\n| \n Adjusted diluted EPS<\/b><\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n 1.48<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n 1.44<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n 2.8<\/b><\/p>\n<\/td>\n | \n %<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n 2.80<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n 2.67<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n 4.9<\/b><\/p>\n<\/td>\n | \n %<\/b><\/p>\n<\/td>\n<\/tr>\n<\/table>\n Note: For details of pre-tax, tax and after-tax amounts, see Schedule 6, 7, 8 & 9<\/i><\/p>\n Special Items<\/b><\/p>\n The EPS impact of the following special items is shown in Table 1 and Schedules 6, 7, 8 and 9.<\/i><\/p>\n Acquisition-Related Items<\/i><\/b><\/p>\n \nIn the first half of 2025, we recorded net pre-tax expense items of $95 million (or $0.05 per share), including $70 million related to the U.S. International Trade Commission\u2019s exclusion order and cease-and-desist orders prohibiting the importation and sale of NJOY ACE<\/i> in the United States, partially offset by insurance recoveries from insurance contracts associated with the acquisition of NJOY. Also included was a $25 million non-cash, pre-tax charge related to a change in the fair value of contingent payments associated with the acquisition of NJOY.<\/p>\n Asset Impairment, Exit and Implementation Costs<\/i><\/b><\/p>\n \nIn the second quarter and first half of 2026, we recorded pre-tax charges of $88 million (or $0.04 per share) and $94 million (or $0.04 per share), respectively, primarily due to the USSTC Facilities Consolidation.<\/p>\n \nIn the first half of 2025, we recorded pre-tax charges of $903 million (or $0.53 per share), primarily due to a non-cash impairment charge of $873 million to the e-vapor reporting unit goodwill in our all other category.<\/p>\n Tobacco and Health and Certain Other Litigation Items<\/i><\/b><\/p>\n \nIn the second quarter and first half of 2026, we recorded pre-tax charges of $95 million (or $0.05 per share) and $97 million (or $0.04 per share), respectively, for tobacco and health and certain other litigation items and related interest costs.<\/p>\n \nIn the first half of 2025, we recorded pre-tax charges of $45 million (or $0.02 per share) for tobacco and health and certain other litigation items.<\/p>\n Amortization of Intangibles<\/i><\/b><\/p>\n \nIn the first half of 2026, we recorded pre-tax amortization of intangibles of $46 million (or $0.03 per share).<\/p>\n \nIn the second quarter and first half of 2025, we recorded pre-tax amortization of intangibles of $37 million (or $0.02 per share) and $74 million (or $0.04 per share), respectively.<\/p>\n ABI-Related Special Items<\/i><\/b><\/p>\n \nIn the second quarter and first half of 2026, we recorded net pre-tax losses of $77 million (or $0.04 per share) and $78 million (or $0.04 per share), respectively, primarily due to a dilution loss resulting from ABI\u2019s share activity that reduced our ABI ownership interest, partially offset by mark-to-market gains on certain ABI financial instruments associated with its share commitments.<\/p>\n \nThe ABI-related special items include our respective share of the amounts recorded by ABI and additional adjustments related to (i) the conversion of ABI-related special items from international financial reporting standards to GAAP and (ii) adjustments to our investment required under the equity method of accounting.<\/p>\n Income Tax Items<\/i><\/b><\/p>\n \nIn the second quarter and first half of 2026, we recorded income tax items of $42 million (or $0.03 per share) and $30 million (or $0.02 per share), respectively, primarily due to a tax benefit from the resolution of prior-year tax audits, partially offset by tax expense associated with a tax basis adjustment related to our investment in ABI.<\/p>\n SMOKEABLE PRODUCTS<\/b><\/p>\n Revenues and OCI<\/b><\/p>\n Second Quarter<\/b><\/p>\n\n- \nNet revenues increased 0.7%, primarily driven by higher pricing, partially offset by higher promotional investments, lower shipment volume and a higher percentage of discount shipment volume relative to premium versus the prior year (volume mix change). Revenues net of excise taxes increased 2.0%.<\/p>\n<\/li>\n<\/ul>\n
\n- \nReported OCI increased 0.4%, primarily driven by higher pricing and higher refunds of taxes and duties paid on imported cigarettes, partially offset by higher promotional investments, lower shipment volume, volume mix change, higher tobacco and health and certain other litigation items and higher costs.<\/p>\n<\/li>\n<\/ul>\n
