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Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One) 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2022
OR 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission File Number 001-33708
Philip Morris International Inc.
(Exact name of registrant as specified in its charter)
Virginia13-3435103
(State or other jurisdiction of
    incorporation or organization)
(I.R.S. Employer
    Identification No.)
120 Park AvenueNew YorkNew York10017
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code(917)663-2000
Former name, former address and former fiscal year, if changed since last report

Securities registered pursuant to Section 12(b) of the Act:
Title of each class                    Trading Symbol(s)Name of each exchange on which registered
Common Stock, no par valuePMNew York Stock Exchange
2.375% Notes due 2022PM22BNew York Stock Exchange
2.500% Notes due 2022PM22New York Stock Exchange
2.500% Notes due 2022PM22CNew York Stock Exchange
2.625% Notes due 2023PM23New York Stock Exchange
2.125% Notes due 2023PM23BNew York Stock Exchange
3.600% Notes due 2023PM23ANew York Stock Exchange
2.875% Notes due 2024PM24New York Stock Exchange
2.875% Notes due 2024PM24CNew York Stock Exchange
0.625% Notes due 2024PM24BNew York Stock Exchange
3.250% Notes due 2024PM24ANew York Stock Exchange
2.750% Notes due 2025PM25New York Stock Exchange
3.375% Notes due 2025PM25ANew York Stock Exchange
2.750% Notes due 2026PM26ANew York Stock Exchange
Title of each class                    Trading Symbol(s)Name of each exchange on which registered
2.875% Notes due 2026PM26New York Stock Exchange
0.125% Notes due 2026PM26BNew York Stock Exchange
3.125% Notes due 2027PM27New York Stock Exchange
3.125% Notes due 2028PM28New York Stock Exchange
2.875% Notes due 2029PM29New York Stock Exchange
3.375% Notes due 2029PM29ANew York Stock Exchange
0.800% Notes due 2031PM31New York Stock Exchange
3.125% Notes due 2033PM33New York Stock Exchange
2.000% Notes due 2036PM36New York Stock Exchange
1.875% Notes due 2037PM37ANew York Stock Exchange
6.375% Notes due 2038PM38New York Stock Exchange
1.450% Notes due 2039PM39New York Stock Exchange
4.375% Notes due 2041PM41New York Stock Exchange
4.500% Notes due 2042PM42New York Stock Exchange
3.875% Notes due 2042PM42ANew York Stock Exchange
4.125% Notes due 2043PM43New York Stock Exchange
4.875% Notes due 2043PM43ANew York Stock Exchange
4.250% Notes due 2044PM44New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  þ        No  ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  þ        No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer    þ                        Accelerated filer              
Non-accelerated filer                             Smaller reporting company    
                                    Emerging growth company    
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  þ
At July 22, 2022, there were 1,550,163,328 shares outstanding of the registrant’s common stock, no par value per share.
1

Table of Contents

PHILIP MORRIS INTERNATIONAL INC.
TABLE OF CONTENTS
 
  Page No.
PART I -
Item 1.
Condensed Consolidated Statements of Earnings for the
Six Months Ended June 30, 2022 and 2021
Three Months Ended June 30, 2022 and 2021
Condensed Consolidated Statements of Comprehensive Earnings for the
Six Months Ended June 30, 2022 and 2021
Three Months Ended June 30, 2022 and 2021
Condensed Consolidated Balance Sheets at
June 30, 2022 and December 31, 2021
78
Condensed Consolidated Statements of Cash Flows for the
Six Months Ended June 30, 2022 and 2021
9 – 10
Condensed Consolidated Statements of Stockholders’ (Deficit) Equity for the
Six Months Ended June 30, 2022 and 2021
Three Months Ended June 30, 2022 and 2021
1350
Item 2.
51113
Item 4.
PART II -
Item 1.
Item 1A.
Item 2.
Item 6.

In this report, “PMI,” “we,” “us” and “our” refer to Philip Morris International Inc. and its subsidiaries.

