks to replicate the returns and characteristics of specified market indices (primarily MSCI — Europe, Switzerland, North America, Asia Pacific, Japan, Emerging Markets and Small Cap for equities / FTSE EMU, FTSE Non-EGBI EuroBIG, SBI AAA-BBB and JP Morgan EMBI for bonds / SXI Real Estate and KGAST for real estate) , primarily consist of mutual funds, common trust funds and commingled funds. Of these funds, % are invested in U.S. and international equities; % are invested in U.S. and international government bonds; % are invested in corporate bonds and % are invested in real estate.
(b) In accordance with FASB ASC Subtopic 820-10, certain investments measured at fair value using the net asset value per share practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position.
(c) Amount relates to annuity policies of which the fair value is calculated using an actuarial model.
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Asset Category
(in millions) | At December 31, 2023 | | Quoted Prices
In Active
Markets for
Identical
Assets/Liabilities
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | |
Cash and cash equivalents | $ | | | | $ | | | | | | | |
Equity securities: | | | | | | | | |
U.S. securities | | | | | | | | | | |
International securities | | | | | | | | | | |
Investment funds(a) | | | | | | | $ | | | | | |
Government bonds | | | | | | | | | | | |
Corporate bonds | | | | | | | | | | |
Other | | | | | | | | | | | | (c) |
Total assets in the fair value hierarchy | $ | | | | $ | | | | $ | | | | $ | | | |
Investment funds measured at net asset value(b) | | | | | | | | | |
Total assets | $ | | | | | | | | | |
(a) Investment funds whose objective seeks to replicate the returns and characteristics of specified market indices (primarily MSCI — Europe, Switzerland, North America, Asia Pacific, Japan, Emerging Markets for equities, and FTSE EMU, FTSE Non-EGBI EuroBIG, SBI AAA-BBB and JP Morgan EMBI for bonds), primarily consist of mutual funds, common trust funds and commingled funds. Of these funds, % were invested in U.S. and international equities; % were invested in U.S. and international government bonds; % were invested in corporate bonds, and % were invested in real estate.
(b) In accordance with FASB ASC Subtopic 820-10, certain investments measured at fair value using the net asset value per share practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position.
million in 2025 to its pension plans, based on current tax and benefit laws. However, this estimate is subject to change as a result of changes in tax and other benefit laws, as well as asset performance significantly above or below the assumed long-term rate of return on pension assets, or changes in interest and currency rates.
| | 2026 | | |
| 2027 | | |
| 2028 | | |
| 2029 | | |
| 2030 - 2034 | | |
PMI's expected future annual benefit payments for its postretirement health care plans are estimated to be not material through 2034.
Postemployment Benefit Plans
PMI and certain of its subsidiaries sponsor postemployment benefit plans covering certain designated salaried and hourly employees. The cost of these plans is charged to expense over the working life of the covered employees. Net postemployment costs were $ million, $ million and $ million for the years ended December 31, 2024, 2023 and 2022, respectively.
The amounts recognized in accrued postemployment costs net of plan assets on PMI's consolidated balance sheets at December 31, 2024 and 2023, were $ million and $ million, respectively.
The accrued postemployment costs were determined using a weighted-average discount rate of % and % in 2024 and 2023, respectively; an assumed ultimate annual weighted-average turnover rate of % and % in 2024 and 2023, respectively; assumed compensation cost increases of % in 2024 and % in 2023, and assumed benefits as defined in the respective plans. In accordance with local regulations, certain postemployment plans are funded. As a result, the accrued postemployment costs disclosed above are presented net of the related assets of $ million and $ million at December 31, 2024 and 2023, respectively. Postemployment costs arising from actions that offer employees benefits in excess of those specified in the respective plans are charged to expense when incurred.
Comprehensive Earnings (Losses)
) | | $ | () | | | $ | () | | | $ | () | | Prior service (cost) credit | | | | | | | () | | | | |
Net transition (obligation) asset | () | | | | | | | | | () | |
Deferred income taxes | | | | | | | | | | | |
Losses to be amortized | $ | () | | | $ | () | | | $ | () | | | $ | () | |
) | | $ | () | | | $ | () | | | $ | () | | Prior service (cost) credit | | | | | | | () | | | | |
Net transition (obligation) asset | () | | | | | | | | | () | |
Deferred income taxes | | | | | | | | | | | |
Losses to be amortized | $ | () | | | $ | () | | | $ | () | | | $ | () | |
The amounts recorded in accumulated other comprehensive losses at December 31, 2022, consisted of the following:
| | | | | | | | | | | | | | | | | | | | | | | |
(in millions) | Pension | | Post-
retirement | | Post-
employment | | Total |
Net (losses) gains | $ | () | | | $ | () | | | $ | () | | | $ | () | |
Prior service (cost) credit | | | | | | | () | | | | |
Net transition (obligation) asset | () | | | | | | | | | () | |
Deferred income taxes | | | | | | | | | | | |
Losses to be amortized | $ | () | | | $ | | | | $ | () | | | $ | () | |
| | $ | | | | $ | | | | $ | | | Prior service cost (credit) | () | | | | | | | | | () | |
Net transition obligation (asset) | | | | | | | | | | | |
Other income/expense: | | | | | | | |
Net losses (gains) | | | | | | | | | | | |
Prior service cost (credit) | | | | | | | | | | | |
Deferred income taxes | () | | | () | | | () | | | () | |
| | | | | | | | | | | |
Other movements during the year: | | | | | | | |
Net (losses) gains | | | | () | | | () | | | () | |
Prior service (cost) credit | | | | | | | | | | | |
| | |
| | |
Deferred income taxes | () | | | | | | | | | | |
| | | | | | | () | | | () | |
Total movements in other comprehensive earnings (losses) | $ | | | | $ | | | | $ | () | | | $ | | |
| | $ | | | | $ | | | | $ | | | Prior service cost (credit) | | | | | | | | | | | |
Net transition obligation (asset) | | | | | | | | | | | |
Other income/expense: | | | | | | | |
Net losses (gains) | | | | | | | | | | | |
Prior service cost (credit) | | | | | | | | | | | |
Deferred income taxes | () | | | () | | | () | | | () | |
| | | | | | | | | | | |
Other movements during the year: | | | | | | | |
Net (losses) gains | () | | | () | | | () | | | () | |
Prior service (cost) credit | | | | | | | | | | | |
| | |
| | |
| Deferred income taxes | | | | | | | | | | | |
| () | | | () | | | () | | | () | |
Total movements in other comprehensive earnings (losses) | $ | () | | | $ | () | | | $ | () | | | $ | () | |
The movements in other comprehensive earnings (losses) during the year ended December 31, 2022, were as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
(in millions) | Pension | | Post-
retirement | | Post-
employment | | Total |
Amounts transferred to earnings: | | | | | | | |
Amortization: | | | | | | | |
Net losses (gains) | $ | | | | $ | | | | $ | | | | $ | | |
Prior service cost (credit) | () | | | | | | | | | () | |
| | |
Other income/expense: | | | | | | | |
Net losses (gains) | | | | | | | | | | | |
Prior service cost (credit) | | | | | | | | | | | |
| Deferred income taxes | () | | | () | | | () | | | () | |
| | | | | | | | | | | |
Other movements during the year: | | | | | | | |
Net (losses) gains | | | | | | | | | | | |
Prior service (cost) credit | | | | | | | | | | | |
| | |
| | |
| Deferred income taxes | () | | | () | | | () | | | () | |
| | | | | | | | | | | |
Total movements in other comprehensive earnings (losses) | $ | | | | $ | | | | $ | | | | $ | | |
| | $ | | | | $ | | | Research and development expense | $ | | | | $ | | | | $ | | |
Advertising expense | $ | | | | $ | | | | $ | | |
Foreign currency net transaction (gains)/losses | $ | | | | $ | | | | $ | | |
Interest expense | $ | | | | $ | | | | $ | | |
Interest income | () | | | () | | | () | |
Interest expense, net | $ | | | | $ | | | | $ | | |
| $ | | | | Interest rate contracts | | | | |
| Commodity contracts | | | | |
| | |
| Derivative contracts not designated as hedging instruments: | | |
| Foreign exchange contracts | | | | |
| Total | $ | | | $ | | |
| | $ | | | | Other accrued liabilities | | $ | | | | $ | | | | Other assets | | | | | | | | Income taxes and other liabilities | | | | | | |
| Interest rate contracts | Other current assets | | | | | | | | Other accrued liabilities | | | | | | |
| Other assets | | | | | | | | Income taxes and other liabilities | | | | | | |
| Commodity contracts | Other current assets | | | | | | | | Other accrued liabilities | | | | | | |
| Other assets | | | | | | | | Income taxes and other liabilities | | | | | | |
| Derivative contracts not designated as hedging instruments: | | | | | | | | | | | |
| Foreign exchange contracts | Other current assets | | | | | | | | Other accrued liabilities | | | | | | |
| Other assets | | | | | | | | Income taxes and other liabilities | | | | | | |
Total gross amount derivatives contracts presented in the consolidated balance sheets | | | $ | | | | $ | | | | | | $ | | | | $ | | |
| Gross amounts not offset in the consolidated balance sheets | | | | | | | | | | | |
| Financial instruments | | | () | | | () | | | | | () | | | () | |
| Cash collateral received/pledged | | | () | | | () | | | | | () | | | () | |
| Net amount | | | $ | | | | $ | | | | | | $ | | | | $ | | |
PMI assesses the fair value of its derivative contracts using standard valuation models that use, as their basis, readily observable market inputs. The fair value of PMI’s foreign exchange forward contracts, foreign currency swaps and interest rate contracts is determined by using the prevailing foreign exchange spot rates and interest rate differentials, and the respective maturity dates of the instruments. The fair value of PMI’s currency options is determined by using a Black-Scholes methodology based on foreign
| $ | | | $ | | | | | | | | | | | | | | | | | | Net revenues | | $ | | | $ | | | $ | | | | | | |
| | | | | Cost of sales | | | | | | | | | | | |
| | | | | Marketing, administration and research costs | | | | | | | | | | | |
| | | | | Interest expense, net | | | | () | | () | | | | | |
| Interest rate contracts | | | | | | | | Interest expense, net | | | | | | () | | | | | |
| Commodity contracts | () | | () | | | | | Cost of sales | | () | | | | | | | | | |
| Fair value hedges: | | | | | | | | | | | | | |
| Interest rate contracts | | | | | Interest expense, net (a) | | | | | | $ | () | | $ | () | | $ | () | |
Net investment hedges (b): | | | | | | | | | | | | | |
| Foreign exchange contracts | | | () | | | | | Interest expense, net (c) | | | | | | | | | | | |
| | | | | Marketing, administration and research costs | | | | | | | | | | | |
| Derivative contracts not designated as hedging instruments: | | | | | | | | | | | | | |
| Foreign exchange contracts | | | | | Interest expense, net | | | | | | | | | | | |
| | | | | Marketing, administration and research costs (d) | | | | | | | | () | | () | |
| Total | $ | | | $ | () | | $ | | | | | | $ | | | $ | | | $ | | | | $ | | | $ | () | | $ | | | (a) The gains (losses) from these contracts are offset by the changes in the fair value of the hedged item
(b) Amount of gains (losses) on hedges of net investments principally related to changes in foreign currency exchange and interest rates between the Euro and U.S. dollar
(c) Represent the gains for amounts excluded from the effectiveness testing
(d) The gains (losses) from these contracts attributable to changes in foreign currency exchange rates are partially offset by the (losses) and gains generated by the underlying intercompany and third-party loans being hedged
million, of which $ million was recorded in current portion of long-term debt and $ million was recorded in long-term debt in the consolidated balance sheets. The cumulative amount of fair value gains/(losses) included in the carrying amount of the debt hedged was $ million as of December 31, 2024.
