Altria Group, Inc. operates within the U.S. tobacco industry, holding a leading portfolio of tobacco products for U.S. tobacco consumers age 21+. The company is executing a strategy it calls Moving Beyond Smoking, by responsibly transitioning adult smokers to a smoke-free future, competing for existing smoke-free adult nicotine consumers, and exploring new growth opportunities beyond the United States and beyond nicotine. The industry faces significant headwinds including pending and threatened litigation, FDA regulatory actions and inaction, illicit trade in nicotine products, actual and proposed excise tax increases, bans on tobacco use, and reductions in consumption levels of cigarettes and MST products. The company operates primarily within the United States and generates substantially all of its revenue from domestic customers.

Altria's wholly owned subsidiaries include Philip Morris USA Inc., the largest cigarette company in the United States, and U.S. Smokeless Tobacco Company LLC, the leading producer and marketer of MST products. The company's principal cigarette brand, Marlboro, has been the largest-selling cigarette brand in the United States for over 50 years. The market for tobacco products is highly competitive, characterized by brand recognition and loyalty, with competition based on product quality, taste, price, product innovation, marketing, packaging, distribution and promotional activities. PM USA faces competition from lower-priced brands sold by certain domestic and foreign manufacturers that have cost advantages because they are not parties to settlements of certain healthcare cost recovery litigation and are not required to make annual settlement payments. The company's retail share for total cigarettes was 45.2% ¹ in 2025, down from 45.9% ² in 2024.

Altria generates revenue through the manufacture and sale of smokeable tobacco products (cigarettes and machine-made large cigars), oral tobacco products (MST and oral nicotine pouches), and e-vapor products. The company operates primarily within the United States and generates substantially all of its revenue from domestic customers. Revenue is recognized when control of product is obtained by the customer, which primarily occurs upon shipment. Net revenues are defined as revenues, which include excise taxes and shipping and handling charges billed to customers, net of cash discounts for prompt payment, sales returns and sales incentives. The company's tobacco subsidiaries sell their tobacco products principally to wholesalers (including distributors) and large retail organizations, including chain stores.

The smokeable products segment includes cigarettes manufactured and sold by PM USA and machine-made large cigars manufactured and sold by Middleton. Total smokeable products segment's cigarettes shipment volume in the United States was 61.8 billion units ³ in 2025, a decrease of 10.0% ⁴ from 2024. Total smokeable products segment's cigars shipment volume was approximately 1.8 billion units ⁵ in 2025, an increase of 1.8% ⁶ from 2024. The oral tobacco products segment includes MST products sold by USSTC under premium brands Copenhagen and Skoal, and a value brand Red Seal, as well as on! oral nicotine pouches sold by Helix. Total oral tobacco products segment's shipment volume was 732.4 million units ⁷ in 2025, a decrease of 5.5% ⁸ from 2024. The e-vapor products segment includes products manufactured and sold by NJOY, whose product portfolio of tobacco and menthol e-vapor products is covered by marketing granted orders from the FDA. NJOY ACE, the principal e-vapor product of NJOY, is subject to an exclusion order and cease-and-desist orders issued by the ITC prohibiting the importation and sale of NJOY ACE in the United States.

In October 2024, Altria announced a multi-phase Optimize & Accelerate initiative designed to enhance organizational speed, efficiency and effectiveness. The initiative includes centralizing work, outsourcing certain transactional activities and streamlining, automating and standardizing processes across the enterprise. In 2025, the company began modernizing its ways of working and continues to expect to deliver cumulative savings of at least $600 million ⁹ by the end of 2029. The company recorded pre-tax exit and implementation costs of $56 million ¹⁰ and $68 million ¹¹ related to the initiative for the years ended December 31, 2025 and 2024, respectively. In January 2025, the Board authorized a $1.0 billion ¹² share repurchase program, and in October 2025, the Board authorized a $1.0 billion ¹³ expansion of this program to $2.0 billion ¹⁴. During 2025, the company issued U.S. dollar denominated senior unsecured notes each in the aggregate principal amount of $1.0 billion ¹⁵ ($2.0 billion ¹⁶ total) and repaid in full at maturity senior unsecured notes in the aggregate principal amount of $750 million ¹⁷ and senior unsecured Euro notes in the aggregate principal amount of €750 million ($857 million ¹⁸).

