v3.25.0.1
Segment Reporting:
 12 Months Ended
Dec. 31, 2024
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, 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. As discussed in Note 1. Background and Basis of Presentation, in January 2024, PMI updated its segment reporting by including the former Swedish Match segment results into the four existing geographical 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 Wellness and Healthcare segment remains unchanged.

PMI’s Chief Executive Officer, who is the chief operating decision maker ("CODM") evaluates geographical segment performance based on the regional operating income, which includes results from all product categories sold in each region, excluding Wellness and Healthcare products. Business operations in the Wellness and Healthcare segment are evaluated separately. The CODM reviews short-term and long-term trends, forecasts, and budget-to-actual variances to assess geographical segment performance and to allocate resources. 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 CODM. 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, except the Wellness and Healthcare business. PMI believes this best depicts how the nature, amount, timing and uncertainty of its revenue and cash flows are affected by economic factors.

On November 27, 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ASU 2023-07, “Improvements to Reportable Segment Disclosures” (“ASU 2023-07”). ASU 2023-07 improves reportable segment disclosures, primarily through enhanced disclosures about significant segment expenses that impact segment profit or loss, regularly provided to the chief operating decision maker. For further details, see Note 23. New Accounting Standards.

Net revenues, significant expenses, and operating income (loss) by segment were as follows:
(in millions) EuropeSSEA, CIS & MEAEA, AU & PMI DFAmericasWellness & HealthcareTotal

For the Year Ended December 31, 2024
Net revenues$15,357 $11,261 $6,393 $4,534 $333 $37,878 
Less:
Cost of sales4,206 5,313 2,011 1,531 268 13,329 
Marketing, administration and research costs4,213 2,519 1,504 2,455 456 11,147 
Operating income (loss)$6,938 $3,429 $2,878 $548 $(391)$13,402 

For the Year Ended December 31, 2023
Net revenues$14,231 $10,629 $6,201 $3,807 $306 $35,174 
Less:
Cost of sales4,045 5,109 1,978 1,485 276 12,893 
Marketing, administration and research costs4,017 2,384 1,684 1,740 235 10,060 
Impairment of goodwill— — — — 665 665 
Operating income (loss)$6,169 $3,136 $2,539 $582 $(870)$11,556 

For the Year Ended December 31, 2022
Net revenues$12,972 $10,467 $5,936 $2,116 $271 $31,762 
Less:
Cost of sales3,656 4,343 2,026 1,036 341 11,402 
Marketing, administration and research costs3,540 2,260 1,486 640 188 8,114 
Operating income (loss)$5,776 $3,864 $2,424 $440 $(258)$12,246 

Total net revenues attributable to customers located in Japan, PMI's largest market in terms of net revenues, were $4.1 billion, $3.9 billion and $3.9 billion in 2024, 2023 and 2022, respectively. PMI had one customer in the EA, AU & PMI DF segment that accounted for 11%, 11% and 12% of PMI’s consolidated net revenues, and one customer in the Europe segment that accounted for 11%, 12% and 13% of PMI’s consolidated net revenues in 2024, 2023 and 2022, respectively.
PMI's net revenues by product category were as follows:
For the Years Ended December 31,
(in millions)202420232022
Combustible tobacco:
Europe$8,599 $8,037 $7,694 
SSEA, CIS & MEA
9,848 9,321 9,173 
EA, AU & PMI DF
2,516 2,676 2,831 
Americas2,255 2,299 1,874 
Total combustible tobacco23,218 22,334 21,572 
Smoke-free:
Smoke-free excluding Wellness and Healthcare:
Europe6,758 6,194 5,278 
SSEA, CIS & MEA
1,413 1,308 1,294 
EA, AU & PMI DF
3,877 3,525 3,105 
Americas2,279 1,508 242 
Total Smoke-free excluding Wellness and Healthcare14,327 12,534 9,919 
Wellness and Healthcare333 306 271 
Total Smoke-free14,660 12,840 10,190 
Total PMI net revenues$37,878 $35,174 $31,762 
Note: Sum of product categories or Regions might not foot to total PMI due to rounding.

Net revenues related to combustible tobacco 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, excluding wellness and healthcare, 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 PMI's products that are not combustible tobacco products, such as heat-not-burn, e-vapor, and oral products, as well as consumer accessories.