Hedges of Net Investments in Foreign Operations
PMI designates derivative contracts and certain foreign currency denominated debt and other financial instruments as net investment hedges, primarily of its Euro net assets. The amount of pre-tax gain/(loss) related to the non-derivative financial instruments, that was reported as a component of accumulated other comprehensive losses within currency translation adjustments, was $ million, $ million and $ million, for the years ended December 31, 2024, 2023 and 2022, respectively. Settlements of the derivative contracts designated as net investment hedges are included in cash flows from investing activities on PMI’s consolidated statements of cash flows.
Other Derivatives
PMI has entered into derivative contracts to hedge the foreign currency exchange and interest rate risks related to intercompany loans between certain subsidiaries, and third-party loans. While effective as economic hedges, no hedge accounting is applied for these contracts; therefore, the gains (losses) relating to these contracts are reported in PMI’s consolidated statements of earnings. Settlements of other derivative contracts are included primarily in cash flows from investing activities on PMI's consolidated statements of cash flows.
Qualifying Hedging Activities Reported in Accumulated Other Comprehensive Losses
Derivative gains or losses reported in accumulated other comprehensive losses are a result of qualifying hedging activity. Transfers of these gains or losses to earnings are offset by the corresponding gains or losses on the underlying hedged item.
| | $ | | | | $ | | |
Derivative (gains)/losses transferred to earnings | () | | | () | | | () | |
Change in fair value | | | | | | | | |
Gain/(loss) as of December 31, | $ | | | | $ | | | | $ | | |
At December 31, 2024, PMI expects $ million of derivative gains that are included in accumulated other comprehensive losses to be reclassified to the consolidated statement of earnings within the next 12 months. These gains are expected to be substantially offset by the statement of earnings impact of the respective hedged transactions.
Contingent Features
PMI’s derivative instruments do not contain contingent features.
million at December 31, 2024. For the year ended December 31, 2024, the gross unrecognized holding losses on these investments were $ million.
) | | $ | () | | | $ | () | | Pension and other benefits | () | | | () | | | () | |
Derivatives accounted for as hedges | | | | | | | | |
|
Total accumulated other comprehensive losses | $ | () | | | $ | () | | | $ | () | |
Reclassifications from Other Comprehensive Earnings
billion (approximately $ billion). This amount would be funded by an upfront payment equal to the companies’ cash and cash equivalents on hand plus court deposits (subject to an aggregate withholding of CAD million (approximately $ million) of working capital) and annual payments based on a percentage of the Companies’ aggregate net income after taxes (excluding that generated by alternative products such as heat-not-burn, nicotine pouches, and e-vapor) until the global settlement amount is paid in full. As stated in the Proposed Plan, the issue of allocation of the CAD billion aggregate settlement amount among RBH, ITL, and JTIM ("Allocation Issue") remains unresolved. RBH and its affiliates, including PMI and its indemnitees, would obtain a release of claims relating to the manufacture, marketing, sale, or use of or exposure
other Canadian manufacturers liable and found that the class members’ compensatory damages totaled approximately CAD billion (approximately $ billion), including pre-judgment interest. The trial court awarded compensatory damages on a joint and several liability basis, allocating % to our subsidiary (approximately CAD billion (approximately $ billion) including pre-judgment interest). In addition, the trial court awarded CAD (approximately $) in punitive damages, allocating CAD (approximately $) to RBH. The trial court estimated the disease class at members. RBH appealed to the Court of Appeal of Quebec. In October 2015, the Court of Appeal ordered RBH to furnish security totaling CAD million (approximately $ million) to cover both the Létourneau and Blais cases, which RBH has paid in installments through March 2017. The Court of Appeal ordered Imperial Tobacco Canada Ltd. to furnish security totaling CAD million (approximately $ million) in installments through June 2017. JTI Macdonald Corp. was not required to furnish security in accordance with plaintiffs’ motion. The Court of Appeal ordered that the security is payable upon a final judgment of the Court of Appeal affirming the trial court’s judgment or upon further order of the Court of Appeal.
On March 1, 2019, the Court of Appeal issued a decision largely affirming the trial court’s findings of liability and the compensatory and punitive damages award while reducing the total amount of compensatory damages to approximately CAD billion (approximately $ billion), including interest due to the trial court’s error in the calculation of interest. The compensatory damages award is on a joint and several basis with an allocation of % to RBH (approximately CAD billion (approximately $ billion), including pre-judgment interest). The Court of Appeal upheld the trial court’s findings that defendants violated the Civil Code of Quebec, the Quebec Charter of Human Rights and Freedoms, and the Quebec Consumer Protection Act by failing to warn adequately of the dangers of smoking and by conspiring to prevent consumers from learning of the dangers of smoking. The Court of Appeal further held that the plaintiffs either need not prove, or had adequately proven, that these faults were a cause of the class members’ injuries. In accordance with the judgment, defendants were required to deposit their respective portions of the damages awarded in both the Létourneau case described below and the Blais case, approximately CAD billion (approximately $ million), into trust accounts within days. RBH’s share of the deposit was approximately CAD million (approximately $ million). PMI recorded a pre-tax charge of $ million in its consolidated results, representing $ million net of tax, as tobacco litigation-related
other Canadian manufacturers liable and awarded a total of CAD million (approximately $ million) in punitive damages, allocating CAD million (approximately $ million) to RBH. The trial court estimated the size of the addiction class at members but declined to award compensatory damages to the addiction class because the evidence did not establish the claims with sufficient accuracy. The trial court found that a claims process to allocate the awarded punitive damages to individual class members would be too expensive and difficult to administer. On March 1, 2019, the Court of Appeal issued a decision largely affirming the trial court’s findings of liability and the total amount of punitive damages awarded allocating CAD million (approximately $ million), including interest to RBH. See the Blais description above for further detail concerning the security order pertaining to both Létourneau and Blais cases and the impact of the decision on PMI’s financial statements.
RBH and PMI believe the findings of liability and damages in both Létourneau and the Blais cases were incorrect and in contravention of applicable law on several grounds including, the following: (i) defendants had no obligation to warn class members who knew, or should have known, of the risks of smoking; (ii) defendants cannot be liable to class members who would have smoked regardless of what warnings were given; and (iii) defendants cannot be liable to all class members given the individual differences among class members.
In the third class action pending in Canada, Kunta v. Canadian Tobacco Manufacturers' Council, et al., The Queen's Bench, Winnipeg, Canada, filed June 12, 2009, we, RBH, and our indemnitees (PM USA and Altria), and other members of the industry are defendants. The plaintiff, an individual smoker, alleges her own addiction to tobacco products and chronic obstructive pulmonary disease (“COPD”), severe asthma, and mild reversible lung disease resulting from the use of tobacco products. She is seeking compensatory and punitive damages on behalf of a proposed class comprised of all smokers, their estates, dependents and family members, as well as restitution of profits, and reimbursement of government health care costs allegedly caused by tobacco products.
In the fourth class action pending in Canada, Adams v. Canadian Tobacco Manufacturers' Council, et al., The Queen's Bench, Saskatchewan, Canada, filed July 10, 2009, we, RBH, and our indemnitees (PM USA and Altria), and other members of the industry are defendants. The plaintiff, an individual smoker, alleges her own addiction to tobacco products and COPD resulting from the use of tobacco products. She is seeking compensatory and punitive damages on behalf of a proposed class comprised of all smokers who have smoked a minimum of cigarettes and have allegedly suffered, or suffer, from COPD, emphysema, heart disease, or cancer, as well as restitution of profits.
In the fifth class action pending in Canada, Semple v. Canadian Tobacco Manufacturers' Council, et al., The Supreme Court (trial court), Nova Scotia, Canada, filed June 18, 2009, we, RBH, and our indemnitees (PM USA and Altria), and other members of the industry are defendants. The plaintiff, an individual smoker, alleges his own addiction to tobacco products and COPD resulting from the use of tobacco products. He is seeking compensatory and punitive damages on behalf of a proposed class comprised of all smokers, their estates, dependents and family members, as well as restitution of profits, and reimbursement of government health care costs allegedly caused by tobacco products.
In the sixth class action pending in Canada, Dorion v. Canadian Tobacco Manufacturers' Council, et al., The Queen's Bench, Alberta, Canada, filed June 15, 2009, we, RBH, and our indemnitees (PM USA and Altria), and other members of the industry are defendants. The plaintiff, an individual smoker, alleges her own addiction to tobacco products and chronic bronchitis and severe sinus infections resulting from the use of tobacco products. She is seeking compensatory and punitive damages on behalf of a proposed class comprised of all smokers, their estates, dependents and family members, restitution of profits, and reimbursement of government health care costs allegedly caused by tobacco products. To date, we, our subsidiaries, and our indemnitees have not been properly served with the complaint.
In the seventh class action pending in Canada, McDermid v. Imperial Tobacco Canada Limited, et al., Supreme Court, British Columbia, Canada, filed June 25, 2010, we, RBH, and our indemnitees (PM USA and Altria), and other members of the industry are defendants. The plaintiff, an individual smoker, alleges his own addiction to tobacco products and heart disease resulting from the use of tobacco products. He is seeking compensatory and punitive damages on behalf of a proposed class comprised of all smokers who were alive on June 12, 2007, and who suffered from heart disease allegedly caused by smoking, their estates, dependents and family members, plus disgorgement of revenues earned by the defendants from January 1, 1954, to the date the claim was filed.
In the eighth class action pending in Canada, Bourassa v. Imperial Tobacco Canada Limited, et al., Supreme Court, British Columbia, Canada, filed June 25, 2010, we, RBH, and our indemnitees (PM USA and Altria), and other members of the industry are defendants.
cigarettes and have allegedly suffered, or suffer, from COPD, heart disease, or cancer, as well as restitution of profits.
Health Care Cost Recovery Litigation — Canada
In the first health care cost recovery case pending in Canada, 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, we, RBH, our indemnitee (PM USA), and other members of the industry are defendants. The plaintiff, the government of the province of British Columbia, brought a claim based upon legislation enacted by the province authorizing the government to file a direct action against cigarette manufacturers to recover the health care costs it has incurred, and will incur, resulting from a “tobacco related wrong.”
