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Segment Reporting
 12 Months Ended
Dec. 31, 2021
Segment Reporting [Abstract]  
Segment Reporting
Segment Reporting:

PMI’s subsidiaries and affiliates are primarily engaged in the manufacture and sale of cigarettes and RRPs, including heat-not-burn, vapor and oral nicotine products, in markets outside of the United States of America. PMI's segments are generally organized by geographic region and managed by segment managers who are responsible for the operating and financial results of the regions inclusive of combustible and reduced-risk product categories sold in the region. PMI currently has six geographical segments: the European Union; Eastern Europe; Middle East & Africa; South & Southeast Asia; East Asia & Australia; and Americas; as well as an Other category. Other consists of the 2021 acquisitions of Fertin Pharma A/S, Vectura Group plc. and OtiTopic, Inc. For further details on these acquisitions, see Note 6. Acquisitions. PMI records net revenues and operating income to its geographical segments based upon the geographic area in which the customer resides. Revenues from shipments of Platform 1 devices, heated tobacco units and accessories to Altria Group, Inc. for sale under license in the United States are included in net revenues of the Americas segment.

PMI’s chief operating decision maker evaluates geographical segment performance and allocates resources based on regional operating income, which includes results from all product categories sold in each region. Business operations in the Other category are managed and evaluated separately. 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 by segment is not disclosed because such information is not reported to or used by PMI’s chief operating decision maker. Segment goodwill and other intangible assets, net, are disclosed in Note 3. 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 revenue from contracts with customers by both geographic location and product category for each of PMI's six geographical segments. For the 2021 acquisitions discussed above, net revenues from contracts with customers are included in the Other category. 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 by geographic segment and Other category were as follows:
For the Years Ended December 31,
(in millions)202120202019
Net revenues:
European Union$12,275 $10,702 $9,817 
Eastern Europe3,544 3,378 3,282 
Middle East & Africa3,293 3,088 4,042 
South & Southeast Asia4,396 4,396 5,094 
East Asia & Australia5,953 5,429 5,364 
Americas1,843 1,701 2,206 
Other101 — — 
Net revenues$31,405 $28,694 $29,805 

Total net revenues attributable to customers located in Japan, PMI's largest market in terms of net revenues, were $4.6 billion, $4.1 billion and $3.9 billion in 2021, 2020 and 2019, respectively. PMI had one customer in the East Asia & Australia segment that accounted for 15%, 14% and 13% of PMI’s consolidated net revenues, and one customer in the European Union segment that accounted for 13%, 11% and 10% of PMI’s consolidated net revenues in 2021, 2020 and 2019, respectively.
PMI's net revenues by product category were as follows:
For the Years Ended December 31,
(in millions)202120202019
Combustible products:
European Union$8,211 $8,053 $8,093 
Eastern Europe2,240 2,250 2,438 
Middle East & Africa3,148 3,031 3,721 
South & Southeast Asia4,385 4,395 5,094 
East Asia & Australia2,414 2,468 2,693 
Americas1,790 1,670 2,179 
Total combustible products$22,190 $21,867 $24,218 
Reduced-risk products:
European Union$4,064 $2,649 $1,724 
Eastern Europe1,304 1,128 844 
Middle East & Africa145 57 321 
South & Southeast Asia11 1 — 
East Asia & Australia3,539 2,961 2,671 
Americas53 31 27 
Total reduced-risk products$9,115 $6,827 $5,587 
Other:
Other$101 $— $— 
Total PMI net revenues$31,405 $28,694 $29,805 
Note: Sum of product categories or Regions might not foot to total PMI due to roundings.

Net revenues related to combustible products 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 combined. Other tobacco products primarily include roll-your-own and make-your-own cigarettes, pipe tobacco, cigars and cigarillos and do not include reduced-risk products.

Net revenues related to reduced-risk products 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 heated tobacco units, heat-not-burn devices and related accessories, and other nicotine-containing products, which primarily include PMI's e-vapor and oral nicotine products.

