Financial Data and Key Metrics Changes - The company reported a record adjusted diluted EPS of $2.24, reflecting a 17% growth year-over-year [3][7] - Adjusted operating income grew by 12.4% in dollar terms to $4.7 billion, with an adjusted operating income margin of over 43%, the highest in almost four years [3][6] - Organic net revenue growth was 7.5%, or approximately 9% excluding the Indonesia technical impact, driven by strong smoke-free performance and robust pricing [7][9] Business Line Data and Key Metrics Changes - The global smoke-free business achieved over $3 billion in quarterly gross profit for the first time, with smoke-free volume growth of 16.6% in Q3 [3][8] - IQOS saw a 9% growth in HTU adjusted in-market sales, while ZYN can shipments grew by 36% globally [4][15] - Combustibles delivered a good Q3 with better-than-expected volumes in Turkey and Egypt, despite a 3.2% decline in cigarette volumes [5][10] Market Data and Key Metrics Changes - The company’s smoke-free products are now commercialized in 100 markets, with a significant presence in Europe, Japan, and the U.S. [4][14] - In the U.S., ZYN captured the majority of Q3 category growth in both volume and value terms, with a 39% off-take growth [19][20] - International can volumes increased by 27%, with over 100% growth excluding Nordic countries [5][16] Company Strategy and Development Direction - The company is focused on geographic expansion and deploying a multi-category strategy to enhance growth, with all smoke-free brands now commercialized together in 25 markets [4][14] - Continued investment in marketing and brand equity for ZYN and IQOS is planned, with a target of $2 billion in cost savings over 2024-2026 [13][24] - The company anticipates maintaining a premium positioning for ZYN while expanding its market share in the nicotine pouch category [22][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving double-digit adjusted operating income and EPS growth in currency-neutral terms for the year [6][29] - The company expects a slower quarter in Q4 due to inventory adjustments and a higher tax rate, but maintains a positive outlook for continued growth in smoke-free products [30][54] - The anticipated adjusted effective tax rate for the year is around 22%, with expectations of strong performance from the smoke-free business [30][31] Other Important Information - The company raised its dividend for the 18th consecutive year to $5.88 per share, reflecting strong year-to-date performance and confidence in future growth [34] - The company is on track to exceed its 2024-2026 CAGR targets, indicating a strong growth profile within consumer packaged goods [32][33] Q&A Session Summary Question: Clarification on ZYN's growth and October performance - Management confirmed ZYN's leadership in the nicotine pouch market with over 60% market share and noted that the category has been growing between 30% and 40% [36][37] - The special promotion in Q3 was aimed at creating awareness and capturing market share, with a normalization of promotional activity expected moving forward [38][39] Question: Investment levels and margin structure for ZYN - The $100 million investment in Q3 was a one-off related to the special promotion, and management expects ZYN to maintain best-in-class margins despite increased promotional activity [48][50] - Future investments will continue to support both ZYN and IQOS, with a focus on building commercial presence and marketing capabilities in the U.S. [56][58] Question: Drivers behind full-year dollar EPS growth guidance raise - Management indicated that the EPS growth is driven by strong operating income growth, improved tax rates, and favorable interest costs [59][60] - The company remains optimistic about achieving strong growth in Q4, despite some technical impacts on inventory and pricing [53][54]