Trademarks and service marks in this report are the registered property of, or licensed by, the subsidiaries of Philip Morris International Inc. and are italicized.
2

Table of Contents

PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
Philip Morris International Inc. and Subsidiaries
Condensed Consolidated Statements of Earnings
(in millions of dollars, except per share data)
(Unaudited)
 For the Six Months Ended June 30,
 20222021
Revenues including excise taxes$39,750 $39,776 
Excise taxes on products24,172 24,597 
Net revenues (Note 10)15,578 15,179 
Cost of sales (Note 3)5,256 4,627 
Gross profit10,322 10,552 
Marketing, administration and research costs (Notes 3 & 17)3,894 3,942 
Amortization of intangibles 74 37 
Operating income6,354 6,573 
Interest expense, net280 328 
Pension and other employee benefit costs (Note 5)9 55 
Earnings before income taxes6,065 6,190 
Provision for income taxes1,213 1,343 
Equity investments and securities (income)/loss, net41 (46)
Net earnings$4,811 $4,893 
Net earnings attributable to noncontrolling interests247 303 
Net earnings attributable to PMI$4,564 $4,590 

Per share data (Note 8):
Basic earnings per share$2.94 $2.94 
Diluted earnings per share$2.93 $2.93 










See notes to condensed consolidated financial statements.


3

Table of Contents


Philip Morris International Inc. and Subsidiaries
Condensed Consolidated Statements of Earnings
(in millions of dollars, except per share data)
(Unaudited)
 For the Three Months Ended June 30,
 20222021
Revenues including excise taxes$20,409 $20,421 
Excise taxes on products12,577 12,827 
Net revenues (Note 10)7,832 7,594 
Cost of sales (Note 3)2,648 2,353 
Gross profit5,184 5,241 
Marketing, administration and research costs (Notes 3 & 17)2,092 2,093 
Amortization of intangibles 36 19 
Operating income3,056 3,129 
Interest expense, net126 161 
Pension and other employee benefit costs (Note 5)5 27 
Earnings before income taxes2,925 2,941 
Provision for income taxes594 646 
Equity investments and securities (income)/loss, net(15)(3)
Net earnings2,346 2,298 
Net earnings attributable to noncontrolling interests113 126 
Net earnings attributable to PMI$2,233 $2,172 

Per share data (Note 8):
Basic earnings per share$1.44 $1.39 
Diluted earnings per share$1.43 $1.39 






See notes to condensed consolidated financial statements.
4

Table of Contents

Philip Morris International Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Earnings
(in millions of dollars)
(Unaudited)

For the Six Months Ended June 30,
20222021
Net earnings$4,811 $4,893 
Other comprehensive earnings (losses), net of income taxes:
Change in currency translation adjustments:
Unrealized gains (losses), net of income taxes of $(182) in 2022 and $(25) in 2021
219 227 

Change in net loss and prior service cost:
Net gains (losses) and prior service costs, net of income taxes of $36 in 2022 and $(5) in 2021
36 20 
Amortization of net losses, prior service costs and net transition costs, net of income taxes of $(22) in 2022 and $(36) in 2021
110 162 

Change in fair value of derivatives accounted for as hedges:
Gains (losses) recognized, net of income taxes of $(54) in 2022 and $(12) in 2021
301 77 
(Gains) losses transferred to earnings, net of income taxes of $9 in 2022 and $0 in 2021
(55)2 
Total other comprehensive earnings (losses)611 488 
Total comprehensive earnings5,422 5,381 
Less comprehensive earnings attributable to:
Noncontrolling interests324 275 
Comprehensive earnings attributable to PMI$5,098 $5,106 


















See notes to condensed consolidated financial statements.
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Philip Morris International Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Earnings
(in millions of dollars)
(Unaudited)
For the Three Months Ended June 30,
20222021
Net earnings$2,346 $2,298 
Other comprehensive earnings (losses), net of income taxes:
Change in currency translation adjustments:
Unrealized gains (losses), net of income taxes of $(151) in 2022 and $60 in 2021
413 4 

Change in net loss and prior service cost:
Net gains (losses) and prior service costs, net of income taxes of $36 in 2022 and $(5) in 2021
36 20 
Amortization of net losses, prior service costs and net transition costs, net of income taxes of $(9) in 2022 and $(18) in 2021
55 81 

