Exit and Implementation Costs

6 Months Ended

Jun. 30, 2025

Restructuring and Related Activities [Abstract]

Pre-tax implementation and exit costs consisted of the following:


	For the Six Months Ended June 30, 2025			For the Three Months Ended June 30, 2025
(in millions)	Exit Costs		Implementation Costs (1)	Exit Costs		Implementation Costs (1)

Smokeable products segment	$	1		$	25		$	1	$	12
Oral tobacco products segment	—			4			—		2

Total	$	1		$	29		$	1	$	14

(1) Recorded in marketing, administration and research costs in our condensed consolidated statement of earnings.

There were no exit or implementation costs for the six months ended June 30, 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 currently planned phases to be approximately $125 million. As of June 30, 2025, total pre-tax charges since the inception of the Initiative were $98 million, consisting of employee separation cost of $36 million and implementation costs of $62 million. 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 June 30, 2025, total cash payments since the inception of the Initiative were $49 million, consisting of $5 million for exit costs and $44 million for implementation costs.

A summary of the Initiative’s charges and cash paid for exit and implementation costs is as follows:


(in millions)	Exit Costs			Implementation Costs		Total
Balances at December 31, 2023	$	—		$	—	$	—
Charges	35			33		68
Cash paid	—			(11)		(11)
Balances at December 31, 2024	35			22		57
Charges	1			29		30
Cash paid	(5)			(33)		(38)
Balances at June 30, 2025	$	31	(1)	$	18	$	49

(1) Restructuring liabilities, all of which were severance liabilities.