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Segment Reporting | 9 Months Ended
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Sep. 30, 2022
Segment Reporting [Abstract] |
Segment Reporting | Segment Reporting Our products include smokeable tobacco products, consisting of combustible cigarettes manufactured and sold by PM USA, and machine-made large cigars and pipe tobacco manufactured and sold by Middleton; and oral tobacco products, consisting of MST and snus products manufactured and sold by USSTC, and oral nicotine pouches manufactured and sold by Helix. These products constitute our reportable segments of smokeable products and oral tobacco products at September 30, 2022. The financial services and the innovative tobacco products businesses, which include the heated tobacco business and Helix ROW, are included in all other. Prior to the sale of our wine business on October 1, 2021, wine produced and/or sold by Ste. Michelle was a reportable segment. Our chief operating decision maker (“CODM”) reviews operating companies income (loss) (“OCI”) to evaluate the performance of, and allocate resources to, our segments. OCI for our segments is defined as operating income before general corporate expenses and amortization of intangibles. Interest and other debt expense, net, along with net periodic benefit income/cost, excluding service cost, and provision (benefit) for income taxes are centrally managed at the corporate level and, accordingly, such items are not presented by segment since they are excluded from the measure of segment profitability reviewed by our CODM. Segment data were as follows:
|  | For the Nine Months Ended September 30, |  | For the Three Months Ended September 30,
(in millions) |  | 2022 |  | 2021 |  | 2022 |  | 2021
Net Revenues: |  |  |  |  |  |  |  |
Smokeable products |  | $ | 17,020 |  |  | $ | 17,275 |  |  | $ | 5,882 |  |  | $ | 5,975 |
Oral tobacco products |  | 1,948 |  |  | 1,945 |  |  | 670 |  |  | 626 |
Wine |  | — |  |  | 494 |  |  | — |  |  | 177 |
All other |  | 17 |  |  | 44 |  |  | (2) |  |  | 8 |
Net revenues |  | $ | 18,985 |  |  | $ | 19,758 |  |  | $ | 6,550 |  |  | $ | 6,786 |
Earnings (losses) before Income Taxes: |  |  |  |  |  |  |  |
OCI: |  |  |  |  |  |  |  |
Smokeable products |  | $ | 8,112 |  |  | $ | 7,901 |  |  | $ | 2,791 |  |  | $ | 2,753 |
Oral tobacco products |  | 1,262 |  |  | 1,269 |  |  | 425 |  |  | 405 |
Wine |  | — |  |  | 21 |  |  | — |  |  | (24) |
All other |  | (27) |  |  | (56) |  |  | (7) |  |  | (30) |
Amortization of intangibles |  | (54) |  |  | (53) |  |  | (19) |  |  | (18) |
General corporate expenses |  | (192) |  |  | (255) |  |  | (78) |  |  | (135) |
Operating income |  | 9,101 |  |  | 8,827 |  |  | 3,112 |  |  | 2,951 |
Interest and other debt expense, net |  | 832 |  |  | 869 |  |  | 271 |  |  | 266 |
Loss on early extinguishment of debt |  | — |  |  | 649 |  |  | — |  |  | — |
Net periodic benefit income, excluding service cost |  | (137) |  |  | (152) |  |  | (44) |  |  | (63) |
(Income) losses from investments in equity securities |  | 3,707 |  |  | 5,789 |  |  | 2,478 |  |  | 5,915 |
(Gain) loss on Cronos-related financial instruments |  | 14 |  |  | 128 |  |  | — |  |  | 135 |
Earnings (losses) before income taxes |  | $ | 4,685 |  |  | $ | 1,544 |  |  | $ | 407 |  |  | $ | (3,302) |
The comparability of OCI for our reportable segments was affected by the following: ▪Non-Participating Manufacturer (“NPM”) Adjustment Items: We recorded pre-tax (income) for NPM adjustment items as follows:
|  | For the Nine Months Ended September 30, |  | For the Three Months Ended September 30,
(in millions) |  | 2022 |  | 2021 |  | 2022 |  | 2021
Smokeable products segment |  | $ | (60) |  |  | $ | (53) |  |  | $ | — |  |  | $ | (21) |
Interest and other debt expense, net |  | — |  |  | (23) |  |  | — |  |  | (23) |
Total |  | $ | (60) |  |  | $ | (76) |  |  | $ | — |  |  | $ | (44) |
We recorded the amounts in the table shown above for the smokeable products segment as reductions in cost of sales in our condensed consolidated statements of earnings (losses), which increased OCI in our smokeable products segment. NPM adjustment items result from the resolutions of certain disputes with states and territories related to the NPM adjustment provision under the Master Settlement Agreement (such dispute resolutions are referred to as “NPM Adjustment Items” and are more fully described in Health Care Cost Recovery Litigation in Note 11. Contingencies). ▪Tobacco and Health and Certain Other Litigation Items: We recorded pre-tax charges related to tobacco and health and certain other litigation items as follows:
|  | For the Nine Months Ended September 30, |  | For the Three Months Ended September 30,
(in millions) |  | 2022 |  | 2021 |  | 2022 |  | 2021
Smokeable products segment |  | $ | 71 |  |  | $ | 72 |  |  | $ | 21 |  |  | $ | 29 |
General corporate expenses |  | 27 |  |  | 70 |  |  | 20 |  |  | 70 |
Interest and other debt expense, net |  | 3 |  |  | 6 |  |  | 2 |  |  | 6 |
Total |  | $ | 101 |  |  | $ | 148 |  |  | $ | 43 |  |  | $ | 105 |
We recorded the amounts shown in the table above for the smokeable products segment and general corporate expenses in marketing, administration and research costs in our condensed consolidated statements of earnings (losses). For further discussion, see Note 11. Contingencies. ▪Acquisition and Disposition-Related Costs: Disposition-Related Costs: We recorded pre-tax disposition-related costs of $51 million for the nine and three months ended September 30, 2021 in our former wine segment, which consisted of a pre-tax charge of $41 million to record the assets and liabilities associated with UST’s sale of its subsidiary, International Wine & Spirits Ltd. (which included Ste. Michelle), at their fair value less costs to sell and $10 million of other disposition-related costs. We included these costs in marketing, administration and research costs in our consolidated statements of earnings (losses). Acquisition-Related Costs: We recorded pre-tax acquisition-related costs of $37 million for the nine months ended September 30, 2021 in our oral tobacco products segment primarily for the settlement of an arbitration related to the 2019 on! transaction. We included these costs in marketing, administration and research costs in our condensed consolidated statements of earnings (losses).

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI https://asc.fasb.org/topic&trid=2134510 + Details
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