Philip Morris International (PM) risk factors, FY2025 10-K

Philip Morris International's FY2025 10-K, filed Feb 06, 2026, lists 36 risk factors in 8 groups. Against the prior year's 35: 7 new, 6 dropped, 19 substantially reworded.

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Risk factors listed
368 groups
New this year
7vs 35 last year
Dropped
6since the prior 10-K
Substantially reworded
19of those kept
Section length
9k wordsItem 1A

What the changes say

  • Regulatory hurdles and potential product bans threaten smoke-free growth in key markets like the U.S.
  • Operations in Russia and Ukraine face ongoing war-related risks, asset nationalization, and impairment.
  • Expanded disclosures address emerging liabilities around artificial intelligence usage and strict data privacy laws.

What changed since the prior 10-K

New

  • New

    excluding tobacco companies from transparent public dialogue regarding public health and other policy matters

    Regulatory initiatives that commoditize tobacco or restrict adult access to smoke-free products could materially harm our financial results.

  • New

    The success of our business in the United States is dependent on an evolving legal and regulatory framework

    Our U.S. commercialization depends on maintaining strict FDA authorizations for IQOS and ZYN nicotine pouches without youth uptake spikes.

  • New

    We may be unable to anticipate changes in adult consumer preferences

    Inability to adapt product offerings to changing adult consumer preferences or marketing restrictions could reduce our competitiveness and revenues.

  • NewRisks Related to the Impact of the War in Ukraine on our Business

    In 2025, Russia accounted for around 9% of our total cigarette and heated tobacco unit shipment volume, and around 6% of our total net revenues. Ukraine accounted for around 2% of our total cigarette and heated tobacco unit shipment volume, and around 1% of our total net revenues

    In 2025, Russia and Ukraine accounted for 9% and 2% of shipment volume respectively, exposing us to potential asset nationalization and impairment.

  • NewRisks Related to Sourcing, Distribution and Quality of Products, Services and Materials

    Risks related to the natural environment and related legal or regulatory developments may have a negative impact on our business and results of operations

    Extreme weather events like droughts and floods could disrupt our tobacco-growing areas, manufacturing operations, and supply chain.

  • NewRisks Related to Cybersecurity, Data Governance and Artificial Intelligence

    Our or our business partners’ failure or inability to adhere to privacy, data, artificial intelligence and information security laws could result in reputational harm, legal liability, and adversely affect our operating results

    Failure to comply with complex privacy and information security laws like GDPR could lead to legal liability and reputational harm.

  • NewRisks Related to Cybersecurity, Data Governance and Artificial Intelligence

    We increasingly use artificial intelligence-based solutions in our business, which could result in reputational harm, legal liability, and adversely affect our operating results

    Incorporating artificial intelligence solutions in our operations introduces technical risks, errors, and potential disruptions to our IT networks.

Dropped

  • Dropped

    As a result of Russia’s invasion of Ukraine, certain taxing jurisdictions, including the U.S., have proposed punitive tax legislation applicable to companies doing business in Russia, which could also have a material adverse impact on our effective tax rate if enacted thereby reducing our net earnings

  • DroppedRisks Related to Sourcing and Distribution of Products, Services and Materials

    The effects of climate change, other environmental issues, and related legal or regulatory responses may have a negative impact on our business and results of operations

  • DroppedRisks Related to our Competitive Environment

    Our business is subject to changes in adult consumer preferences, which may be influenced by local economic conditions, accessibility to our products and availability of accurate information related to our products

  • DroppedRisks Related to our Competitive Environment

    We may be unable to expand our brand portfolio through acquisitions or the development of strategic business relationships, and the intended benefits from our investments may not materialize

  • DroppedRisks Related to Cybersecurity and Data Governance

    We continue to make investments in administrative, technical, and physical safeguards to maintain information security protections in line with industry standards and best practices. We evaluate the adequacy of preventative actions to reduce security incidents on an ongoing basis

  • DroppedRisks Related to Acquisitions and Divestitures

    Accounting adjustments related to acquisitions could adversely affect our financial results

Reworded

  • 100% rewrittenRisks Related to the Impact of the War in Ukraine on our Business

    Our business, results of operations, cash flows and financial position may be adversely impacted by the continuation and consequences of the war in Ukraine

    Removed specific 2024 shipment and revenue figures for Russia and Ukraine, updating the war's ongoing impact.

  • 86% rewritten

    We may be unsuccessful in our efforts to introduce, commercialize, and grow smoke-free products in existing and new markets, and regulators may prohibit or significantly restrict the commercialization of these products or the communication of scientifically substantiated information and claims

    Added risks regarding inequitable regulation of smoke-free product categories compared to cigarettes.

    Was: We may be unsuccessful in our attempts to introduce, commercialize, and grow smoke-free products in existing and new markets, and regulators may prohibit or significantly restrict the commercialization of these products or the communication of scientifically substantiated information and claims

  • 83% rewritten

    Our ability to grow profitability may be limited by our inability to introduce new products, enter new markets, maintain sufficient production capacity, or improve our margins through higher pricing and improvements in our brand and geographic mix

    Added a warning that key management business metrics may not accurately reflect all aspects of the evolving business.

