v3.26.1
Segment Reporting:
 6 Months Ended
Jun. 30, 2026
Segment Reporting [Abstract]  
Segment Reporting: 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.

Effective January 1, 2026, PMI reorganized its segments to reflect the manner in which the Chief Executive Officer, who is the chief operating decision maker (“CODM”), manages the business and reviews the results of its operations. Based on changes to PMI’s organizational structure, including restructuring of roles and responsibilities of the executive management layer reporting directly to the CODM as of January 2026, PMI’s reportable segments are organized by product groupings and geographical region as follows: International Smoke-Free, International Combustibles and the U.S. The results of PMI’s Wellness unit, Aspeya, are included within the U.S. reportable segment.

In conjunction with the organizational changes discussed above, the primary profitability measure based on which the CODM evaluates performance of and allocates resources to the reportable segments has changed from regional operating income to segment gross profit. Segment net revenues and segment gross profit are the primary financial measures used by the CODM to review short-term and long-term trends, forecasts, and budget-to-actual variances in order to assess the performance of PMI’s reportable segments and to allocate resources in response to changing market conditions and organizational priorities.

Marketing, administration and research costs, including restructuring charges, are not allocated to segments to determine the primary measure of segment profitability. Additionally, interest expense, net, corporate expenses and other, and provision for
income taxes are centrally managed and, accordingly, such items are not presented by segment since they are excluded from the measures 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 5. Goodwill and Other Intangible Assets, net. The accounting policies of the segments are the same as those described in Item 8, Note 2. Summary of Significant Accounting Policies of PMI's Annual Report on Form 10-K for the year ended December 31, 2025.

Net revenues, cost of sales and gross profit by segment were as follows:

(in millions) International Smoke-FreeInternational CombustiblesU.S.Total
For the Six Months Ended June 30, 2026
Net revenues$7,713 $12,147 $1,478 $21,338 
Cost of sales(2,313)(3,917)(544)(6,774)
Gross profit$5,400 $8,229 $935 $14,564 
For the Six Months Ended June 30, 2025
Net revenues$6,471 $11,209 $1,762 $19,441 
Cost of sales(2,066)(3,774)(466)(6,305)
Gross profit$4,405 $7,435 $1,296 $13,136 

(in millions) International Smoke-FreeInternational CombustiblesU.S.Total
For the Three Months Ended June 30, 2026
Net revenues$3,877 $6,459 $856 $11,192 
Cost of sales(1,161)(2,071)(301)(3,533)
Gross profit$2,716 $4,388 $555 $7,659 
For the Three Months Ended June 30, 2025
Net revenues$3,395 $5,883 $862 $10,140 
Cost of sales(1,076)(1,947)(252)(3,274)
Gross profit$2,319 $3,936 $611 $6,866 
Note: Amounts may not foot due to rounding

PMI disaggregates its net revenues from contracts with customers by product category for each reportable segment. PMI believes this best depicts how the nature, amount, timing and uncertainty of its revenue and cash flows are affected by economic factors.
PMI's net revenues by product category were as follows:

(in millions)For the Six Months Ended June 30,For the Three Months Ended June 30,
2026202520262025
Smoke-free:
International Smoke-Free$7,713 $6,471 $3,877 $3,395 
U.S.
1,311 1,584 768 766 
of which, Wellness118 109 56 57 
Total Smoke-free9,024 8,055 4,645 4,161 
Combustible tobacco:
International Combustibles12,147 11,209 6,459 5,883 
U.S.
167 178 88 96 
Total Combustible tobacco 12,314 11,386 6,547 5,979 
Total PMI net revenues$21,338 $19,441 $11,192 $10,140 
Note: Amounts may not foot due to rounding

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 products, primarily associated with oral and intra-oral delivery systems.
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.

Other segment data were as follows:
(in millions)
For the Six Months Ended June 30,For the Three Months Ended June 30,
2026202520262025
Depreciation and amortization expense:
International Smoke-Free$180 $160 $90 $82 
International Combustibles136 143 69 72 
U.S.54 45 27 22 
Total depreciation and amortization expense by segment370 348 186 176 
Other(1)
653 622 327 314 
Total depreciation and amortization expense
$1,023 $970 $513 $490 
(1) Included in marketing, administration and research costs, and corporate expenses and other in PMI's condensed consolidated statements of earnings