v3.24.0.1
Segment Reporting:
 12 Months Ended
Dec. 31, 2023
Segment Reporting [Abstract]  
Segment Reporting:
Segment Reporting:

PMI’s subsidiaries and affiliates are primarily engaged in the manufacture and sale of cigarettes and smoke-free products, including heat-not-burn, e-vapor and oral nicotine products. Excluding the Wellness and Healthcare segment and the 2022 acquisition of Swedish Match, PMI's segments are generally organized by geographic region and managed by segment managers who are responsible for the operating and financial results of the regions inclusive of combustible tobacco and smoke-free product categories sold in the region. Effective in January 2023, PMI began managing its business in four geographical segments, down from six previously, in addition to its continuing Swedish Match and Wellness and Healthcare segments. The four geographical segments are as
follows: Europe Region; South and Southeast Asia, Commonwealth of Independent States, Middle East and Africa Region ("SSEA, CIS & MEA"); East Asia, Australia, and PMI Duty Free Region ("EA, AU & PMI DF"); and Americas Region. The Swedish Match segment represents the fourth quarter 2022 acquisition of the company. The Wellness and Healthcare segment reflects the operating results of Vectura Fertin Pharma. For further details on these acquisitions, see Note 3. Acquisitions. PMI records net revenues and operating income to its geographical segments based upon the geographic area in which the customer resides.

PMI’s chief operating decision maker evaluates geographical segment performance and allocates resources based on regional operating income, which includes results from all product categories sold in each region, excluding Swedish Match and Wellness and Healthcare products. Business operations in the Swedish Match segment and the Wellness and Healthcare segment are evaluated separately. Interest expense, net, and provision for income taxes are centrally managed and, accordingly, such items are not presented by segment since they are excluded from the measure of segment profitability reviewed by management. Information about total assets by segment is not disclosed because such information is not reported to or used by PMI’s chief operating decision maker. Segment goodwill and other intangible assets, net, are disclosed in Note 5. Goodwill and Other Intangible Assets, net. The accounting policies of the segments are the same as those described in Note 2. Summary of Significant Accounting Policies.
PMI disaggregates its net revenues from contracts with customers by product category for each of PMI's four geographical segments and for the Swedish Match segment. For the Wellness and Healthcare business, Vectura Fertin Pharma discussed above, net revenues from contracts with customers are included in the Wellness and Healthcare segment. PMI believes this best depicts how the nature, amount, timing and uncertainty of its revenue and cash flows are affected by economic factors.

Net revenues by segment were as follows:
For the Years Ended December 31,
(in millions)202320222021
Net revenues:
Europe$13,598 $12,869 $13,155 
SSEA, CIS & MEA
10,629 10,467 9,858 
EA, AU & PMI DF
6,201 5,936 6,448 
Americas1,944 1,903 1,843 
Swedish Match2,496 316 — 
Wellness and Healthcare306 271 101 
Net revenues$35,174 $31,762 $31,405 
    

Total net revenues attributable to customers located in Japan, PMI's largest market in terms of net revenues, were $3.9 billion, $3.9 billion and $4.6 billion in 2023, 2022 and 2021, respectively. PMI had one customer in the EA, AU & PMI DF segment that accounted for 11%, 12% and 15% of PMI’s consolidated net revenues, and one customer in the Europe segment that accounted for 12%, 13% and 13% of PMI’s consolidated net revenues in 2023, 2022 and 2021, respectively.
PMI's net revenues by product category were as follows:
For the Years Ended December 31,
(in millions)202320222021
Combustible tobacco products:
Europe$8,037 $7,694 $8,767 
SSEA, CIS & MEA
9,321 9,173 8,734 
EA, AU & PMI DF
2,676 2,831 2,861 
Americas1,869 1,804 1,706 
Swedish Match431 70 — 
Total combustible tobacco products22,334 21,572 22,067 
Smoke-free products:
Smoke-free products excluding Wellness and Healthcare:
Europe5,561 5,175 4,388 
SSEA, CIS & MEA
1,308 1,294 1,124 
EA, AU & PMI DF
3,525 3,105 3,587 
Americas75 99 137 
Swedish Match2,065 246 — 
Total smoke-free products excluding Wellness and Healthcare12,534 9,919 9,237 
Wellness and Healthcare306 271 101 
Total smoke-free products 12,840 10,190 9,338 
Total PMI net revenues$35,174 $31,762 $31,405 
Note: Sum of product categories or Regions might not foot to total PMI due to roundings.

Net revenues related to combustible tobacco products refer to the operating revenues generated from the sale of these products, including shipping and handling charges billed to customers, net of sales and promotion incentives, and excise taxes. These net revenue amounts consist of the sale of PMI's cigarettes and other tobacco products that are combusted. Other tobacco products primarily include roll-your-own and make-your-own cigarettes, pipe tobacco, cigars and cigarillos and do not include smoke-free products.

Net revenues related to smoke-free products refer to the operating revenues generated from the sale of these products, including shipping and handling charges billed to customers, net of sales and promotion incentives, and excise taxes, if applicable. These net revenue amounts consist of the sale of all of PMI's products that are not combustible tobacco products, such as heat-not-burn, e-vapor, and oral nicotine, also including wellness and healthcare products, as well as consumer accessories such as lighters and matches.