Financial Data and Key Metrics Changes - The company reported a record adjusted diluted earnings per share (EPS) of $2.24, reflecting a growth of 17% year-over-year [6][12][48] - Adjusted operating income (OI) grew by 12.4% in dollar terms to $4.7 billion, with an adjusted OI margin expansion of 120 basis points to 43.1% [11][20][45] - Organic net revenue growth was 7.5%, driven by strong smoke-free performance and robust pricing [12][14][44] Business Line Data and Key Metrics Changes - The smoke-free business achieved over $3 billion in quarterly gross profit for the first time, with a gross margin of 70% [6][17][19] - IQOS saw a 9% growth in heated tobacco unit (HTU) adjusted in-market sales, with HTU shipments growing by 15.5% [7][13][24] - ZYN can shipments grew by 36% globally, with a strong presence in 47 markets [25][31] Market Data and Key Metrics Changes - The company’s smoke-free products are now commercialized in 100 markets, with a significant launch in Taiwan [6][7] - In the U.S., ZYN captured the majority of category growth in both volume and value terms, holding over 60% market share [31][38] - The nicotine pouch category in the U.S. has been growing at over 40% over the last 18 months [37][38] Company Strategy and Development Direction - The company is focused on geographic expansion and multi-category strategy to enhance growth, with all smoke-free brands now commercialized together in 25 markets [6][7][22] - Continued investment in marketing and brand equity for ZYN and IQOS is planned, with expectations for sustained growth in the U.S. market [21][78] - The company aims to maintain best-in-class margins for ZYN while normalizing promotional activities [67][68] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving double-digit growth in adjusted operating income and EPS for the year, despite anticipated slower growth in Q4 [43][45][46] - The company expects a continued strong performance from its smoke-free business, with an acceleration in IQOS sales growth [46][70] - Management acknowledged the impact of increased promotional activities and a higher tax rate on Q4 performance but remains optimistic about long-term growth [72][74] Other Important Information - The company raised its dividend by 8.9% to $5.88 per share, marking the largest increase since 2013 [49] - A one-off investment of $100 million was made in Q3 for promotional activities, which is not expected to recur [60][66] Q&A Session Summary Question: Clarification on ZYN's growth and October performance - Management confirmed ZYN's market leadership with over 60% share and noted that promotional activities were normalized in Q3, impacting growth dynamics [53][54][56] Question: Details on ZYN's margin structure and investment levels - Management clarified that the $100 million investment was a one-off related to promotional activities and that they expect to maintain best-in-class margins moving forward [66][67] Question: Drivers behind full-year dollar EPS growth guidance - Management indicated that strong operating income growth and favorable tax and interest cost dynamics contributed to the raised EPS guidance [81][82]

Group 1 - Major U.S. companies in transportation, consumer goods, and industrial sectors have raised their earnings forecasts, signaling optimism in the market [1] - General Electric (GE) has increased its revenue growth forecast from "14%-16%" to "17%-20%" due to a recovery in air travel and rising demand for new engines, with its stock price up 80% this year [1] - Other companies like 3M, Northrop Grumman, and Raytheon Technologies have also raised profit guidance, expressing confidence in the upcoming year [1] Group 2 - In the consumer sector, Philip Morris has raised its profit guidance and committed to exceeding growth targets for 2024-2026, while Coca-Cola's CEO expressed confidence in achieving goals in the coming year [1] - General Motors (GM) has benefited from a surge in pickup truck sales and the extension of tariff relief on auto parts, leading to an upward revision of its annual forecast [1][2] - GM's CEO thanked President Trump for extending tariff relief until 2030, positioning the company favorably for domestic production and procurement [2] Group 3 - Many U.S. companies that have reported earnings so far have exceeded profit expectations, contrasting with previous quarters where CEOs withdrew future guidance due to uncertainties [2] - The current market sentiment is markedly different from the past, where companies aimed to lower investor expectations to manage potential negative outcomes [2][3] - Some stocks have reached historical highs as companies benefit from the shift in strategy and market conditions [3]

