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Segment Reporting
 6 Months Ended
Jun. 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; 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 June 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 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 Six Months Ended June 30,For the Three Months Ended June 30,
(in millions)2022202120222021
Net Revenues:
Smokeable products$11,138 $11,300 $5,873 $6,050 
Oral tobacco products1,278 1,319 665 693 
Wine— 317— 167 
All other19 36 5 26 
Net revenues$12,435 $12,972 $6,543 $6,936 
Earnings before Income Taxes:
OCI:
Smokeable products$5,321 $5,148 $2,762 $2,776 
Oral tobacco products837 864 430 472 
Wine— 45 — 27 
All other(20)(26)(15)(12)
Amortization of intangibles(35)(35)(18)(18)
General corporate expenses(114)(120)(54)(59)
Operating income5,989 5,876 3,105 3,186 
Interest and other debt expense, net561 603 280 295 
Loss on early extinguishment of debt— 649 — — 
Net periodic benefit income, excluding service cost(93)(89)(47)(46)
(Income) losses from equity investments1,229 (126)1,263 (75)
(Gain) loss on Cronos-related financial instruments14 (7)4 103 
Earnings before income taxes$4,278 $4,846 $1,605 $2,909 
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 of $60 million and $32 million for the six months ended June 30, 2022 and 2021, respectively, in our smokeable products segment. We recorded these items in cost of sales in our condensed consolidated statements of earnings. 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 Six Months Ended June 30,For the Three Months Ended June 30,
(in millions)2022202120222021
Smokeable products segment$50 $43 $38 $8 
General corporate expenses7 — 7 — 
Interest and other debt expense, net1 — 1 — 
Total$58 $43 $46 $8 
We recorded the amounts shown in the table above for the smokeable products segment in marketing, administration and research costs in our condensed consolidated statements of earnings. For further discussion, see Note 11. Contingencies.
▪Acquisition-Related Costs: We recorded pre-tax acquisition-related costs of $37 million for the six months ended June 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.