The company is reassessing its U.S. smoke-free goals due to the continued proliferation of illicit flavored disposable e-vapor products resulting from insufficient enforcement action against manufacturers, distributors and retailers of these products. Updated goals are anticipated when there is more clarity on how the legitimate e-vapor market may evolve.

In October 2024, the company announced a multi-phase Initiative designed to modernize its ways of working as it works towards achieving its Vision and 2028 Goals. The Initiative is expected to increase the organization's speed, efficiency and effectiveness by centralizing work, outsourcing certain transactional tasks and streamlining, automating and standardizing processes.

In April 2024, the company assigned the U.S. commercialization rights to the IQOS Tobacco Heating System to Philip Morris International Inc. for a pre-tax gain of $2.7 billion. This will allow Altria to focus on its smoke-free product portfolio.

The initial phases of the Optimize & Accelerate initiative are expected to deliver at least $600 million in cumulative cost savings over the next five years. These savings are planned to be reinvested in the businesses in support of the company's Vision and 2028 Goals.

The company has increased engagement with the FDA and other government agencies to encourage enforcement action against illicit e-vapor products, but such enforcement has been inadequate to date. The company has also taken legal action to protect its lawful e-vapor business, which exposes it to additional costs and expenses.

The company has implemented an extensive cybersecurity risk management framework designed to identify, assess, mitigate and prevent potential cybersecurity risks and to align with industry best practices and all applicable regulatory requirements. The framework is integrated into the broad enterprise risk management processes.

The company may be unsuccessful in anticipating and responding to changes in adult tobacco consumer preferences and purchase behavior, including as a result of difficult economic conditions, which could have a material adverse effect on the business, results of operations, cash flows or financial position.

The company faces significant competition, and its failure to compete effectively could have a material adverse effect on the business, results of operations, cash flows or financial position and ability to achieve its Vision.

The company may be unsuccessful in commercializing innovative products, including tobacco products with reduced health risks relative to certain other tobacco products and that appeal to adult tobacco consumers, which may have a material adverse effect on the business, results of operations, cash flows or financial position and ability to achieve its Vision.

PM USA faces competition from lower-priced brands sold by certain United States and foreign manufacturers that have cost advantages because they are not parties to settlements of certain healthcare cost recovery litigation in the United States and, as such, are not required to make annual settlement payments as required by the parties to the settlements.

The company faces competition from illicit trade in tobacco products, including e-vapor products, which could have a material adverse effect on the business, results of operations, cash flows or financial position.

Marlboro share of the total cigarette category was 41.3%, a decrease of 1.0 share point versus the prior year and 0.3 share points in the fourth quarter. For the fourth quarter 2024, the traditional smokeless category (including MST) share of the total oral tobacco category declined to 54.3%, down 9.6 share points versus the fourth quarter of 2023.

As part of our multi-phase Optimize & Accelerate initiative (“Initiative”), we plan to increase our organization's speed, efficiency and effectiveness by centralizing work, outsourcing certain transactional tasks and streamlining, automating and standardizing processes.

Our Occupational Safety and Health Administration recordable injury rate for 2024 was 1.8% (versus 1.2% for 2023) and remains below the benchmark for companies in the U.S. Beverage and Tobacco Product Manufacturing industry classification.

Our operating companies rely on a few significant facilities and a small number of key suppliers, distributors and distribution chain service providers, and an extended disruption at a facility or in service by a supplier, distributor or distribution chain service provider could have a material adverse effect on our business, results of operations, cash flows or financial position.

We have growth strategies involving innovative products that may have reduced health risks relative to certain other tobacco products, while continuing to offer adult tobacco consumers (within and outside the United States) products that meet their taste expectations and evolving preferences.

As a result of our June 2023 acquisition of NJOY Holdings, we gained full global ownership of NJOY's e-vapor product portfolio, including NJOY ACE, a pod-based e-vapor product with an MGO from the FDA, and NJOY DAILY, which also has an MGO.

Lengthy and unpredictable regulatory review periods complicate efforts to strategize and plan with respect to commercialization of new products, and we cannot predict or influence the speed with which the FDA reviews PMTAs.

In January 2025, our Board authorized a new $1.0 billion share repurchase program, which we expect to complete by December 31, 2025. The timing of share repurchases under this program depends upon marketplace conditions and other factors, and the program remains subject to the discretion of our Board.

In March 2024, we sold a portion of our investment in ABI (“ABI Transaction”). We used the proceeds from the sale to fund the repurchase of our common stock through accelerated share repurchase (“ASR”) transactions.

Capital expenditures for 2024 decreased 27.6% to $142 million. We expect capital expenditures for 2025 to be in the range of $175 million to $225 million, which are expected to be funded from operating cash flows.

We support efforts to address human capital concerns in the tobacco supply chain. For example, in our domestic tobacco supply chain, in 2024, all of our domestic tobacco growers participated in the Good Agricultural Practices Certification Program to assess growers' compliance with practices related to labor management and all of our tobacco suppliers participated in the tobacco industry's Sustainable Tobacco Program, which includes standards related to human and labor rights.

"Supporting our People and our Communities" is one of our Responsibility Focus Areas, which includes two goals related to developing a high-performing and diverse talent pipeline: (i) enhance the diversity of our organization and leadership teams while building an inclusive and equitable culture; and (ii) build employee capability and well-being to succeed in uncertain and rapidly changing environments.

We are committed to pay equity across our companies. Based on the most recent annual analysis we conducted in 2024, for employees performing the same or similar duties regardless of any differentiating factors, such as performance and tenure, salaries of our female employees were 98.2% of those of our male employees, and salaries of our employees of color were 98.2% of those of our white employees.

U.S. adult tobacco consumers remained under pressure throughout 2024 largely due to the compounding effects of high prices exceeding overall wage growth and historically high levels of consumer credit and credit card delinquency rates.

For the 12 months ended December 31, 2024, we estimate the e-vapor category grew approximately 30% versus the prior 12-month period, driven by the growth of illicit flavored disposable e-vapor products. We estimate that illicit products now represent more than 60% of the e-vapor category.

Tobacco companies are subject to broad and evolving regulatory and legislative frameworks that could have a material impact on our businesses. For example, the FDA submitted proposed product standards banning menthol in cigarettes, which was delayed indefinitely in April 2024, and banning all characterizing flavors in cigars, both of which were withdrawn in January 2025.