Asset Impairment and Exit Costs:

9 Months Ended

Sep. 30, 2023

Restructuring and Related Activities [Abstract]

Asset Impairment and Exit Costs:

Asset Impairment and Exit Costs:

For the nine months ended September 30, 2023, PMI recorded total pre-tax asset impairment and exit costs of $109 million related to restructuring activities. These pre-tax charges were included in marketing, administration and research costs in the condensed consolidated statements of earnings for the nine months ended September 30, 2023. For the three months ended September 30, 2023, PMI did not record such charges related to restructuring activities. For the nine months and three months ended September 30, 2022, PMI did not record any charges for asset impairment and exit costs related to restructuring activities.

For the nine months ended September 30, 2023, PMI recorded a pre-tax impairment charge on goodwill and other intangibles of $680 million within the Wellness and Healthcare segment. For the nine months and three months ended September 30, 2022, PMI recorded a pre-tax impairment charge on other intangibles of $112 million within the Wellness and Healthcare segment. For further details, see Note 6. Goodwill and Other Intangible Assets, net.

e-Vapor Products Manufacturing Optimization

In the first quarter of 2023, PMI initiated a project to fully outsource and restructure the manufacturing of e-vapor devices and consumables. As a result, PMI recorded pre-tax asset impairment and exit costs of $109 million. This amount included contract termination costs for suppliers of $78 million, including $21 million of embedded finance lease terminations, payable in cash. This amount also included asset impairment costs of $31 million, primarily related to machinery and equipment, which were non-cash charges.

Asset Impairment and Exit Costs by Segment

PMI recorded the following pre-tax asset impairment and exit costs by segment:

(in millions)	For the Nine Months Ended September 30,
	2023
Contract termination charges:
Europe	$	35
SSEA, CIS & MEA	25
EA, AU & PMI DF	15
Americas	3
Total contract termination charges	78
Asset impairment charges:
Europe	14
SSEA, CIS & MEA	9
EA, AU & PMI DF	6
Americas	2
Total asset impairment charges	31
Asset impairment and exit costs	$	109

Movement in Exit Cost Liabilities

The movement in exit cost liabilities for the nine months ended September 30, 2023 was as follows:

(in millions)
Liability balance, January 1, 2023	$	40
Charges, net	78
Cash spent	(74)
Currency/other	(8)
Liability balance, September 30, 2023	$	36

Future cash payments for exit costs incurred to date are anticipated to be substantially paid by the end of 2024, with approximately $6 million expected to be paid in the remainder of 2023.