XML 34 R19.htm IDEA: XBRL DOCUMENT v3.24.1.u1
Segment Reporting
 3 Months Ended
Mar. 31, 2024
Segment Reporting [Abstract]  
Segment Reporting Segment Reporting
At March 31, 2024, our reportable segments were (i) smokeable products, consisting of combustible cigarettes and machine-made large cigars; and (ii) oral tobacco products, consisting of MST, snus and oral nicotine pouches.
Our all other category included (i) NJOY (beginning June 1, 2023); (ii) Horizon; (iii) Helix International; and (iv) other business activities, substantially all of which consists of research and development (“R&D”) expense related to certain new product platforms and technologies.
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, 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 Three Months Ended March 31,
(in millions)20242023
Net revenues:
Smokeable products$4,906 $5,090 
Oral tobacco products651 628 
All other19 1 
Net revenues$5,576 $5,719 
Earnings before income taxes:
OCI:
Smokeable products$2,439 $2,503 
Oral tobacco products435 416 
All other(61)(9)
Amortization of intangibles(27)(18)
General corporate expenses(112)(135)
Operating income2,674 2,757 
Interest and other debt expense, net254 229 
Net periodic benefit income, excluding service cost(24)(31)
(Income) losses from investments in equity securities(295)80 
Earnings before income taxes$2,739 $2,479 
The comparability of OCI for our reportable segments was affected by the following:
▪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 Three Months Ended March 31,
(in millions)20242023
Smokeable products segment$18 $12 
General corporate expenses6 98 
Interest and other debt expense, net— 1 
Total$24 $111 
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. For further discussion, see Note 13. Contingencies.
▪Other Business Activities: Our R&D investments have evolved and shifted from our traditional tobacco businesses to new product platforms and technologies. Beginning January 1, 2024, our R&D expense is aligned with how our CODM now evaluates performance results and allocates resources for segment reporting. For the three months ended March 31, 2024, using this approach, we recorded substantially all of our pre-tax R&D expense of $51 million in our all other category, which now includes other business activities related to R&D expense for certain new product platforms and technologies. For the three months ended March 31, 2023, the majority of our pre-tax R&D expense of $43 million was recorded in our smokeable products segment.