Philip Morris International Inc.PM
Philip Morris International Inc. Segments Disclosure
Segment Reporting:
PMI’s subsidiaries and affiliates are primarily engaged in the manufacture and sale of cigarettes and smoke-free products, including heat-not-burn, e-vapor and oral nicotine products. PMI's segments are organized by geographic region and managed by segment managers who are responsible for the operating and financial results of the regions inclusive of combustible tobacco and smoke-free categories sold in the region. As discussed in Note 1. Background and Basis of Presentation, in January 2025, PMI updated its segment reporting by including the ongoing Wellness results into the Europe segment. The four geographical segments are as follows: Europe Region; South and Southeast Asia, Commonwealth of Independent States, Middle East and Africa Region ("SSEA, CIS & MEA"); East Asia, Australia & PMI Global Travel Retail (“EA, AU & PMI GTR”); and Americas Region.
The Group CEO PMI, who is the chief operating decision maker ("CODM") evaluates geographical segment performance based on the regional operating income, which includes results from all product categories sold in each region. The CODM reviews short-term and long-term trends, forecasts, and budget-to-actual variances to assess geographical segment performance and to allocate resources. Interest expense, net, and provision for income taxes are centrally managed and, accordingly, such items are not presented by segment since they are excluded from the measure of segment profitability reviewed by management. Information about total assets and capital expenditures by segment is not disclosed because such information is not reported to or used by PMI’s CODM. Segment goodwill and other intangible assets, net, are disclosed in Note 4. Goodwill and Other Intangible Assets, net. The accounting policies of the segments are the same as those described in Note 2. Summary of Significant Accounting Policies.
PMI disaggregates its net revenues from contracts with customers by product category for each of PMI's geographical segments. PMI believes this best depicts how the nature, amount, timing and uncertainty of its revenue and cash flows are affected by economic factors.
Net revenues, significant expenses, and operating income by segment were as follows:
| (in millions) | Europe | SSEA, CIS & MEA | EA, AU & PMI GTR | Americas | Total | ||||||||||||
For the Year Ended December 31, 2025 | |||||||||||||||||
| Net revenues | $ | 17,111 | $ | 12,051 | $ | 6,632 | $ | 4,854 | $ | 40,648 | |||||||
| Less: | |||||||||||||||||
| Cost of sales | 4,501 | 5,190 | 1,961 | 1,714 | 13,366 | ||||||||||||
| Marketing, administration and research costs | 5,404 | 2,765 | 1,545 | 2,635 | 12,349 | ||||||||||||
| Impairment of goodwill | 41 | — | — | — | 41 | ||||||||||||
| Operating income | $ | 7,165 | $ | 4,096 | $ | 3,126 | $ | 505 | $ | 14,892 | |||||||
For the Year Ended December 31, 2024 | |||||||||||||||||
| Net revenues | $ | 15,690 | $ | 11,261 | $ | 6,393 | $ | 4,534 | $ | 37,878 | |||||||
| Less: | |||||||||||||||||
| Cost of sales | 4,474 | 5,313 | 2,011 | 1,531 | 13,329 | ||||||||||||
| Marketing, administration and research costs | 4,669 | 2,519 | 1,504 | 2,455 | 11,147 | ||||||||||||
| Operating income | $ | 6,547 | $ | 3,429 | $ | 2,878 | $ | 548 | $ | 13,402 | |||||||
For the Year Ended December 31, 2023 | |||||||||||||||||
| Net revenues | $ | 14,537 | $ | 10,629 | $ | 6,201 | $ | 3,807 | $ | 35,174 | |||||||
| Less: | |||||||||||||||||
| Cost of sales | 4,321 | 5,109 | 1,978 | 1,485 | 12,893 | ||||||||||||
| Marketing, administration and research costs | 4,252 | 2,384 | 1,684 | 1,740 | 10,060 | ||||||||||||
| Impairment of goodwill | 665 | — | — | — | 665 | ||||||||||||
| Operating income | $ | 5,299 | $ | 3,136 | $ | 2,539 | $ | 582 | $ | 11,556 | |||||||
Total net revenues attributable to customers located in Japan, PMI's largest market in terms of net revenues, were $4.2 billion, $4.1 billion and $3.9 billion in 2025, 2024 and 2023, respectively. PMI had one customer in the EA, AU & PMI GTR segment that accounted for 10%, 11% and 11% of PMI’s consolidated net revenues, and one customer in the Europe segment that accounted for 12%, 11% and 12% of PMI’s consolidated net revenues in 2025, 2024 and 2023, respectively.