In the second health care cost recovery case filed in Canada, Her Majesty the Queen in Right of New Brunswick v. Rothmans Inc., et al., Court of Queen's Bench of New Brunswick, Trial Court, New Brunswick, Fredericton, Canada, filed March 13, 2008, we, RBH, our indemnitees (PM USA and Altria), and other members of the industry are defendants. The claim was filed by the government of the province of New Brunswick based on legislation enacted in the province. This legislation is similar to the law introduced in British Columbia that authorizes the government to file a direct action against cigarette manufacturers to recover the health care costs it has incurred, and will incur, as a result of a “tobacco related wrong.”
In the third health care cost recovery case filed in Canada, Her Majesty the Queen in Right of Ontario v. Rothmans Inc., et al., Ontario Superior Court of Justice, Toronto, Canada, filed September 29, 2009, we, RBH, our indemnitees (PM USA and Altria), and other members of the industry are defendants. The claim was filed by the government of the province of Ontario based on legislation enacted in the province. This legislation is similar to the laws introduced in British Columbia and New Brunswick that authorize the government to file a direct action against cigarette manufacturers to recover the health care costs it has incurred, and will incur, as a result of a “tobacco related wrong.”
In the fourth health care cost recovery case filed in Canada, Attorney General of Newfoundland and Labrador v. Rothmans Inc., et al., Supreme Court of Newfoundland and Labrador, St. Johns, Canada, filed February 8, 2011, we, RBH, our indemnitees (PM USA and Altria), and other members of the industry are defendants. The claim was filed by the government of the province of Newfoundland and Labrador based on legislation enacted in the province that is similar to the laws introduced in British Columbia, New Brunswick and Ontario. The legislation authorizes the government to file a direct action against cigarette manufacturers to recover the health care costs it has incurred, and will incur, as a result of a “tobacco related wrong.”
In the fifth health care cost recovery case filed in Canada, Attorney General of Quebec v. Imperial Tobacco Limited, et al., Superior Court of Quebec, Canada, filed June 8, 2012, we, RBH, our indemnitee (PM USA), and other members of the industry are defendants. The claim was filed by the government of the province of Quebec based on legislation enacted in the province that is similar to the laws enacted in several other Canadian provinces. The legislation authorizes the government to file a direct action against cigarette manufacturers to recover the health care costs it has incurred, and will incur, as a result of a “tobacco related wrong.”
In the sixth health care cost recovery case filed in Canada, Her Majesty in Right of Alberta v. Altria Group, Inc., et al., Supreme Court of Queen's Bench Alberta, Canada, filed June 8, 2012, we, RBH, our indemnitees (PM USA and Altria), and other members of the industry are defendants. The claim was filed by the government of the province of Alberta based on legislation enacted in the province that is similar to the laws enacted in several other Canadian provinces. The legislation authorizes the government to file a direct action against cigarette manufacturers to recover the health care costs it has incurred, and will incur, as a result of a “tobacco related wrong.”
In the seventh health care cost recovery case filed in Canada, Her Majesty the Queen in Right of the Province of Manitoba v. Rothmans, Benson & Hedges, Inc., et al., The Queen's Bench, Winnipeg Judicial Centre, Canada, filed May 31, 2012, we, RBH, our indemnitees (PM USA and Altria), and other members of the industry are defendants. The claim was filed by the government of the province of Manitoba based on legislation enacted in the province that is similar to the laws enacted in several other Canadian provinces. The legislation authorizes the government to file a direct action against cigarette manufacturers to recover the health care costs it has incurred, and will incur, as a result of a “tobacco related wrong.”
combustible tobacco product-related cases, including smoking and health, label-related, health care cost recovery, and public civil actions, have been filed by governmental entities or individual plaintiffs, or on behalf of a class or purported class of individual plaintiffs against a PMI entity. All resolved cases have been terminated in our favor and only a small number of cases remain pending. The pending cases include proposed class actions, health care cost recovery cases, public civil action, and individual cases. The amounts at issue in the pending individual cases would not have a material adverse effect on our consolidated financial statements, including our results of operations, cash flows, or financial position. Of the pending combustible tobacco product-related cases, were initially decided in favor of plaintiffs and remain on appeal, or are subject to an appeal. These cases include the Blais Class Action and the Létourneau Class Action, described above under the caption "Smoking and Health Litigation — Canada," and individual cases where final resolution in the amount of the verdict would not have a material adverse effect on our consolidated financial statements, including our results of operations, cash flows, or financial position.
Pending claims related to combustible tobacco products generally fall within the following categories:
Smoking and Health Proposed Class Actions: These cases primarily allege personal injury and are brought by individual plaintiffs on behalf of a class or purported class of individual plaintiffs. Plaintiffs' allegations of liability in these cases are based on various theories of recovery, including negligence, gross negligence, strict liability, fraud, misrepresentation, design defect, failure to warn, breach of express and implied warranties, violations of deceptive trade practice laws and consumer protection statutes. Plaintiffs in these cases seek various forms of relief, including compensatory and other damages, and injunctive and equitable relief. Defenses raised in these cases include licit activity, failure to state a claim, lack of defect, lack of proximate cause, assumption of the risk, contributory negligence, and statute of limitations.
As of December 31, 2024, there were cases brought on behalf of classes of individual plaintiffs pending against us, our subsidiaries or indemnitees, compared with such cases on December 31, 2023, and such cases on December 31, 2022, and such cases are described above under the caption “Smoking and Health Litigation — Canada.”
Health Care Cost Recovery Litigation: These cases, brought by governmental and non-governmental plaintiffs, seek reimbursement of health care cost expenditures allegedly caused by tobacco products. Plaintiffs' allegations of liability in these cases are based on various theories of recovery including unjust enrichment, negligence, negligent design, strict liability, breach of express and implied warranties, violation of a voluntary undertaking or special duty, fraud, negligent misrepresentation, conspiracy, public nuisance, defective product, failure to warn, sale of cigarettes to minors, and claims under statutes governing competition and deceptive trade practices. Plaintiffs in these cases seek various forms of relief including compensatory and other damages, and injunctive and equitable relief. Defenses raised in these cases include lack of proximate cause, remoteness of injury, failure to state a claim, adequate remedy at law, “unclean hands” (namely, that plaintiffs cannot obtain equitable relief because they participated in, and benefited from, the sale of cigarettes), and statute of limitations.
As of December 31, 2024, there were health care cost recovery cases pending against us, our subsidiaries or indemnitees in Brazil (), Canada (), Korea () and Nigeria (), compared with such cases on December 31, 2023 and such cases on December 31, 2022.
years, payment of anticipated costs of treating alleged smoking-related diseases for the next years, various forms of injunctive relief, plus punitive damages. We are in the process of making challenges to service and the court's jurisdiction. Currently, the case is stayed in the trial court pending the appeals of certain co-defendants relating to service objections. In the second health care cost recovery case in Nigeria, The Attorney General of Kano State v. British American Tobacco (Nigeria) Limited, et al., High Court of Kano State, Kano, Nigeria, filed May 9, 2007, we and other members of the industry are defendants. Plaintiff seeks reimbursement for the cost of treating alleged smoking-related diseases for the past years, payment of anticipated costs of treating alleged smoking-related diseases for the next years, various forms of injunctive relief, plus punitive damages. We are in the process of challenging the court's jurisdiction. Currently, the case is stayed in the trial court pending the appeals of certain co-defendants relating to service objections.
In the third health care cost recovery case in Nigeria, The Attorney General of Gombe State v. British American Tobacco (Nigeria) Limited, et al., High Court of Gombe State, Gombe, Nigeria, filed October 17, 2008, we and other members of the industry are defendants. Plaintiff seeks reimbursement for the cost of treating alleged smoking-related diseases for the past years, payment of anticipated costs of treating alleged smoking-related diseases for the next years, various forms of injunctive relief, plus punitive damages. In February 2011, the court ruled that the plaintiff had not complied with the procedural steps necessary to serve us. As a result of this ruling, plaintiff must re-serve its claim. We have not yet been re-served.
In the fourth health care cost recovery case in Nigeria, The Attorney General of Oyo State, et al., v. British American Tobacco (Nigeria) Limited, et al., High Court of Oyo State, Ibadan, Nigeria, filed May 25, 2007, we and other members of the industry are defendants. Plaintiffs seek reimbursement for the cost of treating alleged smoking-related diseases for the past years, payment of anticipated costs of treating alleged smoking-related diseases for the next years, various forms of injunctive relief, plus punitive damages. We challenged service as improper. In June 2010, the court ruled that plaintiffs did not have leave to serve the writ of summons on the defendants and that they must re-serve the writ. We have not yet been re-served.
In the fifth health care cost recovery case in Nigeria, The Attorney General of Ogun State v. British American Tobacco (Nigeria) Limited, et al., High Court of Ogun State, Abeokuta, Nigeria, filed February 26, 2008, we and other members of the industry are defendants. Plaintiff seeks reimbursement for the cost of treating alleged smoking-related diseases for the past years, payment of anticipated costs of treating alleged smoking-related diseases for the next years, various forms of injunctive relief, plus punitive damages. In May 2010, the trial court rejected our objections to the court's jurisdiction. We have appealed. Currently, the case is stayed in the trial court pending the appeals of certain co-defendants relating to service objections.
In the health care cost recovery case in Korea, the National Health Insurance Service v. KT&G, et. al., filed April 14, 2014, our subsidiary and other Korean manufacturers are defendants. Plaintiff alleges, among other things, that defendants concealed the health hazards of smoking, marketed to youth, added ingredients to make their products more harmful and addictive, and misled consumers into believing that Lights cigarettes are safer than regular cigarettes. The National Health Insurance Service seeks to recover damages allegedly incurred in treating patients with small cell lung cancer, squamous cell lung cancer, and squamous cell laryngeal cancer from 2003 to 2012. The trial court dismissed the case in its entirety on November 20, 2020. The Appellate court granted the Plaintiff a de novo appeal in 2021 and determined that the appellate proceedings will take place in stages: wrongful conduct/product defect allegations first, then causation and finally issues such as standing/direct action. The plaintiff's appeal remains pending.
public civil action pending against our subsidiary in Venezuela (), compared with such case on December 31, 2023, and such case on December 31, 2022.
In a public civil action in Venezuela, Federation of Consumers and Users Associations (“FEVACU”), et al. v. National Assembly of Venezuela and the Venezuelan Ministry of Health, Constitutional Chamber of the Venezuelan Supreme Court, filed April 29, 2008, we were not named as a defendant, but the plaintiffs published a notice pursuant to court order, notifying all interested parties to appear in the case. In January 2009, our subsidiary appeared in the case in response to this notice. The plaintiffs purport to represent the right to health of the citizens of Venezuela and claim that the government failed to protect adequately its citizens' right to health. The claim asks the court to order the government to enact stricter regulations on the manufacture and sale of tobacco products. In addition, the plaintiffs ask the court to order companies involved in the tobacco industry to allocate a percentage of their “sales or benefits” to establish a fund to pay for the health care costs of treating smoking-related diseases. In October 2008, the court ruled that plaintiffs have standing to file the claim and that the claim meets the threshold admissibility requirements. In December 2012, the court admitted our subsidiary and a subsidiary of British American Tobacco plc as interested third parties. In February 2013, our subsidiary answered the complaint. On February 27, 2024, the Attorney General of Venezuela filed, on behalf of defendants, a motion to dismiss the case for lack of prosecution.