Change in fair value of derivatives accounted for as hedges:
Gains (losses) recognized, net of income taxes of $(34) in 2022 and $2 in 2021
191 1 
(Gains) losses transferred to earnings, net of income taxes of $7 in 2022 and $0 in 2021
(46)(19)
Total other comprehensive earnings (losses)649 87 
Total comprehensive earnings
2,995 2,385 
Less comprehensive earnings attributable to:
Noncontrolling interests45 132 
Comprehensive earnings attributable to PMI$2,950 $2,253 
















See notes to condensed consolidated financial statements.
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Philip Morris International Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in millions of dollars)
(Unaudited)
 
June 30,
2022
December 31,
2021
ASSETS
Cash and cash equivalents$5,036 $4,496 
Trade receivables (less allowances of $36 in 2022 and $70 in 2021)
3,822 3,123 
Other receivables (less allowances of $34 in 2022 and $36 in 2021)
771 817 

Inventories:
Leaf tobacco1,649 1,642 
Other raw materials1,778 1,652 
Finished product4,124 5,426 
7,551 8,720 
Other current assets1,196 561 

Total current assets
18,376 17,717 

Property, plant and equipment, at cost
14,559 14,732 
Less: accumulated depreciation8,594 8,564 
5,965 6,168 
Goodwill (Note 6)6,318 6,680 
Other intangible assets, net (Note 6)2,656 2,818 
Equity investments (Note 14)4,328 4,463 
Deferred income taxes714 895 
Other assets (less allowances of $20 in 2022 and $21 in 2021)
2,603 2,549 
TOTAL ASSETS$40,960 $41,290 









See notes to condensed consolidated financial statements.
Continued
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Philip Morris International Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (Continued)
(in millions of dollars, except share data)
(Unaudited)
 
June 30,
2022
December 31,
2021
LIABILITIES
Short-term borrowings (Note 12)$1,558 $225 
Current portion of long-term debt (Note 12)4,149 2,798 
Accounts payable3,279 3,331 
Accrued liabilities:
Marketing and selling739 811 
Taxes, except income taxes5,261 6,324 
Employment costs911 1,146 
Dividends payable1,958 1,958 
Other1,862 1,637 
Income taxes830 1,025 
Total current liabilities20,547 19,255 

Long-term debt (Note 12)
22,345 24,783 
Deferred income taxes856 726 
Employment costs2,752 2,968 
Income taxes and other liabilities1,720 1,766 
Total liabilities48,220 49,498 

Contingencies (Note 10)

STOCKHOLDERS’ (DEFICIT) EQUITY

Common stock, no par value
   (2,109,316,331 shares issued in 2022 and 2021)
  
Additional paid-in capital2,165 2,225 
Earnings reinvested in the business33,755 33,082 
Accumulated other comprehensive losses(9,043)(9,577)
26,877 25,730 
Less: cost of repurchased stock
   (559,171,010 and 559,146,338 shares in 2022 and 2021, respectively)
35,921 35,836 
Total PMI stockholders’ deficit(9,044)(10,106)
Noncontrolling interests1,784 1,898 
Total stockholders’ deficit(7,260)(8,208)
TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY$40,960 $41,290 





See notes to condensed consolidated financial statements.
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Philip Morris International Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in millions of dollars)
(Unaudited)
 
 For the Six Months Ended June 30,
 20222021
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
Net earnings$4,811 $4,893 
Adjustments to reconcile net earnings to operating cash flows:
Depreciation and amortization540 484 
Deferred income tax (benefit) provision(88)2 
Asset impairment and exit costs, net of cash paid (Note 17)(47)(26)
Cash effects of changes, net of the effects from acquired companies:
Receivables, net(627)(627)
Inventories867 767 
Accounts payable174 (16)
Accrued liabilities and other current assets(869)(940)
Income taxes(424)(459)
Pension plan contributions, net of refunds (Note 5)63 (197)
Other242 184 
Net cash provided by operating activities4,642 4,065 
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
Capital expenditures(478)(307)
Acquisitions, net of acquired cash (Note 2) (27)
Equity investments(20) 
Net investment hedges and other derivatives (Note 7)514 147 
Other(71)59 
Net cash used in investing activities(55)(128)
 















See notes to condensed consolidated financial statements.

