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Goodwill and Other Intangible Assets, net
 12 Months Ended
Dec. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Other Intangible Assets, net Goodwill and Other Intangible Assets, net
Goodwill and other intangible assets, net, were as follows at December 31:
 20242023
(in millions)GoodwillOther Intangible Assets, netGoodwillOther Intangible Assets, net
Smokeable products segment$99 $2,936 $99 $2,963 
Oral tobacco products segment5,078 8,679 5,078 9,065 
Other1,768 
(1)
1,358 1,614 
(1)
1,658 
Total$6,945 $12,973 $6,791 $13,686 
(1) Represents e-vapor reporting unit goodwill related to the NJOY Transaction. See Note 3. Acquisition of NJOY.
Other intangible assets consisted of the following at December 31:
20242023
(in millions)Gross Carrying
Amount		Accumulated
Amortization		Gross Carrying
Amount		Accumulated
Amortization
Indefinite-lived intangible assets
$11,089 $— $11,443 $— 
Definite-lived intangible assets
2,621 737 2,841 598 
Total other intangible assets
$13,710 $737 $14,284 $598 
At December 31, 2024, substantially all of our indefinite-lived intangible assets consisted of (i) MST trademarks of $8.5 billion, which consists of Copenhagen, Skoal and other MST trademarks of $4.0 billion, $3.6 billion and $0.9 billion, respectively, from our 2009 acquisition of UST, and (ii) cigar trademarks of $2.6 billion from our 2007 acquisition of Middleton. Definite-lived intangible assets, consisting primarily of intellectual property (which includes developed technology), certain cigarette trademarks, e-vapor trademarks and customer relationships, are amortized over a weighted-average period of approximately 19 years. Pre-tax amortization expense for definite-lived intangible assets during the years ended December 31, 2024, 2023 and 2022 was $139 million, $128 million and $73 million, respectively. We estimate our annual amortization expense for each of the next five years to be approximately $150 million, assuming no additional transactions occur that require the amortization of intangible assets.
On April 30, 2024, we assigned the exclusive U.S. commercialization rights to the IQOS Tobacco Heating System (“IQOS System”) to Philip Morris International Inc. (“PMI”) pursuant to the terms of a purchase agreement entered into with PMI in October 2022 (“IQOS Transaction”). In exchange for the assignment of the U.S. commercialization rights to the IQOS System, we received total cash payments of approximately $2.8 billion ($1.0 billion in 2022 and $1.8 billion, including interest, in the third quarter of 2023), $2.7 billion of which was classified as a deferred gain on our consolidated balance sheet at December 31, 2023. Upon the assignment of the U.S. commercialization rights to the IQOS System, we recorded a pre-tax gain of $2.7 billion for the year ended December 31, 2024 in our consolidated statement of earnings.
The changes in goodwill and net carrying amount of intangible assets were as follows:
20242023
(in millions)
Goodwill
Other Intangible Assets, netGoodwill Other Intangible Assets, net
Balance at January 1
$6,791 $13,686 $5,177 $12,384 
Changes due to:
   Acquisitions (1)
154 (220)1,614 1,430 
   Asset impairment — (354)— — 
   Amortization — (139)— (128)
Balance at December 31
$6,945 $12,973 $6,791 $13,686 
(1) Substantially all of the 2023 amounts are attributable to the NJOY Transaction. The 2024 amounts represent the measurement period adjustments related to the NJOY Transaction. See Note 3. Acquisition of NJOY.
At December 31, 2023, the estimated fair value of the Skoal trademark exceeded its carrying value of $3.9 billion by approximately 6% ($0.2 billion). Sales volumes of MST products, including Skoal, have been negatively impacted due in part to evolving adult tobacco consumer preferences, which has resulted in consumers increasingly moving across tobacco categories. In connection with the preparation of our financial statements for the period ended June 30, 2024, we evaluated the accelerated growth of innovative tobacco products, including oral nicotine pouches, and the related increase in competitive activity among tobacco categories, which have
contributed to reductions in sales volumes for MST products, including Skoal. We concluded that the expected impact from the sales volume declines on the Skoal trademark represented a triggering event, and as a result of this conclusion, we performed an interim impairment assessment as of June 30, 2024. As a result of (i) lower projected revenue and income due to lower volume assumptions, (ii) a decrease in the perpetual growth rate to 0% (1% at October 1, 2023 valuation) and (iii) an increase in the discount rate to 11.5% (11.0% at October 1, 2023 valuation), we determined the estimated fair value of the Skoal trademark as of June 30, 2024, was below its carrying value and recorded a non-cash, pre-tax impairment of $354 million during the second quarter of 2024, which was recorded in our consolidated statement of earnings for the year ended December 31, 2024. Our estimate of the fair value and carrying value of the Skoal trademark at June 30, 2024 was $3.6 billion after recording the impairment.
During 2024, 2023 and 2022, our annual impairment test of goodwill and indefinite-lived intangible assets resulted in no impairment charges. Based on our 2024 annual impairment test, the estimated fair values of the e-vapor reporting unit and Skoal trademark exceeded their carrying values by approximately 28% ($0.3 billion) and 7% ($0.3 billion), respectively. A hypothetical 1% increase to the discount rate used to estimate the fair value of the e-vapor reporting unit would have resulted in an impairment charge of approximately $125 million during 2024. A hypothetical 1% increase to the discount rate used to estimate the fair value of the Skoal trademark would have resulted in an additional impairment charge of approximately $85 million during 2024. At December 31, 2024 and 2023, there were no accumulated impairment losses related to goodwill.
We use an income approach to estimate the fair values of our reporting units and trademarks. The income approach reflects the discounting of expected future cash flows at a rate of return that incorporates the risk-free rate for the use of those funds, the expected rate of inflation and the risk associated with realizing expected future cash flows.
In determining the estimated fair values of our reporting units and trademarks in 2024, 2023 and 2022, we made various judgments, estimates and assumptions, the most significant of which were volume, revenue, income, perpetual growth rate and discount rate. All significant inputs used in the valuations are classified in Level 3 of the fair value hierarchy.
As further discussed in Note 20. Contingencies, on January 29, 2025, the U.S. International Trade Commission (“ITC”) issued its final determination, including the form of remedy, in the complaint filed by JUUL against Altria and certain of our affiliates, including NJOY, alleging patent infringement. Due to other factors that are uncertain at this time, we are not able to estimate the impact of the ITC’s final determination; however, it could result in a material non-cash impairment of our e-vapor reporting unit in future periods.