For the year ended December 31, 2025, net revenues were $23.279 billion ¹⁹, a decrease of $739 million (3.1%) ²⁰ from $24.018 billion ²¹ in 2024. Reported net earnings were $6.947 billion ²², a decrease of $4.317 billion (38.3%) ²³ from $11.264 billion ²⁴ in 2024, due primarily to the gain on the sale of the IQOS System commercialization rights in 2024 and lower operating income. Reported diluted EPS was $4.12 ²⁵, a decrease of 37.0% ²⁶ from $6.54 ²⁷ in 2024. Adjusted net earnings were $9.148 billion ²⁸, an increase of $212 million (2.4%) ²⁹ from $8.936 billion ³⁰ in 2024. Adjusted diluted EPS was $5.42 ³¹, an increase of 4.4% ³² from $5.19 ³³ in 2024. Net cash provided by operating activities was $9.3 billion ³⁴ compared with $8.8 billion ³⁵ during 2024.

Altria has established 2028 Enterprise Goals which include delivering a mid-single digits adjusted diluted EPS compounded annual growth rate in 2028 from a $4.87 ³⁶ base in 2022. The company's calculation of progress towards this goal through 2025 shows a CAGR of 3.6% ³⁷. The company also has a progressive dividend goal targeting mid-single digits dividend per share growth annually through 2028. Altria targets a debt-to-Consolidated EBITDA ratio of approximately 2.0x ³⁸ and aims to maintain a total adjusted OCI margin of at least 60% ³⁹ in each year through 2028. The company expects capital expenditures for 2026 to be in the range of $300 million ⁴⁰ to $375 million ⁴¹.

Altria's growth strategy involves innovative products that may have reduced health risks relative to certain other nicotine products, including e-vapor, heated tobacco and oral nicotine pouch products. In the first quarter of 2026, the company commercialized on! PLUS oral nicotine pouch products, and has plans to commercialize additional on! and NJOY products. The company has a joint venture, Horizon, with JTIUH for the U.S. marketing and commercialization of heated tobacco stick products. Upon FDA authorization of Ploom HTS products, JTIUH will supply Ploom HTS devices and PM USA will manufacture Marlboro HTS consumables for U.S. commercialization. As of February 25, 2026, there are no products in the U.S. marketplace from the joint venture. The company also has a goal to compete internationally in the top innovative oral tobacco markets and develop a pathway to participate in heated tobacco and e-vapor markets, and to enter non-nicotine categories with broad commercial distribution of at least five products by 2028.

The company continues to expect to deliver cumulative savings of at least $600 million ⁴² by the end of 2029 from its Optimize & Accelerate initiative, and plans to reinvest these savings in its businesses in support of its Vision and 2028 Goals. These cumulative cost savings exclude estimated pre-tax charges for the initiative of approximately $175 million ⁴³, updated from a prior estimate of approximately $125 million ⁴⁴. The company expects to record the majority of the remaining charges by the end of 2027. The company anticipates net pre-tax pension and postretirement expense of approximately $48 million ⁴⁵ in 2026 versus net pre-tax income of $11 million ⁴⁶ in 2025.

The company expects capital expenditures for 2026 to be in the range of $300 million ⁴⁷ to $375 million ⁴⁸, which are expected to be funded from operating cash flows. Capital expenditures for 2025 increased 52.1% ⁴⁹ to $216 million ⁵⁰, primarily due to investments in manufacturing capabilities and innovative products. The company has a progressive dividend goal targeting mid-single digits dividend per share growth annually through 2028. In the third quarter of 2025, the Board approved a 3.9% ⁵¹ increase in the quarterly dividend rate to $1.06 ⁵² per share versus the previous rate of $1.02 ⁵³ per share. The current annualized dividend rate is $4.24 ⁵⁴ per share. In October 2025, the Board authorized a $1.0 billion ⁵⁵ expansion of the existing share repurchase program from $1.0 billion ⁵⁶ to $2.0 billion ⁵⁷, which expires on December 31, 2026.

Altria faces significant headwinds including persistent inflationary pressures on U.S. adult nicotine consumers, with lower-income consumers particularly affected. For the fourth quarter of 2025, the discount retail share of the cigarette category reached 32.9% ⁵⁸, an increase of 2.6 share points ⁵⁹ versus the fourth quarter of 2024 and 0.7 share points ⁶⁰ sequentially. The U.S. nicotine pouch category grew to 56.9% ⁶¹ of the U.S. oral tobacco category, an increase of 10.4 share points ⁶² versus the fourth quarter of 2024. The company estimates that cross-category movement, primarily driven by illicit flavored disposable e-vapor products, contributed approximately 2% to 3% ⁶³ to the cigarette industry volume decline during 2025 versus a prior estimate of approximately 3% to 4% ⁶⁴. The company expects that effective enforcement against illicit flavored disposable e-vapor products will occur more gradually than initially anticipated.