Continued
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Philip Morris International Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Continued)
(in millions of dollars)
(Unaudited)
 
 For the Six Months Ended June 30,
 20222021
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
Short-term borrowing activity by original maturity:
    Net issuances (repayments) - maturities of 90 days or less$565 $(108)
    Issuances - maturities longer than 90 days795  
    Repayments - maturities longer than 90 days(15) 
Long-term debt repaid(497)(1,979)
Repurchases of common stock(209) 
Dividends paid(3,897)(3,752)
Payments to noncontrolling interests and Other (Note 2)
(542)(284)
Net cash used in financing activities(3,800)(6,123)
Effect of exchange rate changes on cash, cash equivalents and restricted cash(244)(179)
Cash, cash equivalents and restricted cash (1):
Increase (Decrease)543 (2,365)
Balance at beginning of period4,500 7,285 
Balance at end of period$5,043 $4,920 

(1) The amounts for cash, cash equivalents and restricted cash shown above include restricted cash of $7 million and $5 million as of June 30, 2022 and 2021, respectively, and $4 million and $5 million as of December 31, 2021 and 2020, respectively, which were included in other current assets in the condensed consolidated balance sheets.







See notes to condensed consolidated financial statements.
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Philip Morris International Inc. and Subsidiaries
Condensed Consolidated Statements of Stockholders’ (Deficit) Equity
For the Six Months Ended June 30, 2022 and 2021
(in millions of dollars, except per share amounts)
(Unaudited)
 PMI Stockholders’ (Deficit) Equity  
 Common
Stock
Additional
Paid-in
Capital
Earnings
Reinvested in
the
Business
Accumulated
Other
Comprehensive Losses
Cost of
Repurchased
Stock
Noncontrolling
Interests
Total
Balances, January 1, 2021$ $2,105 $31,638 $(11,181)$(35,129)$1,936 $(10,631)
Net earnings4,590 303 4,893 
Other comprehensive earnings (losses), net of income taxes516 (28)488 
Issuance of stock awards 38 73 111 
Dividends declared ($2.40 per share)
(3,763)(3,763)
Payments to noncontrolling interests(298)(298)
Balances, June 30, 2021$ $2,143 $32,465 $(10,665)$(35,056)$1,913 $(9,200)
Balances, January 1, 2022$ $2,225 $33,082 $(9,577)$(35,836)$1,898 $(8,208)
Net earnings4,564 247 4,811 
Other comprehensive earnings (losses), net of income taxes705 (94)611 
Issuance of stock awards (30)114 84 
Dividends declared ($2.50 per share)
(3,891)(3,891)
Payments to noncontrolling interests(257)(257)
Common stock repurchased(199)(199)
Other (Note 2)(30)(171)(10)(211)
Balances, June 30, 2022$ $2,165 $33,755 $(9,043)$(35,921)$1,784 $(7,260)




See notes to condensed consolidated financial statements.
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Philip Morris International Inc. and Subsidiaries
Condensed Consolidated Statements of Stockholders’ (Deficit) Equity
For the Three Months Ended June 30, 2022 and 2021
(in millions of dollars, except per share amounts)
(Unaudited)
 PMI Stockholders’ (Deficit) Equity  
 Common
Stock
Additional
Paid-in
Capital
Earnings
Reinvested in
the
Business
Accumulated
Other
Comprehensive Losses
Cost of
Repurchased
Stock
Noncontrolling
Interests
Total
Balances, April 1, 2021$ $2,080 $32,178 $(10,746)$(35,060)$1,974 $(9,574)
Net earnings  2,172   126 2,298 
Other comprehensive earnings (losses), net of income taxes   81  6 87 
Issuance of stock awards 63   4  67 
Dividends declared ($1.20 per share)
  (1,885)   (1,885)
Payments to noncontrolling interests     (193)(193)
Balances, June 30, 2021$ $2,143 $32,465 $(10,665)$(35,056)$1,913 $(9,200)
Balances, April 1, 2022$ $2,118 $33,468 $(9,760)$(35,924)$1,895 $(8,203)
Net earnings  2,233   113 2,346 
Other comprehensive earnings (losses), net of income taxes   717  (68)649 
Issuance of stock awards 47   3  50 
Dividends declared ($1.25 per share)
  (1,946)   (1,946)
Payments to noncontrolling interests     (156)(156)
Balances, June 30, 2022$ $2,165 $33,755 $(9,043)$(35,921)$1,784 $(7,260)


