Philip Morris International Inc.PM
Philip Morris International Inc. Goodwill & Intangibles Disclosure
Goodwill and Other Intangible Assets, net:
Goodwill
The movements in goodwill were as follows:
| (in millions) | Europe | (a) | SSEA, CIS & MEA | EA, AU & PMI GTR | Americas | Total | ||||||||||||||
| Balances, December 31, 2023 | $ | 4,563 | $ | 2,877 | $ | 492 | $ | 8,847 | $ | 16,779 | ||||||||||
| Changes due to: | ||||||||||||||||||||
| Acquisitions and divestitures | (65) | 512 | — | — | 447 | |||||||||||||||
| Currency | (368) | (138) | (22) | (98) | (626) | |||||||||||||||
| Balances, December 31, 2024 | 4,130 | 3,251 | 470 | 8,749 | 16,600 | |||||||||||||||
| Changes due to: | ||||||||||||||||||||
| Impairment | (41) | — | — | — | (41) | |||||||||||||||
| Measurement period adjustments | — | (7) | — | — | (7) | |||||||||||||||
| Currency | 690 | (43) | (9) | 74 | 712 | |||||||||||||||
| Balances, December 31, 2025 | $ | 4,779 | $ | 3,201 | $ | 461 | $ | 8,823 | $ | 17,264 | ||||||||||
(a) Europe goodwill balance is net of accumulated impairment losses of $556 million at December 31, 2025, and 2024. These accumulated losses exclude amounts related to businesses which were subsequently sold or reclassified as held-for-sale.
As discussed in Note 1. Background and Basis of Presentation, following the sale of Vectura Group Ltd. on December 31, 2024, we updated our segment reporting in January 2025 by including the Wellness balance in the Europe segment. As a result, the December 31, 2023 and December 31, 2024 goodwill balances for the Europe segment in the table above included the reclassification of the former Wellness segment.
The decrease in goodwill in 2024 was due to currency movements and goodwill allocated to disposal group in relation to Vectura Group' sale, partially offset by the preliminary purchase price allocation of PMI's acquisition in Egypt of United Tobacco Company in the second quarter of 2024. For further details on the acquisition in Egypt and Vectura Group's sale, see Note 3. Acquisitions and Divestitures.
In the second quarter of 2025, PMI finalized the measurement period adjustments related to its acquisition in Egypt of United Tobacco Company (UTC). For further details, see Note 3. Acquisitions and Divestitures.
At December 31, 2025, goodwill primarily reflects PMI’s acquisitions of Swedish Match AB as well as acquisitions in Indonesia, the Philippines, Egypt, Greece, Mexico, and Serbia.
Other Intangible Assets
Details of other intangible assets were as follows:
| December 31, 2025 | December 31, 2024 | |||||||||||||||||||||||||
(in millions) | Weighted-Average Remaining Useful Life | Gross Carrying Amount | Accumulated Amortization | Net | Gross Carrying Amount | Accumulated Amortization | Net | |||||||||||||||||||
| Non-amortizable intangible assets | $ | 4,776 | $ | 4,776 | $ | 4,446 | $ | 4,446 | ||||||||||||||||||
| Amortizable intangible assets: | ||||||||||||||||||||||||||
| Trademarks | 14 years | 2,227 | $ | 984 | 1,243 | 2,134 | $ | 850 | 1,284 | |||||||||||||||||
Reacquired commercialization rights for IQOS in the U.S. | 3 years | 2,777 | 926 | 1,851 | 2,777 | 370 | 2,407 | |||||||||||||||||||
| Developed technology, including patents | 6 years | 358 | 160 | 198 | 320 | 121 | 199 | |||||||||||||||||||
| Customer relationships and other | 10 years | 3,873 | 1,057 | 2,816 | 3,712 | 721 | 2,991 | |||||||||||||||||||
| Total other intangible assets | $ | 14,011 | $ | 3,127 | $ | 10,884 | $ | 13,389 | $ | 2,062 | $ | 11,327 | ||||||||||||||
Changes in the net carrying amount of intangible assets were as follows:
| Changes Due To: | |||||||||||||||||
| (in millions) | December 31, 2023 | Amortization & Impairment | Acquisitions & Divestitures | Currency & Other | December 31, 2024 | ||||||||||||
| Non-amortizable intangible assets | $ | 4,543 | $ | (27) | $ | 211 | $ | (281) | $ | 4,446 | |||||||
| Amortizable intangible assets: | 5,321 | (835) | (187) | 2,582 | 6,881 | ||||||||||||
| Gross book value | 6,884 | (454) | 2,513 | 8,943 | |||||||||||||
| Accumulated amortization | (1,563) | (835) | 267 | 69 | (2,062) | ||||||||||||
| Total Intangibles, net | $ | 9,864 | $ | (862) | $ | 24 | $ | 2,301 | $ | 11,327 | |||||||
| Changes Due To: | |||||||||||||||||
| December 31, 2024 | Amortization & Impairment | Acquisitions & Divestitures | Currency & Other | December 31, 2025 | |||||||||||||
| Non-amortizable intangible assets | $ | 4,446 | $ | — | $ | 25 | $ | 305 | $ | 4,776 | |||||||
| Amortizable intangible assets: | 6,881 | (1,003) | (94) | 324 | 6,108 | ||||||||||||
| Gross book value | 8,943 | (128) | 420 | 9,235 | |||||||||||||
| Accumulated amortization | (2,062) | (1,003) | 34 | (96) | (3,127) | ||||||||||||
| Total Intangibles, net | $ | 11,327 | $ | (1,003) | $ | (69) | $ | 629 | $ | 10,884 | |||||||
Non-amortizable intangible assets substantially consist of the ZYN trademarks and other trademarks related to acquisitions in Indonesia and Mexico, as well as the tobacco manufacturing license associated with PMI's acquisition in Egypt. A pre-tax impairment charge in the first quarter of 2024 of $27 million for the in-process research and development project in the Wellness business was recorded in on PMI's consolidated statements of earnings for the year ended December 31, 2024.