Smoke-Free Products-Related Litigation
Claims have been filed against PMI and one or more subsidiaries related to ZYN nicotine pouches. These cases were filed either on behalf of an individual plaintiff, or on behalf of a purported class of individuals. Plaintiffs assert a variety of common law and statutory claims, and seek various forms of relief, including monetary and equitable relief.
In the first case, a putative class action, Kelly v. Philip Morris International Inc., et al., filed on March 19, 2024, before United States District Court for the Southern District of Florida, plaintiff alleges, among other things, addiction to nicotine resulting from the use of ZYN nicotine pouches (the "Kelly class action"). The complaint named PMI and Swedish Match North America LLC as defendants. Plaintiff purports to represent classes comprised of (i) all persons who purchased ZYN products in the United States, (ii) all residents of Florida who purchased ZYN products, and (iii) all residents of Florida who, at the time of their use of ZYN products, were under the age of 21, and who procured and used ZYN products. Plaintiff alleges, among other things, that defendants defectively designed ZYN products and sold them in an unreasonably unsafe and dangerous condition, marketed ZYN products to minors, and misrepresented or failed to warn consumers about information related to ZYN products, including information about health risks associated with these products. Plaintiff asserts strict liability design defect and failure to warn claims, as well as negligence and fraud claims and is seeking compensatory and punitive damages, attorney’s fees and costs, interest, and medical monitoring. On May 6, 2024, PMI and Swedish Match North America LLC filed motions to dismiss the complaint with prejudice. On August 20, 2024, the court granted Swedish Match North America LLC’s motion to dismiss the fraud claim and plaintiff’s request for medical monitoring, but denied the motion to dismiss other claims, denied PMI’s motion to dismiss without prejudice, and granted plaintiff’s request to conduct jurisdictional discovery. On December 4, 2024, plaintiff filed an amended complaint against PMI and Swedish Match North America LLC and added additional entities as named defendants: Swedish Match USA Inc., PMI Global Services Inc., and Philip Morris Global Brands Inc. On December 18, 2024, PMI, Swedish Match USA Inc., PMI Global Services Inc., and Philip Morris Global Brands Inc., filed motions to dismiss the amended complaint with prejudice, and Swedish Match North America LLC filed a motion to dismiss the fraud claim. At this time, no estimated loss has been accrued in the consolidated financial statements for this proceeding and we cannot determine the likelihood of loss, or reasonably estimate a range of loss, if any, from this proceeding.
In the second case, a putative class action, Bates-Ferreira v. Philip Morris International Inc., et al., filed March 29, 2024, before United States District Court for the Eastern District of California, plaintiff alleges, among other things, addiction to nicotine resulting from the use of ZYN nicotine pouches. The complaint named PMI and Swedish Match North America LLC as defendants. Plaintiff purports to represent classes comprised of (i) all persons who used ZYN products in the United States, (ii) all persons who used ZYN products in the United States while under the age of 18, (iii) all residents of California who used ZYN products, and (iv) all residents of California who used ZYN products while under the age of 18. Plaintiff alleges, among other things, that defendants made misrepresentations about ZYN products in their advertising and marketing, marketed ZYN products to minors, and misrepresented or failed to disclose to consumers information about ZYN products, including information about health risks associated with these products. Plaintiff asserts fraud, unjust enrichment, breach of implied warranty, and breach of consumer protection, unfair competition and advertising statutes claims and is seeking compensatory and punitive damages, disgorgement of profits, attorney’s fees and expenses, interest and other applicable injunctive relief. On June 7, 2024, PMI and Swedish Match North America LLC filed motions
additional entities as named defendants: Swedish Match USA Inc., PMI Global Services Inc., and Philip Morris Global Brands Inc. On December 18, 2024, PMI, Swedish Match USA Inc., PMI Global Services Inc., and Philip Morris Global Brands Inc., filed motions to dismiss the amended complaint with prejudice, and Swedish Match North America LLC filed a motion to dismiss the fraud claim. At this time, no estimated loss has been accrued in the consolidated financial statements for this proceeding and we cannot determine the likelihood of loss, or reasonably estimate a range of loss, if any, from this proceeding.
In the fourth case, an individual complaint, Lendinara v. Philip Morris International Inc., et al., filed July 30, 2024, before United States District Court for the Southern District of Florida, plaintiff alleges, among other things, addiction to nicotine resulting from the use of ZYN nicotine pouches. The complaint named PMI and Swedish Match North America LLC as defendants. He alleges, among other things, that defendants defectively designed ZYN products and sold them in an unreasonably unsafe and dangerous condition, marketed ZYN products to minors, and misrepresented or failed to warn consumers about information related to ZYN products, including information about health risks associated with these products. Plaintiff asserts strict liability design defect and failure to warn claims, as well as negligence and fraud claims, and is seeking compensatory and punitive damages, attorney’s fees and costs, interest, and medical monitoring. On September 19, 2024, the court granted the parties’ joint motion to apply its decisions on the motions to dismiss in Palmer to the Lendinara matter, including granting plaintiff’s request to conduct jurisdictional discovery and setting the same timeline for plaintiff to amend his complaint. On December 4, 2024, plaintiff filed an amended complaint against PMI and Swedish Match North America LLC and added additional entities as named defendants: Swedish Match USA Inc., PMI Global Services Inc., and Philip Morris Global Brands Inc. On December 18, 2024, PMI, Swedish Match USA Inc., PMI Global Services Inc., and Philip Morris Global Brands Inc., filed motions to dismiss the amended complaint with prejudice, and Swedish Match North America LLC filed a motion to dismiss the fraud claim. At this time, no estimated loss has been accrued in the consolidated financial statements for this proceeding and we cannot determine the likelihood of loss, or reasonably estimate a range of loss, if any, from this proceeding.
In the fifth case, a putative class action, Norris v. Philip Morris International Inc., et al., filed July 30, 2024, before United States District Court for the District of Connecticut, plaintiff alleges, among other things, addiction to nicotine resulting from the use of ZYN nicotine pouches. The complaint named PMI and Swedish Match North America LLC as defendants. Plaintiff purports to represent classes comprised of (i) all persons who used ZYN products in the United States, (ii) all persons who used ZYN products in the United States while under the age of 18, (iii) all residents of Florida who used ZYN products, and (iv) all residents of Florida who used ZYN products while under the age of 18. Plaintiff alleges, among other things, that defendants made misrepresentations about ZYN products in their advertising and marketing, marketed ZYN products to minors, and misrepresented or failed to disclose to consumers information about ZYN products, including information about health risks associated with these products. Plaintiff asserts unjust enrichment, and breach of consumer protection, unfair trade and advertising statutes claims and is seeking compensatory and punitive damages, disgorgement of profits, attorney’s fees and expenses, interest and other applicable injunctive relief. On September 24, PMI and Swedish Match North America LLC filed motions to dismiss the complaint with prejudice, and a motion to stay discovery. On October 2, 2024, Plaintiff filed a notice of voluntary dismissal without prejudice as to Swedish Match, which the Court ordered on October 3, 2024. At this time, no estimated loss has been accrued in the consolidated financial statements for this proceeding and we cannot determine the likelihood of loss, or reasonably estimate a range of loss, if any, from this proceeding.
District of Columbia Attorney General Investigation: On June 11, 2024, Swedish Match North America LLC received a subpoena from the office of the Attorney General of the District of Columbia (“D.C.”). The subpoena requested, among other things, information concerning Swedish Match North America LLC’s compliance with D.C.’s licensing regulations, age-verification requirements, and prohibition on the sale of flavored tobacco products, including with respect to ZYN nicotine pouches. Swedish Match North America LLC cooperated with the investigation, and on December 12, 2024, it executed an assurance of voluntary compliance with the office of the Attorney General to resolve the Attorney General's investigation, without admitting liability or
to D.C. and agreed to undertake certain limited conduct obligations moving forward.
Other Litigation
On November 18, 2024, a putative class action, Neumark v. Swedish Match North America LLC, was filed before United States District Court for the Eastern District of Virginia. The complaint named Swedish Match North America LLC as the defendant. Plaintiff alleges that Swedish Match North America LLC violated federal and state antitrust laws by, among other things, driving a competitor from the market through purportedly baseless litigation and entering into an allegedly anticompetitive agreement with PMI whereby PMI, through an indirect subsidiary, acquired Swedish Match North America LLC and eliminated itself as a competitor in the U.S. nicotine pouch market. Plaintiff asserts claims under the Sherman Antitrust Act, the Clayton Antitrust Act, state antitrust law, and for unjust enrichment. Plaintiff seeks to represent (i) all natural persons, businesses, entities, and corporations in the United States who purchased ZYN at retail during the class period; and (ii) all natural persons, businesses, entities, and corporations in the United States who live in states that have certain antitrust statutes who purchase ZYN at retail during the class period. Plaintiff is seeking damages (including treble damages as available under antitrust laws), costs, attorneys’ fees, disgorgement of profit, pre- and post-judgment interest, and declaratory and injunctive relief (including a declaration that the acquisition of Swedish Match North America LLC by PMI is unlawful and must result in divestiture or be enjoined). On January 15, 2025, Swedish Match North America LLC filed a motion to dismiss the complaint with prejudice. Subsequently thereto, Plaintiff informed Swedish Match North America LLC that he will file an amended complaint, which is due on February 10, 2025 At this time, no estimated loss has been accrued in the consolidated financial statements for this proceeding and we cannot determine the likelihood of loss, or reasonably estimate a range of loss, if any, from this proceeding.
The Department of Special Investigations of the government of Thailand ("DSI") conducted an investigation into alleged underpayment by Philip Morris (Thailand) Limited ("PM Thailand") of customs duties and excise taxes relating to imports from Indonesia covering the period 2000-2003. On January 26, 2017, the Public Prosecutor filed charges against PM Thailand and its former Thai employee in the Bangkok Criminal Court alleging that PM Thailand and its former employee jointly and with the intention to defraud the Thai government under-declared import prices of cigarettes to avoid full payment of taxes and duties in connection with import entries during the period from January 2002 to July 2003. The government sought a fine of approximately THB billion (approximately $ million). In May 2017, Thailand enacted a new customs act. The new act, which took effect in November 2017, substantially limits the amount of fines that Thailand could seek in these proceedings. PM Thailand believes that its declared import prices are in compliance with the Customs Valuation Agreement of the World Trade Organization and Thai law, and that the allegations of the Public Prosecutor are inconsistent with several decisions already taken by Thai Customs and a Thai court. Trial in the case began in November 2018 and concluded in December 2019. In March 2020, the trial court found our subsidiary guilty of under-declaration of the prices and imposed a fine of approximately THB million (approximately $ million). The trial court dismissed all charges against the individual defendant. In April 2020, as required by Thai law, our subsidiary paid the fine. This payment is included in other assets on the consolidated balance sheets and negatively impacted net cash provided by operating activities in the consolidated statements of cash flows in the period of payment. Our subsidiary filed an appeal of the trial court's decision. In addition, the Public Prosecutor filed an appeal of the trial court's decision challenging the dismissal of charges against the individual defendant and the amount of the fine imposed. The appellate court issued its decision on the appeals on January 31, 2023. The appellate court affirmed the findings of under-declaration of import prices of cigarettes but reduced the fine imposed by the trial court. The appellate court directed the Public Prosecutor to coordinate with customs officials to calculate such reduced fine in accordance with the appellate court’s decision. The appellate court affirmed the acquittal of the individual defendant. Our subsidiary has appealed the decision to the Supreme Court of Thailand. The Public Prosecutor has filed an appeal to the Supreme Court of Thailand challenging the dismissal of charges against the individual defendant and the amount of the fine. Thailand is required to refund any payment made by our subsidiary in excess of any fine assessed by the courts.