See notes to condensed consolidated financial statements.
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Philip Morris International Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)

 
Note 1. Background and Basis of Presentation:

Background

Philip Morris International Inc. is a holding company incorporated in Virginia, U.S.A. (also referred to herein as the U.S., the United States or the United States of America), whose subsidiaries and affiliates and their licensees are primarily engaged in the manufacture and sale of cigarettes and reduced-risk products including heat-not-burn, vapor and oral nicotine products, in markets outside of the United States of America. Throughout these financial statements, the term "PMI" refers to Philip Morris International Inc. and its subsidiaries.

Reduced-risk products ("RRPs") is the term PMI uses to refer to products that present, are likely to present, or have the potential to present less risk of harm to smokers who switch to these products versus continuing smoking. PMI has a range of RRPs in various stages of development, scientific assessment and commercialization.

"Platform 1" is the term PMI uses to refer to PMI’s reduced-risk product that uses a precisely controlled heating device into which a specially designed and proprietary tobacco unit is inserted and heated to generate an aerosol.

Basis of Presentation

The interim condensed consolidated financial statements of PMI are unaudited. These interim condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") and such principles are applied on a consistent basis. It is the opinion of PMI’s management that all adjustments necessary for a fair statement of the interim results presented have been reflected therein. All such adjustments were of a normal recurring nature. Net revenues and net earnings attributable to PMI for any interim period are not necessarily indicative of results that may be expected for the entire year.

In the third quarter of 2021, PMI acquired Fertin Pharma A/S, Vectura Group plc. and OtiTopic, Inc. On March 31, 2022, PMI launched a new Wellness and Healthcare business consolidating these entities, Vectura Fertin Pharma. The operating results of this business are reported in the Wellness and Healthcare segment (formerly the Other category). For further details, see Note 2. Acquisitions and Note 9. Segment Reporting.

Certain prior years' amounts have been reclassified to conform with the current year's presentation. During the first quarter of 2022, one of Fertin Pharma's product lines was moved from the Wellness and Healthcare segment to the European Union segment (reduced-risk product category). For further details, see Note 6. Goodwill and Other Intangible Assets, net. The change did not have a material impact on PMI's consolidated financial position, results of operations or cash flows in any of the periods presented.

These statements should be read in conjunction with the audited consolidated financial statements and related notes, which appear in PMI’s Annual Report on Form 10-K for the year ended December 31, 2021.


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Philip Morris International Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)

Note 2. Acquisitions:

Purchase of Noncontrolling Interests

Turkey – In the first quarter of 2022, PMI acquired the remaining 25% stake of its holding in Philip Morris Tütün Mamulleri Sanayi ve Ticaret A.Ş. (formerly Philsa Philip Morris Sabancı Sigara ve Tütüncülük Sanayi ve Ticaret A.Ş.) and 24.75% stake in Philip Morris Pazarlama ve Satış A.Ş. (formerly Philip Morris SA, Philip Morris Sabancı Pazarlama ve Satış A.Ş.) from its Turkish partners, Sabanci Holding for a total acquisition price including transaction costs and remaining dividend entitlements of approximately $223 million. As a result of this acquisition, PMI now owns 100% of these Turkish subsidiaries. The purchase of the remaining stakes in these holdings resulted in a decrease to PMI's additional paid-in capital of $30 million and an increase to accumulated other comprehensive losses of $171 million primarily following the reclassification of accumulated currency translation losses from noncontrolling interests to PMI’s accumulated other comprehensive losses during the first quarter of 2022.