  • 76% rewritten

    Consumption of tax-paid cigarettes continues to decline in many of our markets

    Specified that the decline in consumption affects our ability to fund our smoke-free transformation.

  • 72% rewritten

    Additionally, any claims, regardless of merit, challenging our research and clinical data available to date, may impact the development and maintenance of science-based regulatory frameworks for the commercialization of the SFP category and the commercialization of the SFP category in general

    Replaced 'youth' with 'underage persons' regarding product access prevention efforts.

    Was: Additionally, any claims, regardless of merit, challenging our research and clinical data available to date, may impact the development of science-based regulatory frameworks for the commercialization of the SFP category and the commercialization of the SFP category in general

  • 67% rewrittenRisks Related to Legal Challenges and Investigations

    The research, development, and commercialization of non-recreational cannabinoid products subjects the Company to legal, regulatory, reputational and other risks

    Renamed our Wellness and Healthcare business to Wellness and noted commercialization is exploratory.

  • 65% rewrittenRisks Related to Taxation and Finance

    We may be required to write down assets due to impairment, which could have a material adverse effect on our results of operations or financial position

    Removed a sentence about testing goodwill and non-amortizable intangible assets annually.

  • 63% rewritten

    Our business faces significant governmental actions aimed at increasing regulatory requirements with the goal of reducing or preventing the use of tobacco or nicotine-containing products

    Specified that volume reductions apply to combustible products and added prohibitions on smoke-free product categories.

    Was: Our business faces significant governmental action aimed at increasing regulatory requirements with the goal of reducing or preventing the use of tobacco or nicotine-containing products

  • 60% rewrittenRisks Related to our International Operations

    Because we have operations in numerous countries, our results may be adversely impacted by economic, regulatory and political developments, natural disasters, pandemics or conflicts

  • 59% rewrittenRisks Related to Taxation and Finance

    We may be unsuccessful in our efforts to differentiate smoke-free products and cigarettes with respect to taxation

  • 55% rewrittenRisks Related to Taxation and Finance

    Changes in the earnings mix and changes in tax laws may result in significant variability in our effective tax rates. Our ability to receive payments from foreign subsidiaries or to repatriate royalties and dividends could be restricted by local country currency exchange controls and other regulations

  • 50% rewrittenRisks Related to our International Operations

    A sustained period of elevated inflation across the markets in which we operate could result in higher operating and financing costs and lead to reduced demand for our products

  • 50% rewritten

    We face intense competition, and our failure to compete effectively could have a material adverse effect on our profitability and results of operations

  • 50% rewrittenRisks Related to Sourcing, Distribution and Quality of Products, Services and Materials

    Government mandated prices, production control programs, and shifts in crops driven by economic conditions may increase the cost or reduce the quality of tobacco and other agricultural products used to manufacture our products

    Was: Government mandated prices, production control programs, and shifts in crops driven by economic conditions may increase the cost or reduce the quality of the tobacco and other agricultural products used to manufacture our products

  • 40% rewrittenRisks Related to Sourcing, Distribution and Quality of Products, Services and Materials

    Use of third-parties may negatively impact the distribution, quality, and availability of our products and services, and we may be required to replace third-party contract distributors, manufacturers or service providers

  • 33% rewritten

    Our ability to achieve our strategic goals may be impaired if we fail to attract, motivate and retain the best global talent and effectively align our organizational design with the goals of our transformation

  • 28% rewrittenRisks Related to Cybersecurity, Data Governance and Artificial Intelligence

    We are significantly dependent on our and third-party information technology networks and systems, and a cybersecurity incident or attack against those networks or systems may adversely impact our business and operations

  • 24% rewrittenRisks Related to Sourcing, Distribution and Quality of Products, Services and Materials

    A prolonged disruption of facilities used to produce our products could have a material adverse effect on our business, financial condition and results of operations

    Was: A prolonged disruption of our production facilities could have a material adverse effect on our business, financial condition and results of operations

  • 21% rewrittenRisks Related to Legal Challenges and Investigations

    From time to time, we are subject to governmental investigations on a range of matters

All 36 risk factors

Headings as the filing states them, in filing order.

Other

  1. 01Forward-Looking and Cautionary Statements
  2. 02We may be unsuccessful in our efforts to introduce, commercialize, and grow smoke-free products in existing and new markets, and regulators may prohibit or significantly restrict the commercialization of these products or the communication of scientifically substantiated information and claims86% rewritten
  3. 03Additionally, any claims, regardless of merit, challenging our research and clinical data available to date, may impact the development and maintenance of science-based regulatory frameworks for the commercialization of the SFP category and the commercialization of the SFP category in general72% rewritten
  4. 04Consumption of tax-paid cigarettes continues to decline in many of our markets76% rewritten
  5. 05Our business faces significant governmental actions aimed at increasing regulatory requirements with the goal of reducing or preventing the use of tobacco or nicotine-containing products63% rewritten
  6. 06excluding tobacco companies from transparent public dialogue regarding public health and other policy mattersNew
  7. 07The success of our business in the United States is dependent on an evolving legal and regulatory frameworkNew
  8. 08We face intense competition, and our failure to compete effectively could have a material adverse effect on our profitability and results of operations50% rewritten
  9. 09We may be unable to anticipate changes in adult consumer preferencesNew
  10. 10The financial and business performance of our smoke-free products is less predictable than our cigarette business
  11. 11Our ability to grow profitability may be limited by our inability to introduce new products, enter new markets, maintain sufficient production capacity, or improve our margins through higher pricing and improvements in our brand and geographic mix83% rewritten
  12. 12Our ability to achieve our strategic goals may be impaired if we fail to attract, motivate and retain the best global talent and effectively align our organizational design with the goals of our transformation33% rewritten

