Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2012

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Fair Value Of Foreign Exchange Contracts

The fair value of PMI’s foreign exchange contracts included in the condensed consolidated balance sheet as of June 30, 2012 and December 31, 2011, were as follows:

	Asset Derivatives					Liability Derivatives
		Fair Value					Fair Value
(in millions)	Balance Sheet Classification	At June 30, 2012		At December 31, 2011		Balance Sheet Classification	At June 30, 2012		At December 31, 2011
Foreign exchange contracts designated as hedging instruments	Other current assets	$	91	$	57	Other accrued liabilities	$	6	$	4
	Other assets	3		—		Other liabilities	1		—
Foreign exchange contracts not designated as hedging instruments	Other current assets	50		88		Other accrued liabilities	56		62
						Other liabilities	1		—
Total derivatives		$	144	$	145		$	64	$	66

Hedging Activities Effect On Condensed Consolidated Statements Of Earnings And Other Comprehensive Earnings

Hedging activities, which represent movement in derivatives as well as the respective underlying transactions, had the following effect on PMI’s condensed consolidated statements of earnings and other comprehensive earnings for the six months and three months ended June 30,2012 and 2011:

(in millions)	For the Six Months Ended June 30, 2012
Gain (Loss)	Cash Flow Hedges			Net Investment Hedges		Other Derivatives		Income Taxes			Total
Statement of Earnings:
Net revenues	$	24				$	—				$	24
Cost of sales	19					—					19
Marketing, administration and research costs	—					—					—
Operating income	43					—					43
Interest expense, net	(30		)			6					(24		)
Earnings before income taxes	13					6					19
Provision for income taxes	(1		)			—					(1		)
Net earnings attributable to PMI	$	12				$	6				$	18
Other Comprehensive Earnings:
Gains transferred to earnings	$	(13	)					$	1		$	(12	)
Recognized gains	13							(1		)	12
Net impact on equity	$	—						$	—		$	—
Cumulative translation adjustment				$	—						$	—

(in millions)	For the Six Months Ended June 30, 2011
Gain (Loss)	Cash Flow Hedges			Net Investment Hedges		Other Derivatives			Income Taxes			Total
Statement of Earnings:
Net revenues	$	—				$	—					$	—
Cost of sales	—					—						—
Marketing, administration and research costs	—					—						—
Operating income	—					—						—
Interest expense, net	(16		)			14						(2		)
Earnings before income taxes	(16		)			14						(2		)
Provision for income taxes	2					(4		)				(2		)
Net earnings attributable to PMI	$	(14	)			$	10					$	(4	)
Other Comprehensive Earnings:
Losses transferred to earnings	$	16							$	(2	)	$	14
Recognized gains	5								—			5
Net impact on equity	$	21							$	(2	)	$	19
Cumulative translation adjustment				$	2							$	2

(in millions)	For the Three Months Ended June 30, 2012
Gain (Loss)	Cash Flow Hedges			Net Investment Hedges		Other Derivatives		Income Taxes		Total
Statement of Earnings:
Net revenues	$	13				$	—			$	13
Cost of sales	4					—				4
Marketing, administration and research costs	—					—				—
Operating income	17					—				17
Interest expense, net	(15		)			5				(10		)
Earnings before income taxes	2					5				7
Provision for income taxes	—					—				—
Net earnings attributable to PMI	$	2				$	5			$	7
Other Comprehensive Earnings:
Gains transferred to earnings	$	(2	)					$	—	$	(2	)
Recognized losses	(38		)					4		(34		)
Net impact on equity	$	(40	)					$	4	$	(36	)
Cumulative translation adjustment				$	—					$	—

(in millions)	For the Three Months Ended June 30, 2011
Gain (Loss)	Cash Flow Hedges			Net Investment Hedges		Other Derivatives			Income Taxes			Total
Statement of Earnings:
Net revenues	$	—				$	—					$	—
Cost of sales	—					—						—
Marketing, administration and research costs	—					—						—
Operating income	—					—						—
Interest expense, net	(8		)			11						3
Earnings before income taxes	(8		)			11						3
Provision for income taxes	1					(3		)				(2		)
Net earnings attributable to PMI	$	(7	)			$	8					$	1
Other Comprehensive Earnings:
Losses transferred to earnings	$	8							$	(1	)	$	7
Recognized losses	(19		)						2			(17		)
Net impact on equity	$	(11	)						$	1		$	(10	)
Cumulative translation adjustment				$	—							$	—