Core Insights - Philip Morris reported quarterly earnings of $2.24 per share, exceeding the Zacks Consensus Estimate of $2.1 per share, and up from $1.91 per share a year ago, representing an earnings surprise of +6.67% [1] - The company achieved revenues of $10.85 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 1.32% and increasing from $9.91 billion year-over-year [2] - Philip Morris shares have increased approximately 31.3% year-to-date, outperforming the S&P 500's gain of 14.5% [3] Earnings Outlook - The future performance of Philip Morris stock will largely depend on management's commentary during the earnings call and the company's earnings outlook [4] - The current consensus EPS estimate for the upcoming quarter is $1.81 on revenues of $10.7 billion, and for the current fiscal year, it is $7.51 on revenues of $40.84 billion [7] Industry Context - The Tobacco industry, to which Philip Morris belongs, is currently ranked in the bottom 37% of over 250 Zacks industries, indicating potential challenges ahead [8] - The performance of Philip Morris stock may be influenced by the overall industry outlook, as research indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [8]

Financial Performance - Q3 2025 adjusted diluted EPS reached $2.24[12], while YTD adjusted diluted EPS reached $5.83[14] - Q3 2025 net revenues totaled $10.8 billion[12], and YTD net revenues reached $30.3 billion[14] - The company is raising its adjusted diluted EPS forecast to $7.46-$7.56, including a $0.10 favorable currency impact[75] - The company is raising its operating cash flow forecast to over $11.5 billion[75] Smoke-Free Products (SFP) Growth - SFP expansion continues, now in 100 markets[5] - Q3 2025 total shipment volume was 204.9 billion units, with smoke-free products accounting for 46.9 billion units, a 16.6% increase vs PY[20] - YTD September 2025 total shipment volume was 592.7 billion units, with smoke-free products accounting for 134.8 billion units, a 14.3% increase vs PY[20] - VEEV volumes increased by 91% vs PY in Q3 2025[45] Regional Performance - Europe Q3 2025 IQOS, ZYN & VEEV shipment growth was +13%[48] - In Japan, PMI HTU adjusted share of market in Q3 2025 was 31.7%, a +1.8 percentage point increase vs PY[50] - In the U S, ZYN Nielsen retail value share reached 66.8% in Q3 2025[54] ZYN Performance - Global ZYN markets increased by 36% vs PY[43] - U S ZYN volumes increased by 37% vs PY[43] - International Nicotine Pouch Volumes increased by 27% vs PY[43]

Core Insights - Philip Morris International reported stronger-than-expected results for the third quarter, driven by growth in its smoke-free segment [4] - The company raised its profit outlook for the year, indicating positive momentum in its business operations [4] - Despite the positive earnings report, shares turned negative after an initial spike, attributed to the midpoint of the new profit guidance being lower than market expectations [4] Financial Performance - The third-quarter results exceeded analysts' expectations, showcasing the effectiveness of the company's transition towards smoke-free products [4] - The new profit guidance reflects a strategic adjustment in response to market conditions and operational performance [4] Market Reaction - Following the earnings announcement, there was a brief increase in share price, but it subsequently turned negative, highlighting market volatility and investor sentiment [4] - The reaction suggests that while the company is performing well, investor expectations may have been set higher than the revised guidance [4]

Core Insights - Philip Morris International has raised its full-year outlook following an increase in profit and revenue for the third quarter [1] Financial Performance - The company reported higher profit and revenue in the third quarter, contributing to the positive revision of its full-year outlook [1]

格隆汇10月21日｜烟草公司菲利普莫里斯第三季度调整后每股收益2.24美元，预估2.11美元；第三季度 净营收108.5亿美元，预估106.6亿美元。菲利普莫里斯盘前涨超2%。 ...

（文章来源：每日经济新闻） 每经AI快讯，10月21日，烟草公司菲利普莫里斯第三季度调整后每股收益2.24美元，预估2.11美元；第 三季度净营收108.5亿美元，预估106.6亿美元。 ...