Risks Related to Taxation and Finance

  1. 13We may be unsuccessful in our efforts to differentiate smoke-free products and cigarettes with respect to taxation59% rewritten
  2. 14Changes in the earnings mix and changes in tax laws may result in significant variability in our effective tax rates. Our ability to receive payments from foreign subsidiaries or to repatriate royalties and dividends could be restricted by local country currency exchange controls and other regulations55% rewritten
  3. 15Disruptions in the credit markets or changes to our credit ratings may adversely affect our business
  4. 16We may be required to write down assets due to impairment, which could have a material adverse effect on our results of operations or financial position65% rewritten

Risks Related to the Impact of the War in Ukraine on our Business

  1. 17Our business, results of operations, cash flows and financial position may be adversely impacted by the continuation and consequences of the war in Ukraine100% rewritten
  2. 18In 2025, Russia accounted for around 9% of our total cigarette and heated tobacco unit shipment volume, and around 6% of our total net revenues. Ukraine accounted for around 2% of our total cigarette and heated tobacco unit shipment volume, and around 1% of our total net revenuesNew

Risks Related to Sourcing, Distribution and Quality of Products, Services and Materials

  1. 19Use of third-parties may negatively impact the distribution, quality, and availability of our products and services, and we may be required to replace third-party contract distributors, manufacturers or service providers40% rewritten
  2. 20Risks related to the natural environment and related legal or regulatory developments may have a negative impact on our business and results of operationsNew
  3. 21Government mandated prices, production control programs, and shifts in crops driven by economic conditions may increase the cost or reduce the quality of tobacco and other agricultural products used to manufacture our products50% rewritten
  4. 22A prolonged disruption of facilities used to produce our products could have a material adverse effect on our business, financial condition and results of operations24% rewritten
  5. 23We could decide, or be required to, recall products, which could have a material adverse effect on our business, reputation, results of operations, cash flows or financial position

Risks Related to our International Operations

  1. 24Because we have operations in numerous countries, our results may be adversely impacted by economic, regulatory and political developments, natural disasters, pandemics or conflicts60% rewritten
  2. 25In certain markets, we are dependent on governmental approvals of various actions such as price changes, and failure to obtain such approvals could impair growth of our profitability
  3. 26Our reported results could be adversely affected by unfavorable currency exchange rates and currency fluctuations could impair our competitiveness. Our results could also be adversely affected by capital controls or by foreign currency exchange constraints or devaluations
  4. 27A sustained period of elevated inflation across the markets in which we operate could result in higher operating and financing costs and lead to reduced demand for our products50% rewritten

Risks Related to Legal Challenges and Investigations

  1. 28Litigation related to tobacco and nicotine products could substantially reduce our profitability and could severely impair our liquidity
  2. 29From time to time, we are subject to governmental investigations on a range of matters21% rewritten
  3. 30We may be unable to adequately protect our intellectual property rights, and disputes relating to intellectual property rights could harm our business
  4. 31The research, development, and commercialization of non-recreational cannabinoid products subjects the Company to legal, regulatory, reputational and other risks67% rewritten

Risks Related to Illicit Trade

  1. 32Our revenues may be materially adversely affected as a result of counterfeiting, contraband, cross-border purchases, illicit products, non-tax-paid volume produced by local manufacturers, and other non-compliant or illicit cigarettes or smoke-free products

Risks Related to Cybersecurity, Data Governance and Artificial Intelligence

  1. 33We are significantly dependent on our and third-party information technology networks and systems, and a cybersecurity incident or attack against those networks or systems may adversely impact our business and operations28% rewritten
  2. 34Our or our business partners’ failure or inability to adhere to privacy, data, artificial intelligence and information security laws could result in reputational harm, legal liability, and adversely affect our operating resultsNew
  3. 35We increasingly use artificial intelligence-based solutions in our business, which could result in reputational harm, legal liability, and adversely affect our operating resultsNew

Risks Related to Acquisitions and Divestitures

  1. 36We may not successfully identify, complete, or realize the benefits from strategic acquisitions, divestitures, joint ventures, or investments

Other Philip Morris International 10-Ks

  • FY2024 10-K risk factors
    35 risks

    Philip Morris faces heavy risks transitioning to smoke-free products amid strict regulation and unpredictable consumer adoption rates.

    Filed Feb 06, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.