Business Combinations

AG Snus - On May 6, 2021, PMI acquired 100% of AG Snus Aktieselskab ("AG Snus"), a company based in Denmark, and its Swedish subsidiary Tobacco House of Sweden AB fully owned by AG Snus, which operates in the oral tobacco (i.e. snus) and modern oral (i.e. nicotine pouches) product categories. The purchase price was $28 million in cash, net of cash acquired, with additional contingent payments of up to $10 million, primarily relating to product development and performance targets over a less than two-year period. The operating results of AG Snus are included in the European Union segment, and were not material.

Fertin Pharma – On September 15, 2021, PMI acquired 100% of Fertin Pharma A/S (“Fertin Pharma”), a company based in Denmark. Fertin Pharma is a developer and manufacturer of pharmaceutical and well-being products based on oral and intra-oral delivery systems. The acquisition was funded with existing cash. The total consideration of $821 million (DKK 5.2 billion) included cash of $580 million and the payment of $241 million related to the settlement of Fertin Pharma’s indebtedness. The purchase price of $821 million was preliminarily allocated to cash ($24 million), current assets including receivables and inventories ($69 million), non-current assets including property, plant and equipment ($228 million), goodwill ($378 million), and other intangible assets ($245 million, which primarily consisted of customer relationships, developed technology, and in process research and development ("IPR&D")), partially offset by current liabilities ($44 million, which primarily consisted of accrued liabilities and accounts payable) and non-current liabilities ($79 million, primarily deferred income tax). Goodwill is primarily attributable to future growth opportunities provided by acquired R&D capabilities and any intangibles that did not qualify for separate recognition. The goodwill is not deductible for income tax purposes. The amortizable intangible assets are being amortized over their estimated useful lives of 8 to 19 years. During the six months ended June 30, 2022, PMI did not record any measurement period adjustments to the preliminary purchase price allocation. The purchase price allocation is preliminary and continues to be subject to refinement.

Vectura – During the third quarter and up to September 15, 2021, PMI acquired a controlling interest of 74.77% of the total issued shares in Vectura Group plc (“Vectura”), an inhaled therapeutics company based in the United Kingdom. The shares were acquired through a series of open market purchases and acceptances of the tender offer at a price of 165 pence per share. As a result of additional acceptances of the offer and the exercise of the right to acquire compulsorily the Vectura shares, in accordance with the applicable English law, PMI completed the acquisition of 100% of Vectura in the fourth quarter of 2021. The acquisition was funded with existing cash from a designated account operated solely for the purpose of funding this acquisition.

The total purchase price of $1,384 million (GBP 1.0 billion) for 100% of the Vectura shares was preliminarily allocated to cash ($136 million), current assets including receivables and inventories ($89 million), non-current assets including property, plant and equipment ($67 million), goodwill ($590 million), and other intangible assets ($719 million, which primarily consisted of developed technology, and IPR&D), partially offset by current liabilities ($100 million, primarily accrued liabilities), and non-current liabilities ($117 million, primarily deferred income tax). Goodwill is primarily attributable to future growth opportunities provided by acquired R&D capabilities and any intangibles that did not qualify for separate recognition. The goodwill is not deductible for income tax purposes. The amortizable intangible assets are being amortized over their estimated useful lives of 3 to 15 years. During the six months ended June 30, 2022, PMI did not record any measurement period adjustments to the preliminary purchase price allocation. PMI is still assessing information received, as of the acquisition date
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Philip Morris International Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
and through the period ended June 30, 2022, relating to the valuation assumptions utilized for certain intangible assets of Vectura and expects to complete this process prior to the end of the measurement period in September 2022. This assessment may result in a measurement period reduction and/or impairment of these intangible assets.

Pro forma results of operations for the above business combinations have not been presented as the aggregate impact is not material to PMI's consolidated statements of earnings.

Asset Acquisition

On August 9, 2021, PMI acquired 100% of OtiTopic, Inc., a U.S. respiratory drug development company with a late-stage dry powder inhalation aspirin treatment for acute myocardial infarction. The transaction price was $38 million in cash, plus transaction costs, with additional contingent payment of $13 million, primarily related to certain key milestones that PMI deemed probable. Additionally, PMI may owe up to $25 million in future additional contingent payments dependent upon