PMI's net revenues by product category were as follows:
| For the Years Ended December 31, | |||||||||||||||||
| (in millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Combustible tobacco: | |||||||||||||||||
| Europe | $ | 8,984 | $ | 8,599 | $ | 8,037 | |||||||||||
SSEA, CIS & MEA | 10,233 | 9,848 | 9,321 | ||||||||||||||
EA, AU & PMI GTR | 2,415 | 2,516 | 2,676 | ||||||||||||||
| Americas | 2,163 | 2,255 | 2,299 | ||||||||||||||
| Total combustible tobacco | 23,794 | 23,218 | 22,334 | ||||||||||||||
| Smoke-free: | |||||||||||||||||
| Europe | 8,127 | 7,091 | 6,500 | ||||||||||||||
| of which, Wellness | 238 | 333 | 306 | ||||||||||||||
SSEA, CIS & MEA | 1,818 | 1,413 | 1,308 | ||||||||||||||
EA, AU & PMI GTR | 4,217 | 3,877 | 3,525 | ||||||||||||||
| Americas | 2,691 | 2,279 | 1,508 | ||||||||||||||
| Total Smoke-free | 16,854 | 14,660 | 12,840 | ||||||||||||||
| Total PMI net revenues | $ | 40,648 | $ | 37,878 | $ | 35,174 | |||||||||||
Note: Sum of product categories or Regions might not foot to total PMI due to rounding.
Items affecting the comparability of results from operations were as follows:
•Restructuring charges - See Note 18. Restructuring Activities for details of the $241 million, $180 million and $109 million pre-tax charges for the year ended December 31, 2025, 2024 and 2023, respectively, as well as a breakdown of these costs by segment.
•Impairment of goodwill and other intangibles – For the year ended December 31, 2025, PMI recorded a goodwill impairment charge of $41 million that was included in the Europe segment. For the year ended December 31, 2023, PMI recorded $680 million of goodwill and non-amortizable intangible assets impairment charges that was included in the Europe segment. For further details, see Note 4. Goodwill and Other Intangible Assets, net.
•Germany excise tax classification litigation charge – In August 2024, the German Main Custom Office (“MCO”) notified Philip Morris (Germany) GmbH (“PM Germany”) of its decision to classify TEREA consumables as a cigarette for excise tax purposes with the associated tax assessment totaling EUR 151 million (approximately $176 million) covering the period of February 15, 2023, through August 1, 2024. In April 2025, PM Germany paid the outstanding amount, which was recorded in Other assets on the consolidated balance sheets, while it challenged the MCO’s decision in court. On September 17, 2025, PM Germany filed a request to withdraw the proceedings. As a result, the tax assessment amount of $176 million was recorded in marketing, administration and research costs in the consolidated statements of earnings for the year ended December 31, 2025, and was included in the Europe segment results.
•Loss on expected sale of consumer accessories and other businesses – See Note 3. Acquisitions and Divestitures for details of the pre-tax loss of $94 million recorded in the Europe segment for the year ended year ended December 31, 2025.
•Egypt sales tax charge – In the third quarter of 2024, following a ruling issued by the Higher Administrative Court in Egypt and subsequent evaluation of available remedies, PMI concluded that an adverse outcome was probable and recorded a pre-tax charge of $45 million in relation to tax assessments for general sales tax deducted on imported cutfiller for the years 2014 to 2016. This pre-tax charge was recorded in marketing, administration and research costs in the consolidated statement of earnings for the year ended December 31, 2024, and was included in the SSEA, CIS & MEA segment results.
•Loss on sale of Vectura Group – In September 2024, PMI announced the execution of a definitive agreement to sell Vectura to Molex Asia Holdings Ltd. On December 31, 2024, we completed the sale. The sale resulted in a pre-tax loss of $199 million. This pre-tax loss was recorded in marketing, administration and research costs in the consolidated statement of earnings for the year ended December 31, 2024, and was included in the Europe segment results. For further details, see Note 3. Acquisitions and Divestitures.
•Termination of distribution arrangement in the Middle East – In the first quarter of 2023, PMI recorded a pre-tax charge of $80 million following the termination of a distribution arrangement in the Middle East. This pre-tax charge was recorded as a
reduction of net revenues in the consolidated statements of earnings, and was included in the SSEA, CIS & MEA segment results for the year ended December 31, 2023.