\n- \nAdjusted OCI increased 2.4%, primarily driven by higher pricing and higher refunds of taxes and duties paid on imported cigarettes, partially offset by higher promotional investments, lower shipment volume, volume mix change and higher costs. Adjusted OCI margins increased by 0.3 percentage points to 64.8%.<\/p>\n<\/li>\n<\/ul>\n
First Half<\/b><\/p>\n\n- \nNet revenues increased 1.7%, primarily driven by higher pricing, partially offset by higher promotional investments, lower shipment volume and volume mix change. Revenues net of excise taxes increased 3.5%.<\/p>\n<\/li>\n<\/ul>\n
\n- \nReported and adjusted OCI increased 4.0% and 4.2%, respectively, primarily driven by higher pricing and higher refunds of taxes and duties paid on imported cigarettes, partially offset by higher promotional investments, lower shipment volume, volume mix change and higher costs. Adjusted OCI margins increased by 0.4 percentage points to 64.9%.<\/p>\n<\/li>\n<\/ul>\n
\n\n| \n Table 2 – Smokeable Products: Revenues and OCI ($ in millions)<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n | \n| \n \n\u00a0<\/p>\n<\/td>\n | \n Second Quarter<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n Six Months Ended June 30,<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n 2026<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n 2025<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n Change<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n 2026<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n 2025<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n Change<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n Net revenues<\/b><\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n 5,392<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n 5,357<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n 0.7<\/b><\/p>\n<\/td>\n | \n %<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n 10,150<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n 9,979<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n 1.7<\/b><\/p>\n<\/td>\n | \n %<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \nExcise taxes<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n(732<\/p>\n<\/td>\n | \n \n)<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n(787<\/p>\n<\/td>\n | \n \n)<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n(1,380<\/p>\n<\/td>\n | \n \n)<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n(1,502<\/p>\n<\/td>\n | \n \n)<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n | \n| \n Revenues net of excise taxes<\/b><\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n 4,660<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n 4,570<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n 2.0<\/b><\/p>\n<\/td>\n | \n %<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n 8,770<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n 8,477<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n 3.5<\/b><\/p>\n<\/td>\n | \n %<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n | \n| \n Reported OCI<\/b><\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n 2,942<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n 2,930<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n 0.4<\/b><\/p>\n<\/td>\n | \n %<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n 5,615<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n 5,399<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n 4.0<\/b><\/p>\n<\/td>\n | \n %<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \nNPM Adjustment Items<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u2014<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u2014<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n(4<\/p>\n<\/td>\n | \n \n)<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u2014<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nAsset impairment, exit and implementation costs<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n9<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n13<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n14<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n26<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nTobacco and health and certain other litigation items<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n67<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n4<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n69<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n40<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n | \n| \n Adjusted OCI<\/b><\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n 3,018<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n 2,947<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n 2.4<\/b><\/p>\n<\/td>\n | \n %<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n 5,694<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n 5,465<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n 4.2<\/b><\/p>\n<\/td>\n | \n %<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n Reported OCI margins 1<\/sup><\/b><\/p>\n<\/td>\n| \n \n\u00a0<\/p>\n<\/td>\n | \n 63.1<\/b><\/p>\n<\/td>\n | \n %<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n 64.1<\/b><\/p>\n<\/td>\n | \n %<\/b><\/p>\n<\/td>\n | \n (1.0) pp<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n 64.0<\/b><\/p>\n<\/td>\n | \n %<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n 63.7<\/b><\/p>\n<\/td>\n | \n %<\/b><\/p>\n<\/td>\n | \n 0.3 pp<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n Adjusted OCI margins 1<\/sup><\/b><\/p>\n<\/td>\n| \n \n\u00a0<\/p>\n<\/td>\n | \n 64.8<\/b><\/p>\n<\/td>\n | \n %<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n 64.5<\/b><\/p>\n<\/td>\n | \n %<\/b><\/p>\n<\/td>\n | \n 0.3 pp<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n 64.9<\/b><\/p>\n<\/td>\n | \n %<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n 64.5<\/b><\/p>\n<\/td>\n | \n %<\/b><\/p>\n<\/td>\n | \n 0.4 pp<\/b><\/p>\n<\/td>\n<\/tr>\n<\/table>\n 1<\/sup><\/i>Reported and adjusted OCI margins are calculated as reported and adjusted OCI, respectively, divided by revenues net of excise taxes.<\/i><\/p>\nShipment Volume<\/b><\/p>\n Second Quarter<\/b><\/p>\n\n- \nSmokeable products segment reported domestic cigarette shipment volume decreased 3.2%, primarily driven by the industry\u2019s decline rate (impacted by continued discretionary income pressures on ANCs), partially offset by trade inventory movements and retail share gains.<\/p>\n<\/li>\n<\/ul>\n
\n- \nWhen adjusted for trade inventory movements, smokeable products segment domestic cigarette shipment volume decreased by an estimated 4.5%.<\/p>\n<\/li>\n<\/ul>\n
\n- \nWhen adjusted for trade inventory movements, total domestic cigarette industry volume decreased by an estimated 5%.<\/p>\n<\/li>\n<\/ul>\n
\n- \nReported cigar shipment volume increased 5.0%.<\/p>\n<\/li>\n<\/ul>\n
First Half<\/b><\/p>\n\n- \nSmokeable products segment reported domestic cigarette shipment volume decreased 2.8%, primarily driven by the industry\u2019s decline rate (impacted by continued discretionary income pressures on ANCs), partially offset by trade inventory movements and retail share gains.<\/p>\n<\/li>\n<\/ul>\n
\n- \nWhen adjusted for trade inventory movements, smokeable products segment domestic cigarette shipment volume decreased by an estimated 4%.<\/p>\n<\/li>\n<\/ul>\n
\n- \nWhen adjusted for trade inventory movements, total domestic cigarette industry volume decreased by an estimated 5%.<\/p>\n<\/li>\n<\/ul>\n
\n- \nReported cigar shipment volume increased 2.6%.<\/p>\n<\/li>\n<\/ul>\n
\n\n| \n Table 3 – Smokeable Products: Reported Shipment Volume (sticks in millions)<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | | \n\n \n\u00a0<\/p>\n<\/td>\n | | \n\n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | | \n\n \n\u00a0<\/p>\n<\/td>\n | | \n\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n | \n| \n \n\u00a0<\/p>\n<\/td>\n | \n Second Quarter<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n Six Months Ended June 30,<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \n\u00a0<\/p>\n<\/td>\n | \n 2026<\/b><\/p>\n<\/td>\n | | \n\n 2025<\/b><\/p>\n<\/td>\n | | \n\n Change<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n 2026<\/b><\/p>\n<\/td>\n | | \n\n 2025<\/b><\/p>\n<\/td>\n | | \n\n Change<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n Cigarettes:<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | | \n\n \n\u00a0<\/p>\n<\/td>\n | | \n\n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | | \n\n \n\u00a0<\/p>\n<\/td>\n | | \n\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n | \n| \n Marlboro<\/i><\/b><\/p>\n<\/td>\n | \n \n13,389<\/p>\n<\/td>\n | | \n\n \n14,458<\/p>\n<\/td>\n | | \n\n \n(7.4<\/p>\n<\/td>\n | \n \n)%<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n25,349<\/p>\n<\/td>\n | | \n\n \n27,436<\/p>\n<\/td>\n | | \n\n \n(7.6<\/p>\n<\/td>\n | \n \n)%<\/p>\n<\/td>\n<\/tr>\n | \n| \n Other premium<\/b><\/p>\n<\/td>\n | \n \n678<\/p>\n<\/td>\n | | \n\n \n719<\/p>\n<\/td>\n | | \n\n \n(5.7<\/p>\n<\/td>\n | \n \n)%<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n1,279<\/p>\n<\/td>\n | | \n\n \n1,397<\/p>\n<\/td>\n | | \n\n \n(8.4<\/p>\n<\/td>\n | \n \n)%<\/p>\n<\/td>\n<\/tr>\n | \n| \n Discount<\/b><\/p>\n<\/td>\n | \n \n1,487<\/p>\n<\/td>\n | | \n\n \n889<\/p>\n<\/td>\n | | \n\n \n67.3<\/p>\n<\/td>\n | \n \n%<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n2,793<\/p>\n<\/td>\n | | \n\n \n1,437<\/p>\n<\/td>\n | | \n\n \n94.4<\/p>\n<\/td>\n | \n \n%<\/p>\n<\/td>\n<\/tr>\n | \n| \n Total domestic cigarettes 1<\/sup><\/b><\/p>\n<\/td>\n| \n 15,554<\/b><\/p>\n<\/td>\n | | \n\n 16,066<\/b><\/p>\n<\/td>\n | | \n\n (3.2<\/b><\/p>\n<\/td>\n | \n )%<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n 29,421<\/b><\/p>\n<\/td>\n | | \n\n 30,270<\/b><\/p>\n<\/td>\n | | \n\n (2.8<\/b><\/p>\n<\/td>\n | \n )%<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | | \n\n \n\u00a0<\/p>\n<\/td>\n | | \n\n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | | \n\n \n\u00a0<\/p>\n<\/td>\n | | \n\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n | \n| \n Cigars:<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | | \n\n \n\u00a0<\/p>\n<\/td>\n | | \n\n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | | \n\n \n\u00a0<\/p>\n<\/td>\n | | \n\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n | \n| \n Black & Mild<\/i><\/b><\/p>\n<\/td>\n | \n \n503<\/p>\n<\/td>\n | | \n\n \n478<\/p>\n<\/td>\n | | \n\n \n5.2<\/p>\n<\/td>\n | \n \n%<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n906<\/p>\n<\/td>\n | | \n\n \n883<\/p>\n<\/td>\n | | \n\n \n2.6<\/p>\n<\/td>\n | \n \n%<\/p>\n<\/td>\n<\/tr>\n | \n| \n Other<\/b><\/p>\n<\/td>\n | \n \n\u2014<\/p>\n<\/td>\n | | \n\n \n1<\/p>\n<\/td>\n | | \n\n \n(100<\/p>\n<\/td>\n | \n \n)%<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n1<\/p>\n<\/td>\n | | \n\n \n1<\/p>\n<\/td>\n | | \n\n \n\u2014<\/p>\n<\/td>\n | \n \n%<\/p>\n<\/td>\n<\/tr>\n | \n| \n Total cigars<\/b><\/p>\n<\/td>\n | \n 503<\/b><\/p>\n<\/td>\n | | \n\n 479<\/b><\/p>\n<\/td>\n | | \n\n 5.0<\/b><\/p>\n<\/td>\n | \n %<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n 907<\/b><\/p>\n<\/td>\n | | \n\n 884<\/b><\/p>\n<\/td>\n | | \n\n 2.6<\/b><\/p>\n<\/td>\n | \n %<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | | \n\n \n\u00a0<\/p>\n<\/td>\n | | \n\n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | | \n\n \n\u00a0<\/p>\n<\/td>\n | | \n\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n | \n| \n Total domestic smokeable products<\/b><\/p>\n<\/td>\n | \n 16,057<\/b><\/p>\n<\/td>\n | | \n\n 16,545<\/b><\/p>\n<\/td>\n | | \n\n (2.9<\/b><\/p>\n<\/td>\n | \n )%<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n 30,328<\/b><\/p>\n<\/td>\n | | \n\n 31,154<\/b><\/p>\n<\/td>\n | | \n\n (2.7<\/b><\/p>\n<\/td>\n | \n )%<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | | \n\n \n\u00a0<\/p>\n<\/td>\n | | \n\n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | | \n\n \n\u00a0<\/p>\n<\/td>\n | | \n\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n | \n| \n Contract manufactured export cigarettes 2<\/sup><\/b><\/p>\n<\/td>\n| \n 736<\/b><\/p>\n<\/td>\n | | \n\n 475<\/b><\/p>\n<\/td>\n | | \n\n 54.9<\/b><\/p>\n<\/td>\n | \n %<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n 1,346<\/b><\/p>\n<\/td>\n | | \n\n 475<\/b><\/p>\n<\/td>\n | | \n\n 100%+<\/b><\/p>\n<\/td>\n<\/tr>\n<\/table>\n 1<\/sup> Domestic cigarettes shipment volume includes Marlboro; Other premium brands, such as Virginia Slims and Parliament; and Discount brands, which include L&M and Basic. Domestic cigarettes volume includes units sold as well as promotional units sold for distribution in the U.S. and excludes units sold for distribution to Puerto Rico, U.S. Territories to overseas military and by Philip Morris Duty Free Inc., none of which, individually or in the aggregate, is material to our smokeable products segment.<\/i><\/p>\n2 <\/sup>Contract manufactured export cigarettes shipment volume represents contract manufactured cigarettes for third parties that market and sell tobacco products outside the U.S.<\/i><\/p>\nRetail Share and Brand Activity<\/b><\/p>\n Second Quarter<\/b><\/p>\n\n- Marlboro<\/i> retail share of the total cigarette category was 39.5%, a decrease of 1.5 share points versus the prior year and 0.2 share points sequentially. Marlboro<\/i> share of the premium segment was 59.6%, unchanged versus the prior year and an increase of 0.1 share point sequentially.\n<\/li>\n<\/ul>\n