Pre-Tax Effect Of Foreign Exchange Contracts Designated As Cash Flow Hedging Instruments

For the six months and three months ended June 30,2012 and 2011, foreign exchange contracts that were designated as cash flow hedging instruments impacted the condensed consolidated statements of earnings and other comprehensive earnings as follows:

(pre-tax, in millions)	For the Six Months Ended June 30,
Derivatives in Cash Flow Hedging Relationship	Statement of Earnings Classification of Gain/(Loss) Reclassified from Other Comprehensive Earnings into Earnings	Amount of Gain/(Loss) Reclassified  from Other Comprehensive  Earnings into Earnings						Amount of Gain/(Loss) Recognized in Other Comprehensive Earnings on Derivatives
		2012			2011			2012		2011
Foreign exchange contracts								$	13	$	5
	Net revenues	$	24		$	—
	Cost of sales	19			—
	Marketing, administration and research costs	—			—
	Interest expense, net	(30		)	(16		)
Total		$	13		$	(16	)	$	13	$	5

(pre-tax, in millions)	For the Three Months Ended June 30,
Derivatives in Cash Flow Hedging Relationship	Statement of Earnings Classification of Gain/(Loss) Reclassified from Other Comprehensive Earnings into Earnings	Amount of Gain/(Loss) Reclassified  from Other Comprehensive  Earnings into Earnings						Amount of Gain/(Loss) Recognized in Other Comprehensive Earnings on Derivatives
		2012			2011			2012			2011
Foreign exchange contracts								$	(38	)	$	(19	)
	Net revenues	$	13		$	—
	Cost of sales	4			—
	Marketing, administration and research costs	—			—
	Interest expense, net	(15		)	(8		)
Total		$	2		$	(8	)	$	(38	)	$	(19	)

Pre-Tax Effect Of Foreign Exchange Contracts Designated As Net Investment Hedging Instruments

For the six months and three months ended June 30,2012 and 2011, foreign exchange contracts that were designated as net investment hedging instruments impacted the condensed consolidated statements of earnings and other comprehensive earnings as follows:

(pre-tax, in millions)	For the Six Months Ended June 30,
Derivatives in Net Investment Hedging Relationship	Statement of Earnings Classification of Gain/(Loss) Reclassified from Other Comprehensive Earnings into Earnings	Amount of Gain/(Loss) Reclassified from Other Comprehensive Earnings into Earnings				Amount of Gain/(Loss) Recognized in Other Comprehensive Earnings on Derivatives
		2012		2011		2012		2011
Foreign exchange contracts						$	—	$	2
	Interest expense, net	$	—	$	—

(pre-tax, in millions)	For the Three Months Ended June 30,
Derivatives in Net Investment Hedging Relationship	Statement of Earnings Classification of Gain/(Loss) Reclassified from Other Comprehensive Earnings into Earnings	Amount of Gain/(Loss) Reclassified from Other Comprehensive Earnings into Earnings				Amount of Gain/(Loss) Recognized in Other Comprehensive Earnings on Derivatives
		2012		2011		2012		2011
Foreign exchange contracts						$	—	$	—
	Interest expense, net	$	—	$	—

Pre-Tax Effect Of Foreign Exchange Contracts Designated As Other Derivatives

As a result, for the six months and three months ended June 30,2012 and 2011, these items impacted the condensed consolidated statements of earnings as follows:

(pre-tax, in millions)
Derivatives not Designated    as Hedging Instruments	Statement of Earnings Classification of Gain/(Loss)	Amount of Gain/(Loss) Recognized in Earnings
		For the Six Months Ended June 30,				For the Three Months Ended June 30,
		2012		2011		2012		2011
Foreign exchange contracts
	Marketing, administration and research costs	$	—	$	—	$	—	$	—
	Interest expense, net	6		14		5		11
		$	6	$	14	$	5	$	11

Hedging Activity Reported In Accumulated Other Comprehensive Earnings (Losses), Net Of Income Taxes

Hedging activity impacted accumulated other comprehensive losses, net of income taxes, as follows:

(in millions)	For the Six Months Ended June 30,					For the Three Months Ended June 30,
	2012			2011		2012			2011
Gain at beginning of period	$	15		$	2	$	51		$	31
Derivative (gains) losses transferred to earnings	(12		)	14		(2		)	7
Change in fair value	12			5		(34		)	(17		)
Gain as of June 30	$	15		$	21	$	15		$	21