Management's message emphasizes the company's Vision of Moving Beyond Smoking by responsibly transitioning adult smokers to a smoke-free future, competing vigorously for existing smoke-free adult nicotine consumers, and exploring new growth opportunities beyond the United States and beyond nicotine. The company has established 2028 Enterprise Goals which include delivering a mid-single digits adjusted diluted EPS compounded annual growth rate in 2028 from a $4.87 ⁷¹ base in 2022, with progress through 2025 showing a CAGR of 3.6% ⁷². Management also emphasizes a progressive dividend goal targeting mid-single digits dividend per share growth annually through 2028, a target debt-to-Consolidated EBITDA ratio of approximately 2.0x ⁷³, and maintaining a total adjusted OCI margin of at least 60% ⁷⁴ in each year through 2028. The company is executing a multi-phase Optimize & Accelerate initiative designed to modernize ways of working, with cumulative savings of at least $600 million ⁷⁵ expected by the end of 2029.

For the year ended December 31, 2025, total net revenues were $23.279 billion ⁷⁶, compared to $24.018 billion ⁷⁷ in 2024. Net earnings were $6.947 billion ⁷⁸, compared to $11.264 billion ⁷⁹ in 2024. Diluted EPS was $4.12 ⁸⁰, compared to $6.54 ⁸¹ in 2024. Operating income was $9.899 billion ⁸², compared to $11.241 billion ⁸³ in 2024. The company reported adjusted net earnings of $9.148 billion ⁸⁴ and adjusted diluted EPS of $5.42 ⁸⁵ for 2025, compared to adjusted net earnings of $8.936 billion ⁸⁶ and adjusted diluted EPS of $5.19 ⁸⁷ for 2024. Net cash provided by operating activities was $9.3 billion ⁸⁸ in 2025, compared to $8.8 billion ⁸⁹ in 2024. Total long-term debt at December 31, 2025 was $25.709 billion ⁹⁰, compared to $24.926 billion ⁹¹ at December 31, 2024. Significant one-time items in 2025 included non-cash impairments of the e-vapor reporting unit goodwill of $1.158 billion ⁹² and definite-lived intangible assets of $970 million ⁹³, and pre-tax exit and implementation costs of $56 million ⁹⁴. In 2024, significant items included a pre-tax gain of $2.7 billion ⁹⁵ on the sale of the IQOS System commercialization rights and a non-cash, pre-tax impairment of the Skoal trademark of $354 million ⁹⁶. The smokeable products segment reported OCI of $10.984 billion ⁹⁷ in 2025, compared to $10.821 billion ⁹⁸ in 2024. The oral tobacco products segment reported OCI of $1.828 billion ⁹⁹ in 2025, compared to $1.449 billion ¹⁰⁰ in 2024. The e-vapor products segment reported OCI of $(2.297) billion ¹⁰¹ in 2025, compared to $(171) million ¹⁰² in 2024.

Altria faces material risks from the proliferation of illicit flavored disposable e-vapor products, which the company estimates represent approximately 70% ⁶⁵ of the e-vapor category and have negatively impacted the growth of FDA-authorized e-vapor products including NJOY's products. The company recorded non-cash impairments of e-vapor reporting unit goodwill of $1.158 billion ⁶⁶ and definite-lived intangible assets of $970 million ⁶⁷ in 2025 due to expectations that effective enforcement against illicit products will occur more gradually than anticipated. The company also faces significant litigation risk, including patent infringement lawsuits that resulted in ITC exclusion and cease-and-desist orders prohibiting the importation and sale of NJOY ACE in the United States. PM USA's obligations under the State Settlement Agreements resulted in charges to cost of sales of approximately $3.0 billion ⁶⁸ in 2025. The company faces risks from FDA regulatory actions, including potential product standards that could establish a maximum nicotine level in cigarettes and other combustible tobacco products, and proposed bans on menthol in cigarettes and characterizing flavors in cigars. Additionally, the company's investment in ABI, with a carrying value of $8.303 billion ⁶⁹ at December 31, 2025, is subject to foreign currency exchange risk, and the fair value of this investment exceeded its carrying value by approximately 24% ⁷⁰ at that date.