\n- \nThe cigarette industry discount retail share was 33.8%, an increase of 2.6 share points versus the prior year and 0.5 share points sequentially, primarily due to continued discretionary income pressures on ANCs.<\/p>\n<\/li>\n<\/ul>\n
First Half<\/b><\/p>\n\n- Marlboro<\/i> retail share of the total cigarette category was 39.6%, a decrease of 1.4 share points. Marlboro<\/i> share of the premium segment was 59.6%, an increase of 0.1 share point.\n<\/li>\n<\/ul>\n
\n- \nThe cigarette industry discount retail share was 33.6%, an increase of 2.6 share points, primarily due to continued discretionary income pressures on ANCs.<\/p>\n<\/li>\n<\/ul>\n
\n\n| \n Table 4 – Smokeable Products: Domestic Cigarettes Retail Share (percent)<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n | \n| \n \n\u00a0<\/p>\n<\/td>\n | \n Second Quarter<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n Six Months Ended June 30,<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \n\u00a0<\/p>\n<\/td>\n | \n 2026<\/b><\/p>\n<\/td>\n | \n 2025<\/b><\/p>\n<\/td>\n | \n Percentage
\n
point
\n
change<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n 2026<\/b><\/p>\n<\/td>\n | \n 2025<\/b><\/p>\n<\/td>\n | \n Percentage
\n
point
\n
change<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n Cigarettes:<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n | \n| \n Marlboro<\/i><\/b><\/p>\n<\/td>\n | \n \n39.5%<\/p>\n<\/td>\n | \n \n41.0%<\/p>\n<\/td>\n | \n \n(1.5)<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n39.6%<\/p>\n<\/td>\n | \n \n41.0%<\/p>\n<\/td>\n | \n \n(1.4)<\/p>\n<\/td>\n<\/tr>\n | \n| \n Other premium<\/b><\/p>\n<\/td>\n | \n \n2.1<\/p>\n<\/td>\n | \n \n2.2<\/p>\n<\/td>\n | \n \n(0.1)<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n2.1<\/p>\n<\/td>\n | \n \n2.2<\/p>\n<\/td>\n | \n \n(0.1)<\/p>\n<\/td>\n<\/tr>\n | \n| \n Discount<\/b><\/p>\n<\/td>\n | \n \n3.9<\/p>\n<\/td>\n | \n \n2.0<\/p>\n<\/td>\n | \n \n1.9<\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n \n3.8<\/p>\n<\/td>\n | \n \n1.9<\/p>\n<\/td>\n | \n \n1.9<\/p>\n<\/td>\n<\/tr>\n | \n| \n Total cigarettes<\/b><\/p>\n<\/td>\n | \n 45.5%<\/b><\/p>\n<\/td>\n | \n 45.2%<\/b><\/p>\n<\/td>\n | \n 0.3<\/b><\/p>\n<\/td>\n | \n \n\u00a0<\/p>\n<\/td>\n | \n 45.5%<\/b><\/p>\n<\/td>\n | \n 45.1%<\/b><\/p>\n<\/td>\n | \n 0.4<\/b><\/p>\n<\/td>\n<\/tr>\n<\/table>\n Note: Retail share results for cigarettes are based on data from Circana, LLC (Circana) as well as MSAi. Circana maintains a blended retail service that uses a sample of stores and certain wholesale shipments to project market share and depict share trends. This service tracks sales in the food, drug, mass merchandisers, convenience, military, dollar store and club trade classes. For other trade classes selling cigarettes, retail share is based on shipments from wholesalers to retailers through the Store Tracking Analytical Reporting System (STARS), as provided by MSAi. This service is not designed to capture sales through other channels, including the internet, direct mail and some tax-advantaged outlets. It is the standard practice of retail services to periodically refresh their retail scan services, which could restate retail share results that were previously released in these services.<\/i><\/p>\n ORAL TOBACCO PRODUCTS<\/b><\/p>\n Revenues and OCI<\/b><\/p>\n Second Quarter<\/b><\/p>\n\n- \nNet revenues decreased 5.3%, primarily driven by lower shipment volume and higher promotional investments, partially offset by higher pricing. Revenues net of excise taxes decreased 5.2%.<\/p>\n<\/li>\n<\/ul>\n
\n- \nReported OCI decreased 23.5%, primarily driven by 2026 costs related to the USSTC Facilities Consolidation, lower shipment volume and higher promotional investments, partially offset by higher pricing.<\/p>\n<\/li>\n<\/ul>\n
\n- \nAdjusted OCI decreased 8.0%, primarily driven by lower shipment volume and higher promotional investments, partially offset by higher pricing. Adjusted OCI margins decreased 2.0 percentage points to 66.7%.<\/p>\n<\/li>\n<\/ul>\n
First Half<\/b><\/p>\n\n- \nNet revenues decreased 1.8%, primarily driven by lower shipment volume and higher promotional investments, partially offset by higher pricing. Revenues net of excise taxes decreased 1.5%.<\/p>\n<\/li>\n<\/ul>\n
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