In July 2020, the Public Prosecutor’s office of Rome, Italy, notified our Italian subsidiary, Philip Morris Italia S.r.l. (“PM Italia”), as well as former or current employees and a former external consultant of PM Italia in July and March 2020, respectively, that it concluded a preliminary investigation against them for alleged contravention of anti-corruption laws and related disruption of trade freedom. The Public Prosecutor alleges that the individuals involved promised certain personal favors to government officials from January to July of 2018 in exchange for favorable treatment for PM Italia, and that PM Italia lacked appropriate organizational controls to prevent the alleged actions by the individuals. On September 21, 2020, the Public Prosecutor issued his indictment and referred the matter to the court. At the preliminary hearing held on May 11, 2021, the judge decided to refer all charges/defendants (including our affiliate) to trial. The first trial hearing took place on September 22, 2021. BAT has filed a civil claim against PM Italia claiming vicarious liability for the alleged wrongdoings of its former or current employees and seeking EUR million (approximately $ million) in damages. After various postponements, the trial started on September 25, 2023, and is expected to continue in 2025 through a series of evidentiary hearings. PM Italia believes it has strong defenses to the charges against it and will defend them vigorously.
million ($ million). Our affiliate believes it is probable that the Brazilian Tax Authority will issue assessments alleging underpayment of indirect taxes for subsequent fiscal years. We disagree with the position of the Brazilian Tax Authority, and will defend vigorously.
On December 21, 2023, we were informed that Future Technology K.K. (“FTKK”) filed an application with Tokyo Customs against Sojitz Corporation (“Sojitz”), Philip Morris Japan Limited’s (“PMJL”) importer and distributor, due to alleged infringement of JP7299432. FTKK sought an order stopping the importation of TEREA consumables. FTKK did not in its application seek any monetary damages or costs. PMJL entered an appearance in the proceeding as an interested party and filed its response to FTKK's application on January 31, 2024. The Customs hearing was held on May 28, 2024. On June 27, 2024 expert advisors to Customs provided their opinion that the patent at issue was not infringed. On June 28, 2024, FTKK withdrew its Customs application. The proceeding is now concluded. On January 26, 2024, PMJL filed a declaratory judgment action in Tokyo District Court seeking a declaration that JP7299432 is invalid and/or not infringed. The declaratory judgment action has now concluded following FTKK's waiver of its right to seek relief from PMJL for infringement of JP7299432, which effectively resolved PMJL's request for a declaration of no liability for infringement of that patent.
In July and August 2024, respectively, FTKK filed patent infringement actions against Sojitz, PMJL’s importer and distributor, for alleged infringement of patents by TEREA consumables. FTKK asserts a claim for damages. PMJL is obligated to indemnify Sojitz for damages and intervened in the matters. Merits briefing in the matters commenced in December 2024. In November and December 2024, FTKK filed additional patent infringement actions against Sojitz for alleged infringement of new FTKK patents by TEREA and SENTIA consumables. FTKK asserts a claim for damages in these actions. PMJL is obligated to indemnify Sojitz for damages and intervened in the matters. Merits briefing in these matters is expected to commence in the first half of 2025. On November 27, 2024, we were informed that FTKK filed a new application with Tokyo Customs against Sojitz, PMJL’s importer and distributor, on the basis of alleged infringement of another FTKK patent. FTKK is seeking an order stopping the importation of TEREA and SENTIA consumables. At this time, FTKK is not seeking any monetary damages or costs. PMJL has entered an appearance in the proceeding as an interested party and filed its opposition to FTKK’s application on January 9, 2025. On January 9, 2025, PMJL and Sojitz filed a declaratory judgment action against FTKK in Tokyo District Court with respect to the patent at issue in the pending Tokyo Customs matter on the basis that the relevant patent is not infringed or is invalid. PMJL intends to vigorously defend the matters commenced by FTKK and take steps to mitigate disruption, if any, that could result from FTKK’s claims.
Other patent challenges are pending in various jurisdictions.
We are also involved in additional litigation arising in the ordinary course of our business. While the outcomes of these proceedings are uncertain, management does not expect that the ultimate outcomes of other litigation, including any reasonably possible losses in excess of current accruals, will have a material adverse effect on our consolidated results of operations, cash flows or financial position.
types of arrangements, servicing and non-servicing. For servicing arrangements, PMI continues to service the sold trade receivables on an administrative basis and does not act on behalf of the unaffiliated financial institutions. When applicable, a servicing liability is recorded for the estimated fair value of the servicing. The amounts associated with the servicing liability were not material for the
billion and $ billion, respectively. PMI’s operating cash flows were positively impacted by the amount of the trade receivables sold and derecognized from the consolidated balance sheets, which remained outstanding with the unaffiliated financial institutions. The trade receivables sold that remained outstanding under these arrangements as of December 31, 2024, 2023 and 2022, were $ billion, $ billion and $ billion, respectively. The net proceeds received are included in cash provided by operating activities in the consolidated statements of cash flows. The difference between the carrying amount of the trade receivables sold and the sum of the cash received is recorded as a loss on sale of trade receivables within marketing, administration and research costs in the consolidated statements of earnings. For the years ended December 31, 2024, 2023 and 2022 the loss on sale of trade receivables was $ million, $ million and $ million, respectively.
million and $ million, respectively. These pre-tax charges were included in marketing, administration and research costs on the consolidated statements of earnings. For the year ended December 31, 2022, PMI did t record any charges related to restructuring activities.
IQOS products sourcing for the U.S. market
On February 1, 2024, a subsidiary of PMI entered into a settlement agreement (the “Settlement Agreement”) with Nicoventures Trading Limited (“NTV”), an affiliate of British American Tobacco p.l.c. (“BAT”). In accordance with its terms, the parties to the Settlement Agreement filed a joint motion to rescind the limited exclusion order and the cease-and-desist order issued by the International Trade Commission (“ITC”) on September 29, 2021, which was granted on March 11, 2024. Prior to their rescission, the orders prohibited the importation and sales of imported IQOS products to the United States of America (for further details of the Settlement Agreement, ITC order and its rescission, see Note 18. Contingencies). As a result, PMI has initiated a project in the first quarter of 2024 to restructure the sourcing of IQOS products to commercialize them in the United States. For further details on IQOS commercialization in the U.S. and the related agreement with Altria Group, Inc (“Altria”), see Note 3. Acquisitions and Divestitures.
In 2024, PMI recorded pre-tax restructuring charges of $ million related to this restructuring activity. This amount included contract termination costs with suppliers of $ million, including prepaid commitments of $ million. The amount also included asset impairment costs of $ million, primarily related to machinery and equipment and other assets, which were non-cash charges.
Venezuela
In the first quarter of 2024, PMI ceased its operations in Venezuela and as a result, recorded pre-tax restructuring charges of $ million. The amount primarily included non-cash charges related to the reclassification of accumulated foreign currency translation losses from other comprehensive losses of $ million and asset impairment charge of $ million related to land and buildings. This amount also included contract termination, severance and other related costs of $ million, which were paid in cash.
For details on the income tax impact of the transaction, see Note 12. Income Taxes.
Manufacturing Footprint Optimization - Germany
As a result of declining demand for cigarettes and other tobacco products in Europe, of PMI’s German subsidiaries, Philip Morris Manufacturing GmbH and F6 Cigarettenfabrik GmbH & Co. KG, initiated consultations with employee representatives on October 29, 2024, on a proposal to end production in the factories located in Berlin and in Dresden by the end of the second quarter of 2025, and to seek to agree on fair solutions for any impacted employees. Until the consultation process is concluded, the closure is not considered probable, and the total potential costs associated with this contemplated proposal cannot be determined and, as a result, no related costs were recorded in the fourth quarter of 2024.
million. This amount included contract termination costs for suppliers of $ million, including $ million of embedded finance lease terminations, payable in cash. This amount also included asset impairment costs of $ million, primarily related to machinery and equipment, which were non-cash charges.
Restructuring charges by Segment
| | $ | | | | Total reclassification of accumulated foreign currency translation losses from other comprehensive losses | | | | | |
Contract termination charges: (1) | | | | |
| Europe | | | | |
| SSEA, CIS & MEA | | | | |
| EA, AU & PMI DF | | | | |
| Americas | | | | | |
|
| Total contract termination charges | | | | | |
Asset impairment charges (1) | | | | |
| Europe | | | | |
| SSEA, CIS & MEA | | | | |
| EA, AU & PMI DF | | | | |
| Americas | | | | | |
|
| Total asset impairment charges | | | | | |
| Restructuring charges | $ | | | | | | (1) E-vapor products manufacturing optimization charges in 2023 were allocated across all geographical segments.
Movement in Restructuring Related Liabilities
|
| Charges, net | | |
| Cash spent | () | |
| Prepaid commitments | () | |
| Currency/other | | |
| Liability balance, December 31, 2024 | $ | | |
year to years, some of which include options to renew, which are reasonably certain to be renewed. Lease terms may also include options to terminate the lease. The exercise of a lease renewal or termination option is at PMI’s discretion.
| $ | — | | $ | | | | Other assets | | | — | | | | — | |
| Total lease assets | $ | | | $ | | | $ | | | $ | | |
| | | | |
| Liabilities: | | | | |
| Current | | | | |
| Current portion of long-term debt | $ | — | | $ | | | $ | — | | $ | | |
| Accrued liabilities - Other | | | — | | | | — | |
| Noncurrent | | | | |
| Long-term debt | — | | | | — | | | |
| Income taxes and other liabilities | | | — | | | | — | |
| Total lease liabilities | $ | | | $ | | | $ | | | $ | | |
| $ | | | $ | | | | Finance lease cost: | | | |
| Amortization of right-of-use assets | | | | | | |
| Interest on lease liabilities | | | | | | |
| Short-term lease cost | | | | | | |
| Variable lease cost | | | | | | |
| Total lease cost | $ | | | $ | | | $ | | |
| $ | | |
| 2026 | | | | |
| 2027 | | | | |
| 2028 | | | | |
| 2029 | | | | |
| Thereafter | | | | |
| Total lease payments | | | | |
| Less: Interest | | | | |
| Present value of lease liabilities | $ | | | $ | | |
| $ | — | | $ | | | $ | — | | $ | | | $ | — | | | Cash paid for amounts included in the measurement of lease liabilities in financing cash flows | $ | — | | $ | | | $ | — | | $ | | | $ | — | | $ | | |
| Leased assets obtained in exchange for new lease liabilities | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | |
| Weighted-average remaining lease term (years) | | | | | | |
Weighted-average discount rate(2) (3) | | % | | % | | % | | % | | % | | % |
(1) Cash paid included in the operating cash flows for finance leases is not material.