[Glossary of Key Terms, Definitions and Explanatory Notes](index=2&type=section&id=Glossary%20of%20Key%20Terms%2C%20Definitions%20and%20Explanatory%20Notes) This section provides definitions for key operational, financial, and smoke-free product terms used throughout the report, along with explanatory notes [General Definitions and Operational Notes](index=3&type=section&id=General) This section defines core company references (PMI), comparison standards, and key operational metrics like total industry volume, combustible tobacco products, in-market sales (IMS), and total shipment volume - PMI's segment reporting was updated in January 2025, incorporating Wellness & Healthcare segment results into Europe and renaming 'PMI Duty Free' to 'PMI Global Travel Retail' (EA, AU & PMI GTR)[4](index=4&type=chunk) - Total shipment volume is defined as the combined total of cigarette, heated tobacco, oral smoke-free products (excluding snuff, snuff leaf, and U.S. chew), and e-vapor shipment volume in equivalent units[4](index=4&type=chunk) [Financial Definitions and Non-GAAP Measures](index=4&type=section&id=Financial) This section explains key financial terms and non-GAAP measures used by PMI, such as Cost of sales, Marketing, administration and research costs, Adjusted Operating Income Margin, Adjusted EBITDA, and Net debt - PMI utilizes **adjusted non-GAAP measures** (e.g., adjusted net revenues, operating income, EPS, operating cash flow) to provide insight into underlying business trends by excluding currency impacts, acquisitions, divestitures, restructuring costs, tax items, and amortization/impairment of acquired intangibles[6](index=6&type=chunk) - **Egypt was categorized as a highly inflationary economy** effective October 1, 2024, requiring the U.S. dollar to be treated as the functional currency for local affiliates[9](index=9&type=chunk) - PMI recorded a **pre-tax charge of $45 million** in Q3 2024 for Egypt sales tax assessments (2014-2016) and a **pre-tax loss of $199 million** in 2024 (primarily a $198 million impairment in Q3) due to the sale of Vectura Group Ltd. on December 31, 2024[9](index=9&type=chunk) [Smoke-Free Product Definitions](index=5&type=section&id=Smoke-Free) This section defines key terms related to PMI's smoke-free business (SFB) and products (SFPs), including heated tobacco units (HTU), IQOS devices, oral smokeless products, and e-vapor products - The **'Smoke-free business (SFB)'** encompasses all smoke-free products, wellness and healthcare products, and consumer accessories. **'Smoke-free products (SFPs)'** are products providing nicotine without combusting tobacco, such as heat-not-burn, e-Vapor, and oral smokeless, designed to generate lower levels of harmful chemicals[9](index=9&type=chunk) - **Total PMI SFPs users** are estimated based on the Nicotine Containing Products Tracker (NCPT) and SFP multicategory offtake volume trends, combining IQOS, oral smokeless, and e-Vapor users, and accounting for poly-users across categories[11](index=11&type=chunk) - **Conversion rates for oral smoke-free products** include 15-20 pouches per can for nicotine pouches and 21 pouches equivalent per can for snus products. **E-vapor products** are converted at one milliliter of e-vapor liquid equivalent to 10 units[12](index=12&type=chunk) [Select Financial Information and Reconciliations of Non-GAAP Financial Measures](index=8&type=section&id=Select%20Financial%20Information%20and%20Reconciliations%20of%20Non-GAAP%20Financial%20Measures) This section presents key financial schedules, including diluted EPS, net revenues, gross profit, operating income, balance sheets, debt ratios, and operating cash flow, with