Product Warranty

3 Months Ended

Mar. 31, 2020

Guarantees and Product Warranties [Abstract]

Product Warranty

Product Warranty:

PMI's IQOS devices are subject to standard product warranties generally for a period of 12 months from the date of purchase or such other periods as required by law. PMI generally provides in cost of sales for the estimated cost of warranty in the period the related revenue is recognized. PMI assesses the adequacy of its accrued product warranties and adjusts the amounts as necessary based on actual experience and changes in future estimates. Factors that affect product warranties may vary across markets but typically include device version mix, product failure rates, logistics and service delivery costs, and warranty policies. PMI accounts for its product warranties within other accrued liabilities. At March 31, 2020 and December 31, 2019, these amounts were as follows:

(in millions)	At March 31, 2020			At December 31, 2019
Balance at beginning of period	$	140		$	67
Changes due to:
Warranties issued	84			303
Settlements	(66		)	(230		)
Currency	—			—
Balance at end of period	$	158		$	140