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Financial Instruments (Tables)
 9 Months Ended
Sep. 30, 2017
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 sheets as of September 30, 2017 and December 31, 2016, were as follows:

 
 
Asset Derivatives
 
Liability Derivatives
 
 

 
Fair Value
 

 
Fair Value
(in millions)
 
Balance Sheet Classification
 
At September 30, 2017
 
At December 31, 2016
 
Balance Sheet Classification
 
At September 30, 2017
 
At December 31, 2016
Foreign exchange contracts designated as hedging instruments
 
Other current assets
 
$
100

 
$
207

 
Other accrued liabilities
 
$
279

 
$
66

 
 
Other assets
 
79

 
436

 
Other liabilities
 
718

 
36

Foreign exchange contracts not designated as hedging instruments 
 
Other current assets 
 
76

 
161

 
Other accrued liabilities
 
64

 
61

 
 
Other assets
 
—

 
9

 
Other liabilities
 
6

 
—

Total derivatives
 
 
 
$
255

 
$
813

 
 
 
$
1,067

 
$
163
Cash Flow and Net Investment Hedging Activities Effect on Condensed Consolidated Statements of Earnings and Other Comprehensive Earnings
For the nine months and three months ended September 30, 2017 and 2016, PMI's cash flow and net investment hedging instruments impacted the condensed consolidated statements of earnings and comprehensive earnings as follows:
(pre-tax, in millions)
For the Nine Months Ended September 30,
 
Amount of Gain/(Loss) Recognized in Other Comprehensive Earnings/(Losses) on Derivatives
 
Statement of Earnings
Classification of Gain/(Loss)
Reclassified from Other
Comprehensive
Earnings/(Losses) into
Earnings
 
Amount of Gain/(Loss) Reclassified from Other Comprehensive Earnings/(Losses) into Earnings
 
2017
 
2016
 
 
 
2017
 
2016
Derivatives in Cash Flow Hedging Relationship
 
 
 
 
 
 
 
 
 
Foreign exchange contracts
$
(55
)
 
$
(215
)
 
 
 
 
 
 
 
 
 
 
 
Net revenues
 
$
28

 
$
(29
)
 
 
 
 
 
Cost of sales
 
1

 
41

 
 
 
 
 
Marketing, administration and research costs
 
(5
)
 
2

 
 
 
 
 
Interest expense, net
 
(27
)
 
(39
)
Derivatives in Net Investment Hedging Relationship
 
 
 
 
 
 
 
 
 
Foreign exchange contracts
(1,432
)
 
(209
)
 
 
 
 
 
 
Total
$
(1,487
)
 
$
(424
)
 
 
 
$
(3
)
 
$
(25
)
(pre-tax, in millions)
For the Three Months Ended September 30,
 
Amount of Gain/(Loss) Recognized in Other Comprehensive Earnings/(Losses) on Derivatives
 
Statement of Earnings
Classification of Gain/(Loss)
Reclassified from Other
Comprehensive
Earnings/(Losses) into
Earnings
 
Amount of Gain/(Loss) Reclassified from Other Comprehensive Earnings/(Losses) into Earnings
 
2017
 
2016
 
 
 
2017
 
2016
Derivatives in Cash Flow Hedging Relationship
 
 
 
 
 
 
 
 
 
Foreign exchange contracts
$
6

 
$
(12
)
 
 
 
 
 
 
 
 
 
 
 
Net revenues
 
$
13

 
$
(28
)
 
 
 
 
 
Cost of sales
 
1

 
16

 
 
 
 
 
Marketing, administration and research costs
 
(5
)
 
3

 
 
 
 
 
Interest expense, net
 
(15
)
 
(10
)
Derivatives in Net Investment Hedging Relationship
 
 
 
 
 
 
 
 
 
Foreign exchange contracts
(492
)
 
(150
)
 
 
 
 
 
 
Total
$
(486
)
 
$
(162
)
 
 
 
$
(6
)
 
$
(19
)
Qualifying Hedging Activity Reported in Accumulated Other Comprehensive Earnings (Losses), Net of Income Taxes
Hedging activity affected accumulated other comprehensive losses, net of income taxes, as follows:

(in millions)
 
For the Nine Months Ended September 30,
 
For the Three Months Ended September 30,
 
 
2017
 
2016
 
2017
 
2016
Gain/(loss) at beginning of period
 
$
97

 
$
59

 
$
42

 
$
(111
)
Derivative (gains)/losses transferred to earnings
 
4

 
19

 
6

 
16

Change in fair value
 
(48
)
 
(184
)
 
5

 
(11
)
Gain/(loss) at of September 30,
 
$
53

 
$
(106
)
 
$
53

 
$
(106
)