•South Korea indirect tax charge – On July 13, 2023, PMI's South Korean subsidiary, PM Korea, received an adverse ruling from the Supreme Court of South Korea related to cases alleging underpayment of excise taxes in connection with a 2015 excise tax increase and subsequent audit by the South Korean Board of Audit and Inspection. The Supreme Court ruling reversed previous decisions that were in PM Korea’s favor at the trial and appellate levels. As a result of the ruling, we concluded that an adverse outcome was probable. Consequently, we recorded a non-cash pre-tax charge of $204 million in marketing, administration and research costs in the consolidated statements of earning, reflecting the full amount previously paid by PM Korea, which was included in the EA, AU & PMI GTR segment for the year ended December 31, 2023.
•Termination of agreement with Foundation for a Smoke-Free World – On September 29, 2023, PMI and the Foundation for a Smoke-Free World (the "Foundation") entered into the Final Grant Agreement and Termination of the Second Amended and Restated Pledge Agreement ("Agreement"). Under the terms of the agreement, PMI paid $140 million in the third quarter of 2023 in return for the termination of the pledge agreement between the parties. As a result, in the third quarter of 2023, PMI recorded a pre-tax charge of $140 million commensurate with the early termination of the pledge agreement. The pre-tax charge was recorded in marketing, administration and research costs in the consolidated statements of earnings for the year ended December 31, 2023 and was included in the operating results of the following segments: Europe ($60 million); SSEA, CIS & MEA ($41 million); EA, AU & PMI GTR ($24 million); and Americas ($15 million).
•Charges related to the war in Ukraine – For the year ended December 31, 2023, PMI recorded pre-tax charges of $53 million in the Europe segment related to the war in Ukraine.
Net revenues related to combustible tobacco refer to the operating revenues generated from the sale of these products, including shipping and handling charges billed to customers, net of sales and promotion incentives, and excise taxes. These net revenue amounts consist of the sale of PMI's cigarettes and other tobacco products that are combusted. Other tobacco products primarily include roll-your-own and make-your-own cigarettes, pipe tobacco, cigars and cigarillos and do not include smoke-free products.
Net revenues related to smoke-free, excluding wellness, refer to the operating revenues generated from the sale of these products, including shipping and handling charges billed to customers, net of sales and promotion incentives, and excise taxes, if applicable. These net revenue amounts consist of the sale of PMI's products that are not combustible tobacco products, such as heat-not-burn, e-vapor, and oral products, as well as consumer accessories. Net revenues related to wellness refer to the operating revenues generated from the sale of product, primarily associated with oral and intra-oral delivery systems.
Other segment data were as follows:
| For the Years Ended December 31, | |||||||||||||||||
(in millions) | 2025 | 2024 | 2023 | ||||||||||||||
Depreciation and amortization expense: | |||||||||||||||||
| Europe | $ | 558 | $ | 562 | $ | 563 | |||||||||||
| SSEA, CIS & MEA | 294 | 304 | 304 | ||||||||||||||
| EA, AU & PMI GTR | 194 | 173 | 144 | ||||||||||||||
| Americas | 950 | 748 | 387 | ||||||||||||||
Total depreciation and amortization expense | $ | 1,996 | $ | 1,787 | $ | 1,398 | |||||||||||
PMI’s total property, plant and equipment, net and other assets by geographic area were:
| At December 31, | |||||||||||||||||
(in millions) | 2025 | 2024 | 2023 | ||||||||||||||
Long-lived assets: | |||||||||||||||||
| Europe | $ | 6,619 | $ | 5,540 | $ | 5,697 | |||||||||||
| SSEA, CIS & MEA | 2,209 | 2,160 | 2,197 | ||||||||||||||
| East Asia and Australia | 405 | 378 | 481 | ||||||||||||||
| Americas | 1,997 | 1,559 | 1,310 | ||||||||||||||
| Total long-lived assets | 11,230 | 9,637 | 9,685 | ||||||||||||||
| Altria Group, Inc. agreement | — | — | 2,777 | ||||||||||||||
| Financial instruments | 1,306 | 456 | 701 | ||||||||||||||
Total property, plant and equipment, net and Other assets | $ | 12,536 | $ | 10,093 | $ | 13,163 | |||||||||||
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 Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.