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ALTRIA GROUP, INC.

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Business Summary

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% in 2025, down from 45.9% 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 in 2025, a decrease of 10.0% from 2024. Total smokeable products segment's cigars shipment volume was approximately 1.8 billion units in 2025, an increase of 1.8% 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 in 2025, a decrease of 5.5% 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 by the end of 2029. The company recorded pre-tax exit and implementation costs of $56 million and $68 million related to the initiative for the years ended December 31, 2025 and 2024, respectively. In January 2025, the Board authorized a $1.0 billion share repurchase program, and in October 2025, the Board authorized a $1.0 billion expansion of this program to $2.0 billion . During 2025, the company issued U.S. dollar denominated senior unsecured notes each in the aggregate principal amount of $1.0 billion ($2.0 billion total) and repaid in full at maturity senior unsecured notes in the aggregate principal amount of $750 million and senior unsecured Euro notes in the aggregate principal amount of €750 million ($857 million ).

For the year ended December 31, 2025, net revenues were $23.279 billion , a decrease of $739 million (3.1%) from $24.018 billion in 2024. Reported net earnings were $6.947 billion , a decrease of $4.317 billion (38.3%) from $11.264 billion 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 , a decrease of 37.0% from $6.54 in 2024. Adjusted net earnings were $9.148 billion , an increase of $212 million (2.4%) from $8.936 billion in 2024. Adjusted diluted EPS was $5.42 , an increase of 4.4% from $5.19 in 2024. Net cash provided by operating activities was $9.3 billion compared with $8.8 billion during 2024.

Business Outlook

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 base in 2022. The company's calculation of progress towards this goal through 2025 shows a CAGR of 3.6% . 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 and aims to maintain a total adjusted OCI margin of at least 60% in each year through 2028. The company expects capital expenditures for 2026 to be in the range of $300 million to $375 million .

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 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 , updated from a prior estimate of approximately $125 million . 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 in 2026 versus net pre-tax income of $11 million in 2025.

The company expects capital expenditures for 2026 to be in the range of $300 million to $375 million , which are expected to be funded from operating cash flows. Capital expenditures for 2025 increased 52.1% to $216 million , 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% increase in the quarterly dividend rate to $1.06 per share versus the previous rate of $1.02 per share. The current annualized dividend rate is $4.24 per share. In October 2025, the Board authorized a $1.0 billion expansion of the existing share repurchase program from $1.0 billion to $2.0 billion , 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% , an increase of 2.6 share points versus the fourth quarter of 2024 and 0.7 share points sequentially. The U.S. nicotine pouch category grew to 56.9% of the U.S. oral tobacco category, an increase of 10.4 share points 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% to the cigarette industry volume decline during 2025 versus a prior estimate of approximately 3% to 4% . The company expects that effective enforcement against illicit flavored disposable e-vapor products will occur more gradually than initially anticipated.

Risk Factors

Altria faces material risks from the proliferation of illicit flavored disposable e-vapor products, which the company estimates represent approximately 70% 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 and definite-lived intangible assets of $970 million 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 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 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% at that date.

Management Priorities

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 base in 2022, with progress through 2025 showing a CAGR of 3.6% . 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 , and maintaining a total adjusted OCI margin of at least 60% 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 expected by the end of 2029.