reconciliations to non-GAAP measures [Schedule 1: Diluted Earnings Per Share (EPS)](index=9&type=section&id=Schedule%201%3A%20Diluted%20Earnings%20Per%20Share%20%28EPS%29) This schedule provides diluted EPS for the third quarter and nine months ended September 30, 2025 and 2024, along with a detailed reconciliation of various adjustments impacting EPS | Period | 2025 Diluted EPS | 2024 Diluted EPS | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Quarters Ended Sep 30 | $2.23 | $1.97 | $0.26 | 13.2% | | Nine Months Ended Sep 30 | $5.89 | $4.89 | $1.00 | 20.4% | | Period | 2025 Net Earnings (millions) | 2024 Net Earnings (millions) | | :--- | :--- | :--- | | Quarters Ended Sep 30 | $3,478 | $3,082 | | Nine Months Ended Sep 30 | $9,207 | $7,636 | [Schedule 2: Reconciliation of Diluted EPS to Adjusted Diluted EPS, excluding Currency](index=11&type=section&id=Schedule%202%3A%20Reconciliation%20of%20Diluted%20EPS%20to%20Adjusted%20Diluted%20EPS%2C%20excluding%20Currency) This schedule reconciles reported diluted EPS to adjusted diluted EPS, both excluding currency impacts, for the third quarter and nine months ended September 30, highlighting the effect of various special items | Metric | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Reported Diluted EPS | $2.23 | $1.97 | 13.2% | | Reported Diluted EPS, excl. Currency | $2.15 | $1.97 | 9.1% | | Adjusted Diluted EPS | $2.24 | $1.91 | 17.3% | | Adjusted Diluted EPS, excl. Currency | $2.16 | $1.91 | 13.1% | | Metric | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Reported Diluted EPS | $5.89 | $4.89 | 20.4% | | Reported Diluted EPS, excl. Currency | $5.87 | $4.89 | 20.0% | | Adjusted Diluted EPS | $5.83 | $5.01 | 16.4% | | Adjusted Diluted EPS, excl. Currency | $5.81 | $5.01 | 16.0% | [Schedule 3: Net Revenues by Product Category (Quarters Ended September 30)](index=12&type=section&id=Schedule%203%3A%20Net%20Revenues%20by%20Product%20Category%20%28Quarters%20Ended%20September%2030%29) This schedule details net revenues by product category (Combustible Tobacco and Smoke-Free) and by region for the third quarter, showing reported figures and adjustments for currency, acquisitions, and divestitures | Metric | 2025 (millions) | 2024 (millions) | % Change | % Change excl. Currency | % Change excl. Currency & A/D | | :--- | :--- | :--- | :--- | :--- | :--- | | Total PMI Net Revenues | $10,845 | $9,911 | 9.4% | 5.5% | 5.9% | | Total Combustible Tobacco | $6,400 | $6,134 | 4.3% | 1.0% | 1.0% | | Total Smoke-Free | $4,445 | $3,777 | 17.7% | 12.9% | 13.9% | - Europe's **Smoke-Free net revenues grew by 19.5%** (14.1% excluding currency & A/D) to **$2,241 million** in Q3 2025, while Wellness & Healthcare within Europe declined by 24.3% (but grew 21.7% excluding currency & A/D)[24](index=24&type=chunk) [Schedule 4: Net Revenues by Product Category (Nine Months Ended September 30)](index=13&type=section&id=Schedule%204%3A%20Net%20Revenues%20by%20Product%20Category%20%28Nine%20Months%20Ended%20September%2030%29) This schedule presents net revenues by product category and region for the nine months ended September 30, with adjustments for currency, acquisitions, and divestitures | Metric | 2025 (millions) | 2024 (millions) | % Change | % Change excl. Currency | % Change excl. Currency & A/D | | :--- | :--- | :--- | :--- | :--- | :--- | | Total PMI Net Revenues | $30,286 | $28,172 | 7.5% | 7.1% | 7.5% | | Total Combustible Tobacco | $17,786 | $17,399 | 2.2% | 2.2% | 2.2% | | Total Smoke-Free | $12,500 | $10,773 | 16.0% | 15.0% | 16.1% | - The Americas region showed strong growth in **Smoke-Free net revenues, increasing by 27.9%** (28.2% excluding currency & A/D) to **$2,073 million** for