Net revenues related to wellness and healthcare products consist of operating revenues generated from the sale of products primarily associated with inhaled therapeutics, and oral and intra-oral delivery systems that are included in the operating results of PMI's Wellness and Healthcare business, Vectura Fertin Pharma.
Operating income (loss) by segment were as follows:
For the Years Ended December 31,
(in millions)
202320222021
Operating income (loss):
Europe$6,012 $5,802 $6,409 
SSEA, CIS & MEA
3,047 3,864 3,295 
EA, AU & PMI DF
2,481 2,424 2,836 
Americas62 436 487 
Swedish Match824 (22)— 
Wellness and Healthcare(870)(258)(52)
Operating income
$11,556 $12,246 $12,975 


Items affecting the comparability of results from operations were as follows:

•Impairment of goodwill and other intangibles – For the year ended December 31, 2023, PMI recorded $680 million of goodwill and non-amortizable intangible assets impairment charges that was included in the Wellness and Healthcare segment. For the year ended December 31, 2022, PMI recorded an impairment charge related to definite-lived intangible assets of $112 million. This charge was included in the Wellness and Healthcare segment. For further details, see Note 5. Goodwill and Other Intangible Assets, net.
•South Korea indirect tax charge – See Note 18. Contingencies for details of the $204 million pre-tax charge included in the EA, AU & PMI DF segment results for the year ended December 31, 2023.
•Termination of distribution arrangement in the Middle East – In the first quarter of 2023, PMI recorded a pre-tax charge of $80 million following the termination of a distribution arrangement in the Middle East. This pre-tax charge was recorded as a reduction of net revenues in the consolidated statements of earnings, and was included in the SSEA, CIS & MEA segment results for the year ended December 31, 2023.
•Charges related to the war in Ukraine - See Note 4. War in Ukraine for details of the $53 million and $151 million pre-tax charges in the Europe segment for the years ended December 31, 2023 and 2022, respectively.
•Swedish Match AB acquisition accounting related item - See Note 3. Acquisitions for details of the $18 million and $125 million pre-tax purchase accounting adjustments related to the sale of acquired inventories stepped up to fair value included in the Swedish Match segment for the years ended December 31, 2023 and 2022, respectively.
•Asset impairment and exit costs - See Note 20. Asset Impairment and Exit Costs for details of the $109 million and $216 million pre-tax charges for the year ended December 31, 2023 and 2021, respectively, as well as a breakdown of these costs by segment.
•Termination of agreement with Foundation for a Smoke-Free World – On September 29, 2023, PMI and the Foundation for a Smoke-Free World (the "Foundation") entered into the Final Grant Agreement and Termination of the Second Amended and Restated Pledge Agreement ("Agreement"). Under the terms of the agreement, PMI paid $140 million in the third quarter of 2023 in return for the termination of the pledge agreement between the parties. As a result, in the third quarter of 2023, PMI recorded a pre-tax charge of $140 million commensurate with the early termination of the pledge agreement. The pre-tax charge was recorded in marketing, administration and research costs in the consolidated statements of earnings for the year ended December 31, 2023 and was included in the operating results of the following segments: Europe ($62 million); SSEA, CIS & MEA ($44 million); EA, AU & PMI DF ($27 million); and Americas ($7 million).
•Saudi Arabia customs assessments - In June 2021, PMI recorded a pre-tax charge of $246 million in relation to additional customs duties in Saudi Arabia assessed for the periods of 2014 through 2020 in line with existing and contemplated arrangements with our distributors. In accordance with U.S. GAAP, the charge was recorded as a reduction in net revenues of combustible tobacco products included in the SSEA, CIS & MEA segment for the year ended December 31, 2021.
•Asset acquisition cost - See Note 3. Acquisitions for the details of the $51 million pre-tax charge associated with the asset acquisition of OtiTopic, Inc. included in the Wellness and Healthcare segment within the operating income table above for the year ended December 31, 2021.
Other segment data were as follows:
For the Years Ended December 31,
(in millions)
202320222021
Depreciation and amortization expense:
Europe$333 $377 $371 
SSEA, CIS & MEA309 340 354 
EA, AU & PMI DF148 167 168 
Americas77 74 71 
Swedish Match447 34 — 
Wellness and Healthcare84 85 34 
Total depreciation and amortization expense
$1,398 $1,077 $998 
For the Years Ended December 31,
(in millions)
202320222021
Capital expenditures:
Europe$778 $642 $481 
SSEA, CIS & MEA287 258 149 
EA, AU & PMI DF38 25 36 
Americas57 92 54 
Swedish Match127 15 — 
Wellness and Healthcare34 45 28 
Total capital expenditures
$1,321 $1,077 $748 

PMI’s total property, plant and equipment, net and other assets by geographic area were:
At December 31,
(in millions)
202320222021
Long-lived assets:
Europe$5,697 $5,179 $4,918 
SSEA, CIS & MEA2,197 2,047 2,181 
East Asia and Australia481 675 742 
Americas1,310 1,282 666 
Total long-lived assets9,685 9,183 8,507 
Altria Group, Inc. agreement2,777 1,002 — 
Financial instruments701 456 210 
Total property, plant and equipment, net and Other assets
$13,163 $10,641 $8,717 
Long-lived assets consist of non-current assets other than goodwill; other intangible assets, net; deferred tax assets, equity investments, financial instruments and payment under the agreement with Altria Group, Inc., see Note 3, Acquisitions and Note 18, Contingencies. PMI's largest markets in terms of long-lived assets are Switzerland, Indonesia and Italy. Total long-lived assets located in Switzerland, which is reflected in the Europe segment above, were $1.6 billion, $1.4 billion and $1.3 billion at December 31, 2023, 2022 and 2021, respectively. Total long-lived assets located in Indonesia, which is reflected in the SSEA, CIS & MEA segment above, were $1.1 billion, $0.9 billion and $0.9 billion at December 31, 2023, 2022 and 2021, respectively. Total long-lived assets located in Italy, which is reflected in the Europe segment above, were $1.0 billion, $0.9 billion and $0.9 billion at December 31, 2023, 2022 and 2021, respectively.