Net revenues in the Other category primarily consist of operating revenues generated from the sale of inhaled therapeutics, and oral and intra-oral delivery systems resulting from the third quarter 2021 acquisitions of Fertin Pharma A/S, Vectura Group plc. and OtiTopic, Inc.
Operating income (loss) by geographic segment and Other category were as follows:
For the Years Ended December 31,
(in millions)
202120202019
Operating income (loss):
European Union$6,119 $5,098 $3,970 
Eastern Europe1,213 871 547 
Middle East & Africa1,146 1,026 1,684 
South & Southeast Asia1,506 1,709 2,163 
East Asia & Australia2,556 2,400 1,932 
Americas487 564 235 
Other(52)— — 
Operating income
$12,975 $11,668 $10,531 


Items affecting the comparability of results from operations were as follows:

•Asset impairment and exit costs - See Note 19. Asset Impairment and Exit Costs for details of the $216 million, $149 million and $422 million pre-tax charges for the year ended December 31, 2021, 2020 and 2019, respectively, as well as a breakdown of these costs by segment.
•Saudi Arabia customs assessments - See Note 17. Contingencies for the details of the $246 million reduction in net revenues of combustible products included in the Middle East & Africa segment for the year ended December 31, 2021.
•Asset acquisition cost - See Note 6. Acquisitions for the details of the $51 million pre-tax charge associated with the asset acquisition of OtiTopic, Inc. included in Other within the operating income table above for the year ended December 31, 2021.
•Russia excise and VAT audit charge - See Note 17. Contingencies for details of the $374 million pre-tax charge included in the Eastern Europe segment for the year ended December 31, 2019.
•Canadian tobacco litigation-related expense - See Note 17. Contingencies and Note 20. Deconsolidation of RBH for details of the $194 million pre-tax charge included in the Americas segment for the year ended December 31, 2019.
•Loss on deconsolidation of RBH - See Note 20. Deconsolidation of RBH for details of the $239 million loss included in the Americas segment for the year ended December 31, 2019.
•Brazil indirect tax credit - Following a final and enforceable decision by the highest court in Brazil in October 2020, PMI recorded a gain of $119 million for tax credits representing overpayments of indirect taxes for the period from March 2012 through December 2019; these tax credits were applied to tax liabilities in Brazil during 2021. This amount was included as a reduction in marketing, administration and research costs in the consolidated statements of earnings for the year ended December 31, 2020 and was included in the operating income of the Americas segment. An additional amount of overpaid indirect taxes of approximately $90 million is dependent on a potential tax authority challenge.


Other segment data were as follows:
For the Years Ended December 31,
(in millions)
202120202019
Depreciation expense:
European Union$307 $266 $254 
Eastern Europe131 173 147 
Middle East & Africa89 75 90 
South & Southeast Asia143 137 142 
East Asia & Australia154 188 185 
Americas62 69 80 
Other16 — — 
Total depreciation expense
$902 $908 $898 
For the Years Ended December 31,
(in millions)
202120202019
Capital expenditures:
European Union$470 $384 $466 
Eastern Europe71 88 132 
Middle East & Africa37 22 35 
South & Southeast Asia52 57 100 
East Asia & Australia36 13 67 
Americas54 38 52 
Other28 — — 
Total capital expenditures
$748 $602 $852 

At December 31,
(in millions)
202120202019
Long-lived assets:
European Union$4,504 $4,500 $4,275 
Eastern Europe635 668 774 
Middle East & Africa289 375 369 
South & Southeast Asia1,386 1,348 1,361 
East Asia & Australia740 807 829 
Americas661 784 680 
Other292 — — 
Total long-lived assets8,507 8,482 8,288 
Financial instruments210 650 314 
Total property, plant and equipment, net and Other assets
$8,717 $9,132 $8,602 
Long-lived assets consist of non-current assets other than goodwill; other intangible assets, net; deferred tax assets, equity investments, and financial instruments. PMI's largest markets in terms of long-lived assets are Switzerland, Italy and Indonesia. Total long-lived assets located in Switzerland, which is reflected in the European Union segment above, were $1.3 billion, $1.3 billion and $1.1 billion at December 31, 2021, 2020 and 2019, respectively. Total long-lived assets located in Italy, which is reflected in the European Union segment above, were $0.9 billion, $1.1 billion and $1.1 billion at December 31, 2021, 2020 and 2019, respectively. Total long-lived assets located in Indonesia, which is reflected in the South & Southeast Asia segment above, were $0.9 billion, $0.7 billion and $0.8 billion at December 31, 2021, 2020 and 2019, respectively.