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 7, MD&A — Operating Results by Business Segment, Smokeable Products Segment
  2. [2] Item 7, MD&A — Operating Results by Business Segment, Smokeable Products Segment
  3. [3] Item 1, Business — Description of Business
  4. [4] Item 1, Business — Description of Business
  5. [5] Item 1, Business — Description of Business
  6. [6] Item 1, Business — Description of Business
  7. [7] Item 1, Business — Description of Business
  8. [8] Item 1, Business — Description of Business
  9. [9] Item 7, MD&A — Executive Summary, Optimize & Accelerate Initiative
  10. [10] Item 8, Note 5 — Exit and Implementation Costs
  11. [11] Item 8, Note 5 — Exit and Implementation Costs
  12. [12] Item 5, Market for Registrant's Common Equity — Issuer Purchases of Equity Securities
  13. [13] Item 5, Market for Registrant's Common Equity — Issuer Purchases of Equity Securities
  14. [14] Item 5, Market for Registrant's Common Equity — Issuer Purchases of Equity Securities
  15. [15] Item 7, MD&A — Liquidity and Capital Resources, Long-Term Debt
  16. [16] Item 7, MD&A — Liquidity and Capital Resources, Long-Term Debt
  17. [17] Item 7, MD&A — Liquidity and Capital Resources, Long-Term Debt
  18. [18] Item 7, MD&A — Liquidity and Capital Resources, Long-Term Debt
  19. [19] Item 8, Consolidated Statements of Earnings
  20. [20] Item 7, MD&A — Consolidated Operating Results
  21. [21] Item 8, Consolidated Statements of Earnings
  22. [22] Item 8, Consolidated Statements of Earnings
  23. [23] Item 7, MD&A — Consolidated Results of Operations
  24. [24] Item 8, Consolidated Statements of Earnings
  25. [25] Item 8, Consolidated Statements of Earnings
  26. [26] Item 7, MD&A — Consolidated Results of Operations
  27. [27] Item 8, Consolidated Statements of Earnings
  28. [28] Item 7, MD&A — Consolidated Results of Operations
  29. [29] Item 7, MD&A — Consolidated Results of Operations
  30. [30] Item 7, MD&A — Consolidated Results of Operations
  31. [31] Item 7, MD&A — Consolidated Results of Operations
  32. [32] Item 7, MD&A — Consolidated Results of Operations
  33. [33] Item 7, MD&A — Consolidated Results of Operations
  34. [34] Item 8, Consolidated Statements of Cash Flows
  35. [35] Item 8, Consolidated Statements of Cash Flows
  36. [36] Item 7, MD&A — Executive Summary, Vision and 2028 Goals
  37. [37] Item 7, MD&A — Consolidated Results of Operations, Compounded EPS Growth Rate
  38. [38] Item 7, MD&A — Executive Summary, Vision and 2028 Goals
  39. [39] Item 7, MD&A — Executive Summary, Vision and 2028 Goals
  40. [40] Item 7, MD&A — Financial Review, Cash Provided by/Used in Investing Activities
  41. [41] Item 7, MD&A — Financial Review, Cash Provided by/Used in Investing Activities
  42. [42] Item 7, MD&A — Executive Summary, Optimize & Accelerate Initiative
  43. [43] Item 8, Note 5 — Exit and Implementation Costs
  44. [44] Item 8, Note 5 — Exit and Implementation Costs
  45. [45] Item 7, MD&A — Critical Accounting Estimates, Employee Benefit Plans
  46. [46] Item 7, MD&A — Critical Accounting Estimates, Employee Benefit Plans
  47. [47] Item 7, MD&A — Financial Review, Cash Provided by/Used in Investing Activities
  48. [48] Item 7, MD&A — Financial Review, Cash Provided by/Used in Investing Activities
  49. [49] Item 7, MD&A — Financial Review, Cash Provided by/Used in Investing Activities
  50. [50] Item 8, Consolidated Statements of Cash Flows
  51. [51] Item 7, MD&A — Liquidity and Capital Resources, Equity and Dividends
  52. [52] Item 7, MD&A — Liquidity and Capital Resources, Equity and Dividends
  53. [53] Item 7, MD&A — Liquidity and Capital Resources, Equity and Dividends
  54. [54] Item 7, MD&A — Liquidity and Capital Resources, Equity and Dividends
  55. [55] Item 7, MD&A — Liquidity and Capital Resources, Equity and Dividends
  56. [56] Item 7, MD&A — Liquidity and Capital Resources, Equity and Dividends
  57. [57] Item 7, MD&A — Liquidity and Capital Resources, Equity and Dividends
  58. [58] Item 7, MD&A — Trends and Developments
  59. [59] Item 7, MD&A — Trends and Developments
  60. [60] Item 7, MD&A — Trends and Developments
  61. [61] Item 7, MD&A — Trends and Developments
  62. [62] Item 7, MD&A — Trends and Developments
  63. [63] Item 7, MD&A — Trends and Developments
  64. [64] Item 7, MD&A — Trends and Developments
  65. [65] Item 7, MD&A — Trends and Developments
  66. [66] Item 8, Note 4 — Goodwill and Other Intangible Assets, net
  67. [67] Item 8, Note 4 — Goodwill and Other Intangible Assets, net
  68. [68] Item 7, MD&A — Critical Accounting Estimates, Contingencies
  69. [69] Item 8, Note 6 — Investments in Equity Securities
  70. [70] Item 8, Note 6 — Investments in Equity Securities
  71. [71] Item 7, MD&A — Consolidated Results of Operations, Compounded EPS Growth Rate
  72. [72] Item 7, MD&A — Consolidated Results of Operations, Compounded EPS Growth Rate
  73. [73] Item 7, MD&A — Executive Summary, Vision and 2028 Goals
  74. [74] Item 7, MD&A — Executive Summary, Vision and 2028 Goals
  75. [75] Item 7, MD&A — Executive Summary, Optimize & Accelerate Initiative
  76. [76] Item 8, Consolidated Statements of Earnings
  77. [77] Item 8, Consolidated Statements of Earnings
  78. [78] Item 8, Consolidated Statements of Earnings
  79. [79] Item 8, Consolidated Statements of Earnings
  80. [80] Item 8, Consolidated Statements of Earnings
  81. [81] Item 8, Consolidated Statements of Earnings
  82. [82] Item 8, Consolidated Statements of Earnings
  83. [83] Item 8, Consolidated Statements of Earnings
  84. [84] Item 7, MD&A — Consolidated Results of Operations
  85. [85] Item 7, MD&A — Consolidated Results of Operations
  86. [86] Item 7, MD&A — Consolidated Results of Operations
  87. [87] Item 7, MD&A — Consolidated Results of Operations
  88. [88] Item 8, Consolidated Statements of Cash Flows
  89. [89] Item 8, Consolidated Statements of Cash Flows
  90. [90] Item 8, Note 9 — Long-Term Debt
  91. [91] Item 8, Note 9 — Long-Term Debt
  92. [92] Item 8, Note 4 — Goodwill and Other Intangible Assets, net
  93. [93] Item 8, Note 4 — Goodwill and Other Intangible Assets, net
  94. [94] Item 8, Note 5 — Exit and Implementation Costs
  95. [95] Item 8, Note 4 — Goodwill and Other Intangible Assets, net
  96. [96] Item 8, Note 4 — Goodwill and Other Intangible Assets, net
  97. [97] Item 7, MD&A — Operating Results by Business Segment, Smokeable Products Segment
  98. [98] Item 7, MD&A — Operating Results by Business Segment, Smokeable Products Segment
  99. [99] Item 7, MD&A — Operating Results by Business Segment, Oral Tobacco Products Segment
  100. [100] Item 7, MD&A — Operating Results by Business Segment, Oral Tobacco Products Segment
  101. [101] Item 7, MD&A — Operating Results by Business Segment, E-Vapor Products Segment
  102. [102] Item 7, MD&A — Operating Results by Business Segment, E-Vapor Products Segment

Analysis on 6/21/2026