the nine months ended September 30, 2025[27](index=27&type=chunk) [Schedule 5: Reconciliation of Gross Profit (Quarters Ended September 30)](index=14&type=section&id=Schedule%205%3A%20Reconciliation%20of%20Gross%20Profit%20%28Quarters%20Ended%20September%2030%29) This schedule reconciles reported gross profit to adjusted gross profit, excluding currency and acquisition/divestiture impacts, for combustible tobacco, smoke-free products, and total PMI for the third quarter | Metric | 2025 (millions) | 2024 (millions) | % Change | % Change excl. Currency | % Change excl. Currency & A/D | | :--- | :--- | :--- | :--- | :--- | :--- | | Gross Profit | $7,358 | $6,545 | 12.3% | - | - | | Adjusted Gross Profit | $7,363 | $6,559 | 12.3% | 8.6% | 8.7% | | Combustible Tobacco Adjusted Gross Profit | $4,253 | $3,947 | 7.7% | 4.8% | 4.8% | | Smoke-Free Adjusted Gross Profit | $3,110 | $2,612 | 19.1% | 14.4% | 14.8% | - Amortization of intangibles in Smoke-free products impacted cost of goods sold for both 2025 and 2024 third quarters[30](index=30&type=chunk) [Schedule 6: Reconciliation of Gross Profit (Nine Months Ended September 30)](index=15&type=section&id=Schedule%206%3A%20Reconciliation%20of%20Gross%20Profit%20%28Nine%20Months%20Ended%20September%2030%29) This schedule reconciles reported gross profit to adjusted gross profit, excluding currency and acquisition/divestiture impacts, for combustible tobacco, smoke-free products, and total PMI for the nine months ended September 30 | Metric | 2025 (millions) | 2024 (millions) | % Change | % Change excl. Currency | % Change excl. Currency & A/D | | :--- | :--- | :--- | :--- | :--- | :--- | | Gross Profit | $20,480 | $18,266 | 12.1% | - | - | | Adjusted Gross Profit | $20,496 | $18,312 | 11.9% | 11.6% | 11.8% | | Combustible Tobacco Adjusted Gross Profit | $11,737 | $11,173 | 5.1% | 5.2% | 4.9% | | Smoke-Free Adjusted Gross Profit | $8,759 | $7,139 | 22.7% | 21.7% | 22.5% | - **Smoke-Free Adjusted Gross Profit** showed significant growth of **22.7%** (22.5% excluding currency & A/D) for the nine months ended September 30, 2025[34](index=34&type=chunk) [Adjustments of Operating Income for the Impact of Currency and Acquisitions / Divestitures](index=16&type=section&id=Adjustments%20of%20Operating%20Income%20for%20the%20Impact%20of%20Currency%20and%20Acquisitions%20%2F%20Divestitures) This section provides a reconciliation of operating income, adjusted for currency and acquisition/divestiture impacts, across different regions for both the third quarter and nine months ended September 30 | Metric | 2025 (millions) | 2024 (millions) | % Change | % Change excl. Currency & A/D | | :--- | :--- | :--- | :--- | | Operating Income (Q3) | $4,263 | $3,654 | 16.7% | 10.8% | | Operating Income (9M) | $11,519 | $10,143 | 13.6% | 11.6% | [Schedule 8: Reconciliation of Operating Income to Adjusted Operating Income, excluding Currency and Acquisitions / Divestitures](index=17&type=section&id=Schedule%208%3A%20Reconciliation%20of%20Operating%20Income%20to%20Adjusted%20Operating%20Income%2C%20excluding%20Currency%20and%20Acquisitions%20%2F%20Divestitures) This schedule reconciles reported operating income to adjusted operating income, excluding currency and acquisition/divestiture impacts, for total PMI and by region for the third quarter and nine months ended September 30, detailing the impact of special items | Metric | 2025 (millions) | 2024 (millions) | % Change | % Change excl. Currency & A/D | | :--- | :--- | :--- | :--- | | Adjusted Operating Income (Q3) | $4,670 | $4,153 | 12.4% | 7.5% | | Adjusted Operating Income (9M) | $12,706 | $11,169 | 13.8% | 12.5% | [Schedule 9: Reconciliation of Reported