(2) PMI’s weighted-average discount rate for operating leases is based on its estimated pre-tax cost of debt adjusted for country-specific risk.
(3) PMI’s weighted-average discount rate for finance leases, excluding embedded leases, is based on its estimated pre-tax cost of debt adjusted for country-specific risk and where applicable the interest rate explicit in lease contracts.
days. All outstanding payable amounts related to suppliers that are participating in the SCF program are recorded in accounts payable in PMI's consolidated balance sheets. The associated payments are included in cash flows from operating activities within PMI's consolidated statement of cash flows.
| | Invoices added during the year | | |
| Invoices paid during the year | () | |
| Currency/Other | () | |
| Amount due to suppliers participating in the SCF program as of December 31, 2024 | $ | | |
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of
Philip Morris International Inc.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Philip Morris International Inc. and its subsidiaries (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of earnings, comprehensive earnings, stockholders’ (deficit) equity and cash flows for each of the three years in the period ended December 31, 2024, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Report of Management on Internal Control Over Financial Reporting. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Tobacco-Related Litigation for Smoking and Health Class Actions and Health Care Cost Recovery Cases
As described in Note 18 to the consolidated financial statements, the Company has nine smoking and health class actions and 17 health care cost recovery cases pending. The Company records provisions in the consolidated financial statements for pending litigation when management determines that an unfavorable outcome is probable and the amount of the loss can be reasonably estimated. Except as stated otherwise in Note 18, while it is reasonably possible that an unfavorable outcome in a case may occur, after assessing the information available, (i) management has not concluded that it is probable that a loss has been incurred in any of the pending smoking and health class actions and health care cost recovery cases; (ii) management is unable to estimate the possible loss or range of loss for any of the pending smoking and health class actions and health care cost recovery cases; and (iii) accordingly, no estimated loss has been accrued in the consolidated financial statements for unfavorable outcomes in these cases, if any.
The principal considerations for our determination that performing procedures relating to tobacco-related litigation for smoking and health class actions and health care cost recovery actions is a critical audit matter are (i) the significant judgment by management when assessing the probability of a loss being incurred and determining whether the amount or range of the potential loss for each case can be reasonably estimated and (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating audit evidence related to management’s assessment of the loss contingencies associated with smoking and health class actions and health care cost recovery actions.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s assessment of smoking and health class actions and health care cost recovery cases, including controls over determining whether the probability and range of loss can be reasonably estimated, as well as controls over financial statement disclosures. These procedures also included, among others (i) confirming with external and internal legal counsel the possibility or probability of an unfavorable outcome and the extent to which the loss or range of loss is reasonably estimable; (ii) evaluating the reasonableness of management’s assessment regarding whether an unfavorable outcome is reasonably possible or probable and reasonably estimable; and (iii) evaluating the sufficiency of the Company’s smoking and health class actions and health care cost recovery cases contingencies disclosures.
Impairment Related to the Rothmans, Benson & Hedges Equity Investment
As described in Note 6 to the consolidated financial statements, since the 2019 deconsolidation of Rothmans, Benson and Hedges Inc. (RBH), the Company has accounted for its continuing investment in the business as an equity security, without readily determinable fair value. On January 24, 2025, RBH filed an objection to approval of the proposed plan of compromise and arrangement (Proposed Plan) with the CCAA court. Developments, including the positions taken by RBH in this objection and the positions taken by other parties in related filings narrowed the range of possible outcomes with respect to the allocation of the aggregate settlement, which was determined to be an indicator that the Company’s investment in RBH may be impaired. Although there remains some uncertainty as to the final terms of the Proposed Plan, management evaluated its investment in RBH for potential impairment and concluded that the estimated fair value of its investment in RBH was lower than its carrying value. As a result, management performed a quantitative valuation of its investment in RBH as of December 31, 2024, and recorded a non-cash impairment charge of $2,316 million. The fair value of the continuing investment in RBH of $714 million represented the estimated fair value of the underlying business, net of management’s best estimate of the share of the aggregate global settlement amount that could be allocated to RBH, and was determined based on an income approach using a discounted cash flow analysis. In determining the fair value of the investment in RBH, management made various judgments, estimates and assumptions, the most significant of which were discount rate, sales volumes and operating margins related to the fair value of the combustible tobacco product business in Canada. In addition, significant estimates were made with respect to the allocation amount of the aggregate global settlement amount, as well as the deductibility of the settlement amount payment for income tax purposes in Canada.
The principal considerations for our determination that performing procedures relating to the impairment of the equity investment in RBH is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the Company’s investment in RBH; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to the discount rate, sales volumes and operating margins related to the fair value of the combustible tobacco product business in Canada and the estimate of the allocation amount of the aggregate global settlement amount as well as the deductibility of the settlement amount payment for income tax purposes in Canada; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s equity investment impairment assessment, including controls over the valuation of the Company’s investment in RBH. These procedures also included, among others (i) testing management’s process for developing the fair value estimate of the investment in RBH; (ii) evaluating the appropriateness of the discounted cash flow analysis; (iii) testing completeness and accuracy of underlying data used in the discounted cash flow analysis; (iv) evaluating the reasonableness of significant assumptions used by management related to the discount rate, sales volumes and operating margins related to the valuation of the combustible cigarette business and the estimate of the allocation amount of the aggregate global settlement amount; and (v) evaluating the deductibility of the settlement amount payment for income tax purposes in Canada. Evaluating management’s assumptions related to sales volumes and operating margins related to the valuation of the combustible tobacco product business in Canada and the estimate of the allocation amount of the aggregate global settlement amount involved evaluating whether the assumptions used by management were reasonable considering (i) the current economic conditions and recent operating results of RBH; (ii) the consistency with external market and industry data; and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the discounted cash flow analysis; (ii) the reasonableness of the discount rate assumption related to the valuation of the combustible tobacco product business in Canada; and (iii) the deductibility of the settlement amount payment for income tax purposes in Canada.
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We have served as the Company’s auditor since 2008.
Report of Management on Internal Control Over Financial Reporting
Management of Philip Morris International Inc. (“PMI” or "we") is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended. PMI’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. Internal control over financial reporting includes those written policies and procedures that:
•pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of PMI;
•provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America;
•provide reasonable assurance that receipts and expenditures of PMI are being made only in accordance with the authorization of management and directors of PMI; and
•provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on the consolidated financial statements.
Internal control over financial reporting includes the controls themselves, monitoring and internal auditing practices and actions taken to correct deficiencies as identified.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management assessed the effectiveness of PMI’s internal control over financial reporting as of December 31, 2024. Management based this assessment on criteria for effective internal control over financial reporting described in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Management’s assessment included an evaluation of the design of PMI’s internal control over financial reporting and testing of the operational effectiveness of its internal control over financial reporting. Management reviewed the results of its assessment with the Audit & Risk Committee of our Board of Directors.
Based on this assessment, management determined that, as of December 31, 2024, PMI maintained effective internal control over financial reporting.
PricewaterhouseCoopers SA, an independent registered public accounting firm, who audited and reported on the consolidated financial statements of PMI included in this report, has audited the effectiveness of PMI’s internal control over financial reporting as of December 31, 2024, as stated in their report herein.
February 6, 2025
Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Item 9A.Controls and Procedures.
PMI carried out an evaluation, with the participation of PMI’s management, including PMI’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of PMI’s 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 report. Based upon that evaluation, PMI’s Chief Executive Officer and Chief Financial Officer concluded that PMI’s disclosure controls and procedures are effective. There have been no changes in PMI’s internal control over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, PMI’s internal control over financial reporting.
The Report of Management on Internal Control over Financial Reporting and the Report of Independent Registered Public Accounting Firm are included in Item 8.
Item 9B.Other Information.
On February 4, 2025, Juan José Daboub informed PMI's board of directors (the “Board”) that he will not stand for re-election to the Board at our 2025 annual meeting of shareholders. Dr. Daboub’s decision not to stand for re-election to the Board was not a result of any disagreement with the Company.
During the three months ended December 31, 2024, no director or officer of PMI or a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as such terms are defined in Item 408(a) of Regulation S-K.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not applicable.
PART III
Except for the information relating to the executive officers set forth in Item 10 and the information relating to equity compensation plans set forth in Item 12, the information called for by Items 10-14 is hereby incorporated by reference to PMI’s definitive proxy statement for use in connection with its annual meeting of stockholders to be held on May 7, 2025, that will be filed with the SEC on or about March 27, 2025 (the “proxy statement”), and, except as indicated therein, made a part hereof.
Item 10.Directors, Executive Officers and Corporate Governance.
Information About Our Executive Officers as of February 6, 2025:
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| Name | | Office | | Age | |
| Jacek Olczak | | Chief Executive Officer | | 60 | | |
| Massimo Andolina | | President, Europe Region | | 56 | | |
| Emmanuel Babeau | | Chief Financial Officer | | 57 | | |
| Werner Barth | | President, Combustibles Category & Global Combustibles Marketing | | 60 | | |
| Lars Dahlgren | | President, Smoke-Free Oral Products & Chief Executive Officer Swedish Match | | 54 | | |
| Frederic de Wilde | | President, South and Southeast Asia, Commonwealth of Independent States, Middle East and Africa Region | | 57 | | |
| Reginaldo Dobrowolski | | Vice President and Controller | | 50 | | |
| Vassilis Gkatzelis | | President, East Asia, Australia, and PMI Duty Free Region | | 47 | |
| Yann Guérin | | Senior Vice President and General Counsel | | 48 | | |
| Stacey Kennedy | | President, Americas Region & CEO of PMI's U.S. Business | | 52 | | |
| Stefano Volpetti | | President, Smoke-Free Inhalable Products & Chief Consumer Officer | | 53 | | |
Jacek Olczak – Age 60
Mr. Olczak was appointed as our Chief Executive Officer in May 2021. From January 2018 until May 2021, Mr. Olczak has served as our Chief Operating Officer, and from August 2012 until December 31, 2017, he served as our Chief Financial Officer. He joined PMI’s Polish affiliate in 1993 and progressed through various roles in finance and general management positions across Europe, including as Managing Director of PMI’s markets in Poland and Germany and as President of the European Union Region, before being appointed Chief Financial Officer. Prior to joining PMI, Mr. Olczak worked for BDO, an international network of public accounting, tax, consulting and business advisory firms.
