At June 30, 2026 and December 31, 2025, PMI had total equity method investments of $1,008 million and $1,019 million, respectively. Equity method investments are initially recorded at cost. Under the equity method of accounting, the investment is adjusted for PMI's proportionate share of earnings or losses, dividends, capital contributions, changes in ownership interests and movements in currency translation adjustments. The carrying value of our equity method investments at June 30, 2026 and December 31, 2025, exceeded our share of the investees' book value by $1,023 million and $1,033 million, respectively. The difference between the investment carrying value and the amount of underlying equity in net assets is mainly attributable to equity method goodwill, convertible debt instruments, and definite-lived intangible assets and other assets. The difference related to the definite-lived intangibles and other assets at June 30, 2026 and December 31, 2025 of $161 million in both periods, is amortized on a straight-line basis and is included in Equity investments and securities (income)/loss, net on the condensed consolidated statements of earnings. At June 30, 2026 and December 31, 2025, PMI received year-to-date dividends from equity method investees of $17 million and $203 million, respectively.

PMI holds a 23% equity interest in JSC TK Megapolis ("TKM"), PMI's distributor in Russia, which as of June 30, 2026 had a book value of $0.8 billion, including related cumulative foreign currency translation losses of $0.5 billion reflected in accumulated other comprehensive losses in stockholders’ equity. There are risks related to this investment as the fair value of these assets with their associated rights is difficult to predict due to the current economic, political, regulatory, legal and social conditions as well as the foreign currency volatility.

PMI holds an indirect economic interest of approximately 25% in Société des Tabacs Algéro-Emiratie (“STAEM”), an Algerian joint venture with the Algerian state-owned enterprise Management et Développement des Actifs et des Ressources Holding ("MADAR Holding"). STAEM manufactures and distributes under license some of PMI’s brands. As of June 30, 2026, the book value of PMI’s investment in STAEM was $0.7 billion, including related cumulative foreign currency translation losses of $0.3 billion reflected in accumulated other comprehensive losses in stockholders’ equity. PMI monitors general economic, political, regulatory, and other market factors for potential unfavorable developments which could impact the value of the investment.

PMI holds an indirect economic interest of 14.7% in Eastern Company (“Eastern"), Egypt’s largest cigarette manufacturer which also includes cigars and pipe tobacco, among others, in its portfolio. PMI accounts for its investment in Eastern under the equity method of accounting as it has the indirect ability to participate in Eastern's policy making processes. In relation to its investment in Eastern, PMI also guarantees certain credit facilities and repayment of certain bank loan liabilities. The maximum amount of these guarantee obligations is $385 million and they will be in effect until 2034.

The initial investments in TKM, STAEM, Eastern and Wellness business related investments have been recorded at cost and are included in equity investments on the condensed consolidated balance sheets. Transactions between these equity method investees and PMI subsidiaries are considered to be related-party transactions and are included in the tables below.

On March 22, 2019, PMI deconsolidated its wholly owned subsidiary in Canada, Rothmans, Benson & Hedges Inc. (“RBH”) following an initial order from the Ontario Superior Court of Justice granting it protection under the Companies’ Creditors Arrangement Act ("CCAA"), which is a Canadian federal law that permits a Canadian business to restructure its affairs while carrying on its business in the ordinary course with minimal disruption to its customers, suppliers and employees.

On March 6, 2025, the CCAA court issued a decision approving the plan of compromise and arrangement (the "Plan") setting forth certain terms of a proposed comprehensive resolution of Canadian tobacco claims and related litigation, including the global settlement amount. The Plan became effective on August 29, 2025. PMI evaluated the terms of the Plan and concluded that powers provided under the Plan to RBH’s CCAA Plan Administrator and to the Claimants (as these terms are defined in the Plan) continue to remove certain elements of control of the business from PMI and RBH. As a result, PMI has determined that RBH will remain deconsolidated as it does not have a controlling financial interest over RBH as defined in ASC 810 (Consolidation). PMI will continue to account for its investment in RBH in accordance with ASC 321 (Investments-Equity Securities) as an equity security, without readily determinable fair value, until the global settlement amount has been paid and the operating covenants that govern RBH’s business are lifted.

In May 2026, pursuant to its obligation under the Plan, RBH provided an annual business plan to its Plan Administrator containing updated five-year financial projections reflecting current industry dynamics. As a result, PMI determined that the estimated fair value of its investment in RBH was lower than its carrying value and recorded a non-cash impairment charge of $511 million in the second quarter of 2026. As of June 30, 2026 and December 31, 2025, the carrying value of PMI's investment in RBH was $51 million and $569 million, respectively. This included the cumulative amount of impairments and downward adjustments of $3,060 million as of June 30, 2026 and $2,549 million as of December 31, 2025. Transactions between PMI and RBH are considered to be related-party transactions from the date of deconsolidation and are included in the tables below.

The fair value of PMI’s other equity securities, which have been classified within Level 1, was $983 million and $1,291 million at June 30, 2026 and December 31, 2025, respectively. Unrealized pre-tax gain (loss) of $(308) million ($(240) million net of tax) on these equity securities was recorded in equity investments and securities (income)/loss, net on the condensed consolidated statements of earnings for the six months ended June 30, 2026.

United Arab Emirates-based Trans-Emirates Trading and Investments (FZC) ("TTI") holds a 33% non-controlling interest in Philip Morris Misr LLC ("PMM"), an entity incorporated in Egypt which is consolidated in PMI’s financial statements. PMM sells, under license, PMI brands in Egypt through an exclusive distribution agreement with a local entity that is also controlled by TTI.

Godfrey Phillips India Ltd ("GPI") is one of the non-controlling interest holders in Philip Morris India Trading Private Ltd ("PM India") (formerly IPM India), which is a 56.3% owned PMI consolidated subsidiary. GPI also acts as contract manufacturer and distributor for PM India.


	For the Six Months Ended June 30,				For the Three Months Ended June 30,
(in millions)	2026		2025		2026		2025
Net revenues:
Megapolis Group	$	1,487	$	1,264	$	783	$	715
Other	953		816		472		428
Net revenues (a)	$	2,440	$	2,080	$	1,255	$	1,143

Expenses:

Other	$	141	$	103	$	45	$	66
Expenses	$	141	$	103	$	45	$	66