Operating Income to Adjusted Operating Income (Quarters Ended September 30)](index=18&type=section&id=Schedule%209%3A%20Reconciliation%20of%20Reported%20Operating%20Income%20to%20Adjusted%20Operating%20Income%20%28Quarters%20Ended%20September%2030%29) This schedule provides a detailed reconciliation of reported operating income to adjusted operating income for the third quarter, breaking down the impact of special items by total PMI and by region | Item | 2025 (millions) | 2024 (millions) | Change Fav./(Unfav.) | | :--- | :--- | :--- | :--- | | Reported Operating Income | $4,263 | $3,654 | $609 | | Loss on sale of Vectura Group | — | $(198) | $198 | | Amortization of intangibles | $(250) | $(256) | $6 | | Germany excise tax classification litigation charge | $(176) | — | $(176) | | RBH (Canada) Plan Implementation | $19 | — | $19 | | Egypt sales tax charge | — | $(45) | $45 | | Adjusted Operating Income | $4,670 | $4,153 | $517 | - The Americas region experienced a significant decline in **reported operating income by 76.6% to $32 million** in Q3 2025, primarily due to a negative price variance of $(204) million, despite a positive volume/mix impact of $136 million[47](index=47&type=chunk) [Schedule 10: Reconciliation of Reported Operating Income to Adjusted Operating Income (Nine Months Ended September 30)](index=20&type=section&id=Schedule%2010%3A%20Reconciliation%20of%20Reported%20Operating%20Income%20to%20Adjusted%20Operating%20Income%20%28Nine%20Months%20Ended%20September%2030%29) This schedule provides a detailed reconciliation of reported operating income to adjusted operating income for the nine months ended September 30, breaking down the impact of special items by total PMI and by region | Item | 2025 (millions) | 2024 (millions) | Change Fav./(Unfav.) | | :--- | :--- | :--- | :--- | | Reported Operating Income | $11,519 | $10,143 | $1,376 | | Restructuring charges | $(243) | $(168) | $(75) | | Impairment of goodwill and other intangibles | $(41) | $(27) | $(14) | | Egypt sales tax charge | — | $(45) | $45 | | Loss on sale of Vectura Group | — | $(198) | $198 | | Germany excise tax classification litigation charge | $(176) | — | $(176) | | RBH (Canada) Plan Implementation | $19 | — | $19 | | Amortization of intangibles | $(746) | $(588) | $(158) | | Adjusted Operating Income | $12,706 | $11,169 | $1,537 | - For the nine months, **Europe's Adjusted Operating Income increased by 12.9% to $5,853 million**, while the Americas saw a **7.5% increase to $1,072 million**, despite a negative price variance of $(60) million[50](index=50&type=chunk)[53](index=53&type=chunk) [Schedule 11: Reconciliation of Adjusted Operating Income Margin, excluding Currency and Acquisitions / Divestitures](index=22&type=section&id=Schedule%2011%3A%20Reconciliation%20of%20Adjusted%20Operating%20Income%20Margin%2C%20excluding%20Currency%20and%20Acquisitions%20%2F%20Divestitures) This schedule reconciles adjusted operating income margin, excluding currency and acquisition/divestiture impacts, for total PMI and by region for both the third quarter and nine months ended September 30 | Metric | 2025 | 2024 | % Points Change | | :--- | :--- | :--- | :--- | | Adjusted Operating Income Margin (Q3) | 43.1% | 41.9% | 1.2 | | Adjusted Operating Income Margin excl. Currency (Q3) | 42.8% | 41.9% | 0.9 | | Adjusted Operating Income Margin excl. Currency & A/D (Q3) | 42.5% | 41.9% | 0.6 | | Metric | 2025 | 2024 | % Points Change | | :--- | :--- | :--- | :--- | | Adjusted Operating Income Margin (9M) | 42.0% | 39.6% | 2.4 | | Adjusted Operating Income Margin excl. Currency (9M) | 41.7% | 39.6% | 2.1 | | Adjusted Operating Income Margin excl. Currency & A/D (9M) | 41.5% | 39.6% | 1.9 | [Schedule 12: Condensed Statements of Earnings](index=23&type=section&id=Schedule%2012%3A%20Condensed%20Statements%20of%20Earnings) This schedule presents condensed statements of earnings for the third quarter and nine months ended September 30, detailing net revenues, cost of sales, gross profit, operating income, and net earnings attributable to PMI | Item | 2025 (millions) | 2024 (millions) | Change Fav./(Unfav.) | | :--- | :--- | :--- | :--- | | Net Revenues (Q3) | $10,845 | $9,911 | 9.4% | | Gross profit (Q3) | $7,358 | $6,545 | 12.4% | | Operating Income (Q3) | $4,263 | $3,654 | 16.7% | | Net Earnings attributable to PMI (Q3) | $3,478 | $3,082 | 12.8% | | Item | 2025 (millions) | 2024 (millions) | Change Fav./(Unfav.) | | :--- | :--- | :--- | :--- | | Net Revenues (9M) | $30,286 | $28,172 | 7.5% | | Gross profit (9M) | $20,480 | $18,266 | 12.1% | | Operating Income (9M) | $11,519 | $10,143 | 13.6% | | Net Earnings attributable to PMI (9M) | $9,207 | $7,636 | 20.6% | [Schedule 13: Condensed Balance Sheets](index=24&type=section&id=Schedule%2013%3A%20Condensed%20Balance%20Sheets) This schedule provides condensed balance sheets as of September 30, 2025, and December 31, 2024, detailing assets, liabilities, and stockholders' (deficit) equity | Item | Sep 30, 2025 (millions) | Dec 31, 2024 (millions) | | :--- | :--- | :--- | | Total assets | $67,061 | $61,784 | | Total liabilities | $76,045 | $71,654 | | Total PMI stockholders' deficit | $(10,914) | $(11,750) | - **Total assets increased by $5,277 million** from December 31, 2024, to September 30, 2025, while **total liabilities increased by $4,391 million**[63](index=63&type=chunk) [Schedule 14: Calculation of Total Debt to Adjusted EBITDA and Net Debt to Adjusted EBITDA Ratios](index=25&type=section&id=Schedule%2014%3A%20Calculation%20of%20Total%20Debt%20to%20Adjusted%20EBITDA%20and%20Net%20Debt%20to%20Adjusted%20EBITDA%20Ratios) This schedule presents the calculation of Total Debt to Adjusted EBITDA and Net Debt to Adjusted EBITDA ratios for the year ended September 30, 2025 (12 months rolling) and December 31, 2024, along with the components of Adjusted EBITDA | Ratio | Year Ended Sep 30, 2025 (12 months rolling) | Year Ended Dec 31, 2024 | | :--- | :--- | :--- | | Total Debt to Adjusted EBITDA | 2.92 | 2.93 | | Net Debt to Adjusted EBITDA | 2.69 | 2.66 | | Item | 12 months rolling (Sep 30, 2025) (millions) | Year Ended Dec 31, 2024 (millions) | | :--- | :--- | :--- | | Net Earnings | $9,112 | $7,503 | | Provision for income taxes | $2,934 | $3,017 | | Interest expense, net | $1,074 | $1,143 | | Depreciation, amortization and impairment of goodwill and other intangibles | $1,993 | $1,814 | | Adjusted EBITDA | $17,131 | $15,580 | [Schedule 15: Reconciliation of Operating Cash Flow to Operating Cash Flow, excluding Currency](index=26&type=section&id=Schedule%2015%3A%20Reconciliation%20of%20Operating%20Cash%20Flow%20to%20Operating%20Cash%20Flow%2C%20excluding%20Currency) This schedule reconciles net cash provided by operating activities (operating cash flow) to operating cash flow excluding currency impacts for the third quarter and nine months ended September 30 | Metric | 2025 (millions) | 2024 (millions) | % Change | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities (Q3) | $4,462 | $3,342 | 33.5% | | Net cash provided by operating activities, excl. currency (Q3) | $4,200 | $3,342 | 25.7% | | Metric | 2025 (millions) | 2024 (millions) | % Change | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities (9M) | $7,524 | $8,215 | (8.4)% | | Net cash provided by operating activities, excl. currency (9M) | $7,193 | $8,215 | (12.4)% |