Massimo Andolina – Age 56
Mr. Andolina was appointed as our President, Europe Region in January 2023, prior to which he served as our Senior Vice President, Operations since January 2018. He joined PMI in 2008 as Director, Operations Planning, and has held several various roles at PMI, including Vice President, Operations of Latin America & Canada Region from December 2010 to July 2013; Vice President, EU Operations, from August 2013 to June 2016; and Vice President, PMI Transformation from July 2016 to December 2017. Prior to joining PMI, Mr. Andolina held a variety of international positions in strategic marketing and general management for Tetra Pak International and in operations for R.J. Reynolds International.
Emmanuel Babeau – Age 57
Mr. Babeau was appointed as our Chief Financial Officer in May 2020. Prior to joining PMI in May 2020, Mr. Babeau served as the Deputy Chief Executive Officer of Schneider Electric, an energy and automation digital solutions company. In this position, he was in charge of Finance and Legal Affairs. Mr. Babeau joined Schneider Electric in 2009 as Executive Vice President Finance and a member of the Management Board. Mr. Babeau also served on the board of Sanofi S.A., a French multinational healthcare company, from 2018 to 2020. Mr. Babeau started his career in 1990 at Arthur Andersen, and from 1993 to 2009, he progressed through various positions at Pernod Ricard, a beverage company, the latest being Chief Financial Officer and Group Deputy Managing Director. Mr. Babeau also served as a non-executive director at Sodexo, a French food services and facilities management company, from January 2016 until December 2021. He currently sits on the board of Davide Campari-Milano N.V.
Werner Barth – Age 60
Mr. Barth was appointed as our President, Combustibles Category & Global Combustibles Marketing in November 2021. Mr. Barth joined PMI in 1990 as Marketing Trainee at Philip Morris Germany and throughout his career he progressed through various roles at PMI in marketing, product management, brand supervision and general management. Prior to his current position, from 2015, Mr. Barth held the role of Senior Vice President, Marketing & Sales, and from 2018, he held the role of Senior Vice President, Commercial.
Lars Dahlgren – Age 54
Mr. Dahlgren was appointed as our President Smoke-Free Oral Products and CEO Swedish Match in January 2023. Prior to PMI’s acquisition of Swedish Match, he served as President and Chief Executive Officer of Swedish Match since June 2008, and as its Chief Financial Officer and Senior Vice President from July 2004 until June 2008. Prior to that, from April 2004 to July 2004, he was Acting Chief Financial Officer and Vice President of Finance at Swedish Match. Mr. Dahlgren joined Swedish Match in 1996 and has been a member of its Group Management Team since 2004.
Frederic de Wilde – Age 57
Mr. de Wilde was appointed as our President, South and Southeast Asia, Commonwealth of Independent States, Middle East and Africa Regions in January 2023, prior to which he served as President, European Union Region from July 2015. From July 2011 until July 2015, Mr. de Wilde held the role of Senior Vice President, Marketing & Sales. Mr. de Wilde joined PMI in 1992 as Brand Manager L&M at Philip Morris Belgium, and throughout his career, he progressed through various roles at PMI in marketing, sales and general management.
Reginaldo Dobrowolski – Age 50
Mr. Dobrowolski was appointed as our Vice President and Controller in August 2021. From May 2019 until August 2021, Mr. Dobrowolski was our Vice President, Corporate Financial Planning, Data & Reporting. Prior to that, Mr. Dobrowolski held various roles in our Finance department, including Director Corporate Financial Planning & Reporting from October 2014 until May 2019.
Vassilis Gkatzelis – Age 47
Mr. Gkatzelis was appointed as our President, East Asia, Australia, and PMI Duty Free Region in May 2024. Previously, he served as our President Director, PT HM Sampoerna Tbk, PMI’s affiliate listed on the Indonesia Stock Exchange, overseeing the smoke-free and combustible business since 2022. Mr. Gkatzelis joined PMI in 2003 as a management trainee at Philip Morris Greece during the acquisition and integration with Papastratos. He has held roles of increasing responsibilities in marketing, sales, and general management across markets in Asia, Europe, Middle East & Africa, and in the Global Operations Center in Switzerland, where he served as Director of Commercial Approach Strategy & Deployment. Since 2014, he assumed roles in general management, including General Manager, Morocco and Managing Director, Egypt & Levant, where he and his team built the smoke-free product category across all markets of the cluster. Before joining PMI, he worked at L’Oréal.
Yann Guérin - Age 48
Mr. Guérin was appointed as Senior Vice President and General Counsel in July 2023, having served as Senior Vice President and Global Head of Law and Compliance for June 2023. Previously, he served as Vice President and Associate General Counsel, Corporate from July 2021 to May 2023; as Vice President and Associate General Counsel, South & Southern Asia from November 2019 to June 2021; and as Vice President and Associate General Counsel, Middle-East, Africa & Global Duty Free from January 2018 to October 2019. Prior to that, since joining PMI in 2006, Mr. Guérin held a variety of legal roles across the company’s businesses, regions and functions. Before joining PMI, he was an attorney at Skadden Arps.
Stacey Kennedy – Age 52
Ms. Kennedy was appointed as our President, Americas Region & CEO of PMI's U.S. Business in January 2023. Previously, she served as our President, South and Southeast Asia Region from January 2018. From 2015 until 2018, Ms. Kennedy served as Managing Director for Germany, Austria, Croatia, and Slovenia. Ms. Kennedy began her career with Philip Morris USA in 1995 as a Territory Sales Manager. Throughout her career, she held a number of positions of increasing responsibility in commercial and general management.
Stefano Volpetti – Age 53
Mr. Volpetti was appointed as our President Smoke-Free Inhalable Products & Chief Consumer Officer in January 2023, having served as President Smoke-Free Products Category & Chief Consumer Officer from November 2021. Mr. Volpetti joined PMI in June 2019 as Chief Consumer Officer. From February 2016 until May 2019, Mr. Volpetti served as the Vice President & Brand Franchise Leader of a multi-functional, global business unit at Procter & Gamble, a multinational consumer goods company. Mr. Volpetti spent 22 years at Procter & Gamble, progressing through various roles with increasing responsibility locally in Italy and Mexico, and on a regional level for the European market. Mr. Volpetti also served as Chief Marketing Officer at Luxottica Group S.p.A, an Italian eyewear conglomerate, in 2015.
Insider Trading Policies and Procedures
We have an insider trading policy that governs the purchase, sale, and/or other dispositions of our securities that applies to our directors, officers, employees, and other covered persons and entities, that we believe is reasonably designed to promote compliance with insider trading laws, rules and regulations and applicable listing standards. A copy of our insider trading policy is filed with this Annual Report on Form 10-K as Exhibit 19.
Codes of Ethics and Corporate Governance
We have adopted a code of ethics, which we call the Code of Conduct. The Code of Conduct complies with requirements set forth in Item 406 of Regulation S-K, applies to our Board of Directors and to all of our employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, and persons performing similar functions. The Code of Conduct is available free of charge on our website at www.pmi.com.
In addition, we have adopted corporate governance guidelines and charters for our Audit and Risk, Compensation and Leadership Development, Science and Technology and Nominating and Corporate Governance committees of the Board of Directors. All of these documents are available free of charge on our website at www.pmi.com. Any waiver granted by Philip Morris International Inc. to its principal executive officer, principal financial officer or controller, or any person performing similar functions under our code of ethics, or certain amendments to the code of ethics, will be disclosed on our website at www.pmi.com.
The information on our website is not, and shall not be deemed to be, a part of this Report or incorporated into any other filings made with the SEC.
Also refer to Board Operations and Governance—Committees of the Board, Election of Directors—Process for Nominating Directors, Election of Directors—Director Nominees, Stock Ownership Information and Availability of Reports, Other Matters and 2026 Annual Meeting—2026 Annual Meeting sections of the proxy statement.
Item 11.Executive Compensation.
Refer to Compensation Discussion and Analysis, Compensation Tables, Compensation of Directors, and Pay Ratio sections of the proxy statement.
Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The number of shares to be issued upon exercise or vesting and the number of shares remaining available for future issuance under PMI’s equity compensation plans at December 31, 2024, were as follows:
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| Number of Securities to be Issued upon Exercise of Outstanding Options and Vesting of RSUs and PSUs (a) | | Weighted Average Exercise Price of Outstanding Options (b) | | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding Securities reflected in column (a)) (c) | |
Equity compensation plans
approved by stockholders | 7,242,974 | | 1 | $ | — | | | 20,045,796 | | |
1 Represents 4,542,654 shares of common stock that may be issued upon vesting of the restricted share units and 2,700,320 shares that may be issued upon vesting of the performance share units if maximum performance targets are achieved for each performance cycle. PMI has not granted options since the spin-off from Altria on March 28, 2008.
Also refer to Stock Ownership Information—Ownership of Equity Securities section of the proxy statement.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Refer to Related Person Transactions and Code of Conduct and Election of Directors—Independence of Nominees sections of the proxy statement.
Item 14.Principal Accounting Fees and Services.
Refer to Audit and Risk Committee Matters section of the proxy statement.
PART IV
Item 15.Exhibits and Financial Statement Schedules.
(a) Index to Consolidated Financial Statements and Schedules
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Consolidated Statements of Earnings for the years ended December 31, 2024, 2023 and 2022 | |
Consolidated Statements of Comprehensive Earnings for the years ended December 31, 2024, 2023 and 2022 | |
Consolidated Balance Sheets at December 31, 2024 and 2023 | |
Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023 and 2022 | |
Consolidated Statements of Stockholders’ (Deficit) Equity for the years ended December 31, 2024, 2023 and 2022 | |
| Notes to Consolidated Financial Statements | |
Report of Independent Registered Public Accounting Firm (PCAOB ID ) | |
| Report of Management on Internal Control Over Financial Reporting | |
Schedules have been omitted either because such schedules are not required or are not applicable.
