Exit and Implementation Costs |
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| Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Exit and Implementation Costs | Exit and Implementation Costs For the three months ended March 31, 2025, we recorded pre-tax implementation costs of $15 million in marketing, administration and research costs in our condensed consolidated statements of earnings, of which $13 million was recorded in our smokeable products segment and $2 million was recorded in our oral tobacco products segment. For the three months ended March 31, 2025, we had no exit costs. There were no exit or implementation costs for the three months ended March 31, 2024. In October 2024, we announced a multi-phase Optimize & Accelerate initiative (“Initiative”) designed to modernize our ways of working. Through the Initiative, we plan to increase our organization’s speed, efficiency and effectiveness by centralizing work, outsourcing certain transactional tasks and streamlining, automating and standardizing processes. We expect the design and detailed plans for all phases of the Initiative to be substantially complete in early 2026. We estimate total pre-tax charges for the Initiative’s initial phases of approximately $100 million to $125 million. As of March 31, 2025, total pre-tax charges since the inception of the Initiative were $83 million, consisting of employee separation cost of $35 million and implementation costs of $48 million. We expect to record the majority of the remaining costs for these initial phases in the second quarter of 2025. All of these charges result in cash expenditures and consist of severance payments associated with employee separations, implementation costs for new technology and business advisory services and other costs. Employee separation costs are recorded when probable and reasonably estimable. As we further develop and finalize detailed plans for the additional phases of the Initiative, we will update estimated pre-tax charges for the Initiative. As of March 31, 2025, total cash payments since the inception of the Initiative were $29 million, consisting of $1 million for exit costs and $28 million for implementation costs. A summary of the Initiative’s charges and cash paid for exit and implementation costs are as follows:
(1) Restructuring liabilities, all of which were severance liabilities.
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