Changes due to acquisitions and divestitures reflect the acquisition in Egypt of United Tobacco Company and the sale of Vectura Group and certain other businesses. For further details, see Note 3. Acquisitions and Divestitures.
Changes in currency and other in 2024 included the classification of $2.8 billion of the IQOS commercialization rights in the U.S. on the acquisition date (May 1, 2024) as Other intangible assets, net (see Note 3. Acquisitions and Divestitures).
Amortization expense on a pre-tax basis for each of the next five years is estimated to be approximately $987 million or less, assuming no additional transactions occur that require the amortization of intangible assets.
Annual impairment review of goodwill and non-amortizable intangible assets
During the second quarter of 2025, PMI completed its annual review of goodwill and non-amortizable intangible assets for potential impairment. As a result of updated financial projections, it was determined that the estimated fair value of a reporting unit included within the Europe segment was lower than its carrying value. Consequently, PMI recorded in the second quarter of 2025 a goodwill impairment charge of $41 million, which represented the entirety of the goodwill recorded in the reporting unit.
Each of PMI's reporting units had fair values substantially in excess of their carrying values. PMI continues to monitor the Wellness reporting unit as any changes in assumptions and estimates, unfavorable clinical trial results, failure to obtain regulatory approvals and authorizations, and other market factors could result in future goodwill and other intangible asset impairments. In addition, there are risks related to PMI’s Russian reporting unit’s assets as the fair value of these assets is difficult to predict due to the current economic, political, regulatory and social conditions as well as the foreign currency volatility. As of December 31, 2025, our Russian operations had approximately $4.8 billion in total assets, excluding intercompany balances, of which approximately $2.3 billion consisted of cash and cash equivalents held mostly in local currency (Russian rubles). Additionally, we hold a 23% equity interest in JSC TK Megapolis, PMI's distributor in Russia. For further details, see Note 5. Related Parties – Equity Investments and Other.
During the second quarter of 2024, PMI completed its annual review of goodwill and non-amortizable intangible assets for potential impairment. As a result of this review, no impairment charges were required.
During the second quarter of 2023, as a result of the completion of PMI's annual review of goodwill and non-amortizable intangible assets for potential impairment, it was determined that the estimated fair value of the Wellness reporting unit (previously referred to as Wellness & Healthcare reporting unit) was lower than its carrying value. Consequently, PMI recorded a goodwill impairment charge of $665 million in the consolidated statements of earnings for the year ended December 31, 2023, reflecting the impact of reduced estimated future cash flows, which were primarily attributable to unfavorable clinical trial results that became available in June 2023 for an inhalable aspirin product being developed by the Wellness business. Additionally, as a result of the impairment test of non-amortizable intangible assets, PMI recorded a pre-tax impairment charge of $15 million for an in-process research and development project related to one of PMI's 2021 acquisitions. This pre-tax impairment charge of $15 million was recorded within marketing, administration and research costs in the consolidated statements of earnings for the year ended December 31, 2023.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 6, 2026 | Showing above |
| 2024 | Feb 6, 2025 | |
| 2023 | Feb 8, 2024 | |
| 2022 | Feb 10, 2023 | |
| 2021 | Feb 11, 2022 | |
| 2020 | Feb 9, 2021 | |
| 2019 | Feb 7, 2020 | |
| 2018 | Feb 7, 2019 | |
| 2017 | Feb 13, 2018 | |
| 2016 | Feb 14, 2017 | |
| 2015 | Feb 17, 2016 | |
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.