(b) The following exhibits are filed as part of this Report:
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| 2.1 | | — | | |
| 2.2 | | — | | |
| 3.1 | | — | | |
| 3.2 | | — | | |
| 4.1 | | — | | |
| 4.2 | | — | | |
| 4.3 | | — | | |
| 4.4 | | — | | |
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| 10.4 | | __ | | Extension Agreement, effective February 7, 2017, to the Credit Agreement, dated as of February 12, 2013, among Philip Morris International Inc., the lenders party thereto, Citibank Europe PLC, UK Branch (formerly, Citibank International Limited), as administrative agent (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed January 30, 2017). | |
| 10.5 | | __ | | Extension Agreement, effective January 31, 2014, to Credit Agreement, dated as of February 12, 2013, among Philip Morris International Inc., the lenders party thereto and Citibank Europe PLC, UK Branch (formerly, The Royal Bank of Scotland plc), as Administrative Agent (incorporated by reference to Exhibit 10.3 to the Quarterly Report on Form 10-Q for the quarter ended March 31, 2014). | |
| 10.6 | | __ | | Extension Agreement, effective as of February 10, 2015, to Credit Agreement dated as of February 12, 2013, among Philip Morris International Inc., the lenders named therein and Citibank Europe PLC, UK Branch (formerly, The Royal Bank of Scotland plc), as Administrative Agent (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed January 29, 2015). | |
| 10.7 | | __ | | Amendment No. 1, dated as of July 20, 2015, to the Credit Agreement, dated as of February 12, 2013, among Philip Morris International Inc., the lenders named therein, The Royal Bank of Scotland plc, as resigning administrative agent, and Citibank Europe PLC, UK Branch (formerly, Citibank International Limited), as successor administrative agent (incorporated by reference to Exhibit 10.52 to the Annual Report on Form 10-K for the year ended December 31, 2015). | |
| 10.8 | | — | | Credit Agreement, dated as of October 1, 2015, among Philip Morris International Inc., the lenders named therein, Citibank Europe PLC, UK Branch (formerly, Citibank International Limited), as Facility Agent, and Citibank, N.A., as Swingline Agent (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed October 5, 2015). | |
| 10.9 | | —
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| 10.10 | | —
| | Extension Agreement, effective as of October 1, 2016, to the Credit Agreement dated as of October 1, 2015, among Philip Morris International Inc., lenders named therein, Citibank Europe PLC, UK Branch (formerly, Citibank International Limited), as Facility Agent, and Citibank, N.A., as Swingline Agent (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed August 31, 2016). | |
| 10.11 | | — | | Extension Agreement, effective as of October 1, 2017, to the Credit Agreement, dated as of October 1, 2015, among Philip Morris International Inc., the lenders party thereto and Citibank Europe PLC, UK Branch (formerly, Citibank International Limited), as Facility Agent, and Citibank N.A., as Swingline Agent (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed August 29, 2017). | |
| 10.12 | | —
| | Extension Agreement, effective as of February 6, 2018, to the Credit Agreement, dated as of February 12, 2013, among Philip Morris International Inc., the lenders named therein, Citibank Europe PLC, UK Branch (formerly, Citibank International Limited), as administrative agent (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed January 29, 2018). | |
| 10.13 | | —
| | Extension Agreement, effective as of February 5, 2019, to the Credit Agreement dated as of February 12, 2013, among Philip Morris International Inc., the lenders named therein, Citibank Europe PLC, UK Branch (formerly, Citibank International Limited), as administrative agent (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed January 29, 2019). | |
| 10.14 | | — | | Amendment and Extension Agreement, effective February 4, 2020, to the Credit Agreement, dated as of February 12, 2013, among Philip Morris International Inc., each lender named therein and Citibank Europe PLC, UK Branch (formerly, Citibank International Limited), as administrative agent (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed February 3, 2020). | |
| 10.15 | | — | | Credit Agreement, dated as of February 10, 2020, among Philip Morris International Inc., the lenders named therein, Citibank Europe PLC, UK Branch, as Facility Agent, and Citibank, N.A., as Swingline Agent (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed February 11, 2020). | |
| 10.16 | | — | | Amendment and Extension Agreement, effective February 2, 2021, to the Credit Agreement, dated as of February 12, 2013, among PMI, the lenders named therein and Citibank Europe PLC, UK Branch (legal successor to Citibank International Limited), as administrative agent (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed February 2, 2021). | |
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| 10.17 | | — | | Amendment and Extension Agreement, effective February 10, 2021, to the Credit Agreement, dated as of February 10, 2020, among PMI, the lenders named therein, Citibank Europe PLC, UK Branch, as facility agent, and Citibank, N.A., as swingline agent (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed February 2, 2021). | |
| 10.18 | | — | | Credit Agreement, dated as of September 29, 2021, among PMI, the lenders named therein, Citibank Europe PLC, UK Branch, as facility agent, and Citibank, N.A., as swingline agent (incorporated by reference to Exhibit 10.1to the Current Report on Form 8-K filed September 30, 2021). | |
| 10.19 | | — | | Amendment and Extension Agreement, effective February 1, 2022, to the Credit Agreement, dated as of February 12, 2013, among PMI, the lenders named therein and Citibank Europe PLC, UK Branch (legal successor to Citibank International Limited), as administrative agent (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed February 1, 2022). | |
| 10.20 | | — | | Amendment and Extension Agreement, effective February 10, 2022, to the Credit Agreement, dated as of February 10, 2020, among PMI, the lenders named therein, Citibank Europe PLC, UK Branch, as facility agent, and Citibank, N.A., as swingline agent (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed February 1, 2022). | |
| 10.21 | | — | | | |
| 10.22 | | — | | | |
| 10.23 | | — | | | |
| 10.24 | | — | | | |
| 10.25 | | — | | Amendment and Extension Agreement, dated as of September 20, 2022, to the Credit Agreement, dated as of September 29, 2021, among PMI, the lenders named therein, Citibank Europe PLC, UK Branch, as facility agent, and Citibank, N.A., as swingline agent (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed September 23, 2022). | |
| 10.26 | | — | | | |
| 10.27 | | — | | Amendment and Extension Agreement, dated as of September 20, 2023 among PMI, the lenders named therein, Citibank Europe PLC, UK Branch, as facility agent, and Citibank, N.A., as swingline agent (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed September 20, 2023). | |
| 10.28 | | — | | | |
| 10.29 | | — | | | |
| 10.30 | | — | | | |
| 10.31 | | — | | Terms Agreement, dated October 30, 2024, among PMI and BBVA Securities Inc., BofA Securities, Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, Wells Fargo Securities, LLC, Barclays Capital Inc., Citigroup Global Markets Inc., Mizuho Securities USA LLC and UBS Securities LLC, as representatives of the several underwriters named therein (incorporated by reference to Exhibit 1.2 to the Current Report on Form 8-K filed November 1, 2024). | |
| | | | | | | | | | | | | | |
| 10.35 | | — | | |
| 10.36 | | — | | |
| 10.37 | | — | | |
| 10.38 | | — | | |
| 10.39 | | — | | |
| 10.40 | | — | | |
| 10.41 | | — | | |
| 10.42 | | — | | |
| 10.43 | | — | | |
| 10.44 | | — | | |
| 10.45 | | — | | |
| 10.46 | | — | | |
| 10.47 | | — | | |
| 10.48 | | — | | |
| 10.49 | | — | | |
| 10.50 | | — | | |
| 10.51 | | — | | |
| 10.52 | | — | | |
| 10.53 | | — | | |
| 10.54 | | — | | |
| | | | | | | | | | | | | | |
| 10.55 | | — | | |
| 10.56 | | — | | |
| 10.57 | | — | | |
| 10.58 | | — | | |
| 10.59 | | — | | |
| 10.60 | | — | | |
| 10.61 | | — | | |
| 10.62 | | — | | |
| 10.63 | | — | | |
| 10.64 | | — | | |
| 10.65 | | — | | |
| 10.66 | | — | | |
| 10.67 | | — | | |
| 10.68 | | — | | |
| 10.69 | | — | | |
| 10.70 | | — | | |
| 10.71 | | — | | |
| 10.72 | | — | | |
| 10.73 | | — | | |
| 10.74 | | — | | |
| | | | | | | | | | | | | | |
| 10.75 | | — | | |
| 10.76 | | — | | |
| 10.77 | | — | | |
| 10.78 | | — | | |
| 10.79 | | — | | |
| 10.80 | | — | | |
| 10.81 | | — | | |
| 10.82 | | — | | |
| 10.83 | | — | | |
| 10.84 | | — | | |
| 10.85 | | — | | |
| 10.86 | | — | | |
| 10.87 | | — | | |
| 10.88 | | — | | |
| 10.89 | | — | | |
| 10.90 | | — | | |
| 10.91 | | — | | |
| 10.92 | | — | | |
| 10.93 | | — | | |
| 10.94 | | — | | |
| 10.95 | | — | | |
| 10.96 | | — | | |
| | | | | | | | | | | | | | |
| 19 | | — | | |
| 21 | | — | | |
| 23 | | — | | |
| 31.1 | | — | | |
| 31.2 | | — | | |
| 32.1 | | — | | |
| 32.2 | | — | | |
| 97 | | — | | |
| 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 | | — | | XBRL Taxonomy Extension Presentation Linkbase. |
| 104 | | — | | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
________
* Denotes management contract or compensatory plan or arrangement in which directors or executive officers are eligible to participate.
** Schedules and certain portions of this exhibit have been omitted pursuant to Item 601(a)(5) and Item 601(b)(10)(iv) of Regulation S-K.
x Denotes exhibits filed herewith.
The exhibits filed herewith do not include certain instruments with respect to long-term debt of PMI, inasmuch as the total amount of debt authorized under any such instrument does not exceed 10 percent of the total assets of PMI on a consolidated basis. PMI agrees, pursuant to Item 601(b)(4)(iii) of Regulation S-K, that it will furnish a copy of any such instrument to the SEC upon request.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
| | | | | |
| PHILIP MORRIS INTERNATIONAL INC. |
| |
| By: | /s/ JACEK OLCZAK |
| (Jacek Olczak
Chief Executive Officer) |
Date: February 6, 2025
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Jacek Olczak, Emmanuel Babeau, and Darlene Quashie Henry and each of them, acting individually, as his or her true and lawful attorney-in-fact, each with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K for the year ended December 31, 2024, and other documents in connection herewith and therewith, and to file the same, with all exhibits thereto, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection herewith and therewith and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated:
| | | | | | | | |
| Signature | Title | Date |
| | |
| /s/ JACEK OLCZAK | Chief Executive Officer and Director | February 6, 2025 |
| (Jacek Olczak) |
| /s/ EMMANUEL BABEAU | Chief Financial Officer | February 6, 2025 |
| (Emmanuel Babeau) |
| /s/ REGINALDO DOBROWOLSKI | Vice President and Controller | February 6, 2025 |
| (Reginaldo Dobrowolski) |
| /s/ ANDRÉ CALANTZOPOULOS | Non-Executive Chairman | February 6, 2025 |
| (André Calantzopoulos) |
| /s/ BONIN BOUGH | Director | February 6, 2025 |
| (Bonin Bough) |
| /s/ MICHEL COMBES | Director | February 6, 2025 |
| (Michel Combes) |
| /s/ DR. JUAN JOSÉ DABOUB | Director | February 6, 2025 |
(Juan José Daboub) |
| | | | | | | | |
/s/ WERNER GEISSLER | Director | February 6, 2025 |
(Werner Geissler) |
/s/ VICTORIA HARKER | Director | February 6, 2025 |
| (Victoria Harker) |
/s/ LISA A. HOOK | Director | February 6, 2025 |
| (Lisa A. Hook) |
/s/ KALPANA MORPARIA | Director | February 6, 2025 |
(Kalpana Morparia) |
/s/ ROBERT B. POLET | Director | February 6, 2025 |
(Robert B. Polet) |
/s/ DESSISLAVA TEMPERLEY | Director | February 6, 2025 |
(Dessislava Temperley) |
/s/ SHLOMO YANAI | Director | February 6, 2025 |
(Shlomo Yanai) |
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