Net revenues related to wellness and healthcare 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.


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

•Egypt sales tax charge – In the third quarter of 2024, following a ruling issued by the Higher Administrative Court in Egypt and subsequent evaluation of available remedies, PMI concluded that an adverse outcome was probable and recorded a pre-tax charge of $45 million in relation to tax assessments for general sales tax deducted on imported cutfiller for the years 2014 to 2016. This pre-tax charge was recorded in marketing, administration and research costs in the consolidated statement of earnings for the year ended December 31, 2024, and was included in the SSEA, CIS & MEA segment results.
•Loss on sale of Vectura Group – In September 2024, PMI announced the execution of a definitive agreement to sell Vectura to Molex Asia Holdings Ltd. On December 31, 2024, we completed the sale. The sale resulted in a pre-tax loss of $199 million. This pre-tax loss was recorded in marketing, administration and research costs in the consolidated statement of earnings for the year ended December 31, 2024, and was included in the Wellness and Healthcare segment results. For further details, see Note 3. Acquisitions and Divestitures.
•Restructuring charges - See Note 20. Restructuring Activities for details of the $180 million and $109 million pre-tax charges for the year ended December 31, 2024 and 2023, respectively, as well as a breakdown of these costs by segment.
•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.
•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 – On July 13, 2023, PMI's South Korean subsidiary, PM Korea, received an adverse ruling from the Supreme Court of South Korea related to cases alleging underpayment of excise taxes in connection with a 2015 excise tax increase and subsequent audit by the South Korean Board of Audit and Inspection. The Supreme Court ruling reversed previous decisions that were in PM Korea’s favor at the trial and appellate levels. As a result of the ruling, we concluded that an adverse outcome was probable. Consequently, we recorded a non-cash pre-tax charge of $204 million in marketing, administration and research costs in the consolidated statements of earning, reflecting the full amount previously paid by PM Korea, which was included in the EA, AU & PMI DF segment for the year ended December 31, 2023.
•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 ($60 million); SSEA, CIS & MEA ($41 million); EA, AU & PMI DF ($24 million); and Americas ($15 million).
•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 items – See Note 3. Acquisitions and Divestitures 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. These pre-tax purchase accounting adjustments were included in the Americas segment ($18 million in 2023 and $77 million in 2022) and the Europe segment ($48 million in 2022).

Other segment data were as follows:
For the Years Ended December 31,
(in millions)
202420232022
Depreciation and amortization expense:
Europe$492 $479 $388 
SSEA, CIS & MEA304 304 340 
EA, AU & PMI DF173 144 167 
Americas748 387 97 
Wellness & Healthcare70 84 85 
Total depreciation and amortization expense
$1,787 $1,398 $1,077 
For the Years Ended December 31,
(in millions)
202420232022
Capital expenditures:
Europe$783 $905 $657 
SSEA, CIS & MEA306 287 258 
EA, AU & PMI DF22 38 25 
Americas280 57 92 
Wellness & Healthcare53 34 45 
Total capital expenditures
$1,444 $1,321 $1,077 

PMI’s total property, plant and equipment, net and other assets by geographic area were:
At December 31,
(in millions)
202420232022
Long-lived assets:
Europe$5,540 $5,697 $5,179 
SSEA, CIS & MEA2,160 2,197 2,047 
East Asia and Australia378 481 675 
Americas1,559 1,310 1,282 
Total long-lived assets9,637 9,685 9,183 
Altria Group, Inc. agreement— 2,777 1,002 
Financial instruments456 701 456 
Total property, plant and equipment, net and Other assets
$10,093 $13,163 $10,641 
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 Divestitures 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 $1.4 billion, $1.6 billion and $1.4 billion at December 31, 2024, 2023 and 2022, respectively. Total long-lived assets located in Indonesia, which is reflected in the SSEA, CIS & MEA segment above, were $1.0 billion, $1.1 billion and $0.9 billion at December 31, 2024, 2023 and 2022, respectively. Total long-lived assets located in Italy, which is reflected in the Europe segment above, were $1.0 billion, $1.0 billion and $0.9 billion at December 31, 2024, 2023 and 2022, respectively.