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Investments in Equity Securities | 9 Months Ended
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Sep. 30, 2025
Investments [Abstract] |
Investments in Equity Securities | Investments in Equity Securities The carrying amount of our investments consisted of the following:
(in millions) |  | September 30, 2025 |  | December 31, 2024
ABI |  | $ | 8,071 |  |  | $ | 7,880 |
Cronos |  | 314 |  |  | 315 |
Total |  | $ | 8,385 |  |  | $ | 8,195 |
(Income) losses from our investments in equity securities consisted of the following:
| For the Nine Months Ended September 30, |  | For the Three Months Ended September 30, |
(in millions) | 2025 | 2024 |  | 2025 |  | 2024
ABI (1) | $ | (396) |  |  | $ | (555) |  | (2) | $ | (123) |  |  | $ | (121) |  |
Cronos (1) | (2) |  |  | 25 |  |  | 16 |  |  | 5 |  |
(Income) losses from investments in equity securities | $ | (398) |  |  | $ | (530) |  |  | $ | (107) |  |  | $ | (116) |  |
(1) Includes our share of amounts recorded by our investees and additional adjustments, if required, related to (i) the conversion from international financial reporting standards to GAAP and (ii) adjustments to our investments required under the equity method of accounting. (2) Includes $165 million of the total pre-tax gain on the ABI Transaction discussed below. Investment in ABI At September 30, 2025, we had an approximate 8.1% ownership interest in ABI, consisting of approximately 125 million restricted shares of ABI (“Restricted Shares”) and approximately 34 million ordinary shares of ABI. Our Restricted Shares: ▪are unlisted and not admitted to trading on any stock exchange; ▪are convertible by us into ordinary shares of ABI on a one-for-one basis; ▪rank equally with ordinary shares of ABI with regards to dividends and voting rights; and ▪have director nomination rights with respect to ABI. We account for our investment in ABI under the equity method of accounting because we have active representation on ABI’s board of directors and certain ABI board committees. Through this representation, we believe we have the ability to exercise significant influence over the operating and financial policies of ABI and participate in ABI’s policy making processes. We report our share of ABI’s results using a one-quarter lag because ABI’s results are not available in time for us to record them in the concurrent period. The fair value of our investment in ABI is based on (i) unadjusted quoted prices in active markets for ABI’s ordinary shares and is classified in Level 1 of the fair value hierarchy and (ii) observable inputs other than Level 1 prices, such as quoted prices for similar assets for the Restricted Shares and is classified in Level 2 of the fair value hierarchy. Because we can convert our Restricted Shares into ordinary shares at our discretion, the fair value of each Restricted Share is based on the value of an ordinary share. At September 30, 2025, the fair value of our investment in ABI was $9.5 billion, which exceeded its carrying value of $8.1 billion by approximately 18%. At December 31, 2024, the fair value of our investment in ABI approximated its carrying value of $7.9 billion. 2024 ABI Transaction In the first quarter of 2024, we converted 60 million of our Restricted Shares into ordinary shares of ABI and completed the ABI Transaction, which consisted of the following: ▪We sold 35 million of our ABI ordinary shares in a global secondary offering for gross proceeds of approximately $2.2 billion. ▪We sold $200 million of our ABI ordinary shares (approximately 3.3 million ordinary shares) to ABI in a private transaction. As a result of the ABI Transaction, in the first quarter of 2024, we received pre-tax cash proceeds totaling approximately $2.4 billion and incurred transaction costs of approximately $62 million. In conjunction with the ABI Transaction, we entered into the ASR Agreements to repurchase shares of our common stock. For further discussion of the ASR Agreements, see Note 1. Background and Basis of Presentation. As a result of the ABI Transaction, we recorded the following pre-tax amounts in our condensed consolidated statement of earnings:
(in millions) | For the Nine Months Ended September 30, 2024 |  |
Gain on partial sale of our investment | $ | 165 |  |  |  |  |  |  |
Transaction costs | (62) |  |  |  |  |  |  |
Total pre-tax gain on ABI Transaction | $ | 103 |  |  |  |  |  |  |
▪The pre-tax gain on the partial sale of our investment was recorded in (income) losses from investments in equity securities and includes a $408 million gain representing the excess of the selling price of the ABI shares sold over the carrying value of those shares, partially offset by a $243 million reclassification of the proportionate share of our pre-tax accumulated other comprehensive losses directly attributable to ABI and our designated net investment hedges related to our investment in ABI (see Note 7. Financial Instruments and Note 10. Other Comprehensive Earnings/Losses). ▪The pre-tax transaction costs were approximately $62 million ($59 million in marketing, administration and research costs and $3 million in interest and other debt expense, net), substantially all of which were underwriter fees. In addition, in conjunction with the ABI Transaction, we recorded an income tax benefit from the partial release of a valuation allowance of approximately $94 million in provision for income taxes in our condensed consolidated statement of earnings for the nine months ended September 30, 2024. Subsequently, in the third quarter of 2025, we recorded a $77 million increase to this valuation allowance as discussed further in Note 13. Income Taxes. Investment in Cronos At September 30, 2025, we had an approximate 40.9% ownership interest in Cronos, consisting of approximately 157 million shares, which we account for under the equity method of accounting. We report our share of Cronos’s results using a one-quarter lag because Cronos’s results are not available in time for us to record them in the concurrent period. The fair value of our investment in Cronos is based on unadjusted quoted prices in active markets for Cronos’s common shares and is classified in Level 1 of the fair value hierarchy. At September 30, 2025, the fair value of our investment in Cronos exceeded its carrying value by approximately $119 million or approximately 38%. At December 31, 2024, the fair value of our investment in Cronos approximated its carrying value of $315 million.

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