XML 55 R33.htm IDEA: XBRL DOCUMENT v3.20.2
Financial Instruments (Tables)
 6 Months Ended
Jun. 30, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives Not Designated as Hedging Instruments
For the six months and three months ended June 30, 2020 and 2019, these items impacted the condensed consolidated statement of earnings as follows:
(pre-tax, in millions)
 
For the Three Months Ended June 30,
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,
 
 
 
 
2020
 
2019
 
2020
 
2019
Derivative contracts
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense, net
 
$
48

 
$
48

 
$
14

 
$
31

Total
 
 
 
$
48

 
$
48

 
$
14

 
$
31
Fair Value of Derivative Contracts
The fair value of PMI’s derivative contracts included in the condensed consolidated balance sheets as of June 30, 2020 and December 31, 2019, were as follows:
 
 
Derivative Assets
 
Derivative Liabilities
 
 

 
Fair Value
 

 
Fair Value
(in millions)
 
Balance Sheet Classification
 
At June 30, 2020
 
At December 31, 2019
 
Balance Sheet Classification
 
At June 30, 2020
 
At December 31, 2019
Derivative contracts designated as hedging instruments
 
Other current assets
 
$
207

 
$
319

 
Other accrued liabilities
 
$
32

 
$
23

 
 
Other assets
 
74

 
21

 
Income taxes and other liabilities
 
126

 
301

Derivative contracts not designated as hedging instruments 
 
Other current assets 
 
41

 
50

 
Other accrued liabilities
 
81

 
70

 
 
Other assets
 
—

 
—

 
Income taxes and other liabilities
 
16

 
25

Total derivatives
 
 
 
$
322

 
$
390

 
 
 
$
255

 
$
419
Cash Flow and Net Investment Hedging Activities Effect on Condensed Consolidated Statements of Earnings and Other Comprehensive Earnings
For the six months and three months ended June 30, 2020 and 2019, 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 Six Months Ended June 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
 
2020
 
2019
 
 
 
2020
 
2019
Derivatives in Cash Flow Hedging Relationship
 
 
 
 
 
 
 
 
 
Derivative contracts
$
(7
)
 
$
(23
)
 
 
 
 
 
 
 
 
 
 
 
Net revenues
 
$
4

 
$
29

 
 
 
 
 
Cost of sales
 
7

 
—

 
 
 
 
 
Marketing, administration and research costs
 
11

 
1

 
 
 
 
 
Interest expense, net
 
(5
)
 
(2
)
Derivatives in Net Investment Hedging Relationship
 
 
 
 
 
 
 
 
 
Derivative contracts
269

 
145

 
 
 
 
 
 
Total
$
262

 
$
122

 
 
 
$
17

 
$
28

(pre-tax, in millions)
For the Three Months Ended June 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
 
2020
 
2019
 
 
 
2020
 
2019
Derivatives in Cash Flow Hedging Relationship
 
 
 
 
 
 
 
 
 
Derivative contracts
$
(38
)
 
$
(21
)
 
 
 
 
 
 
 
 
 
 
 
Net revenues
 
$
1

 
$
19

 
 
 
 
 
Cost of sales
 
3

 
—

 
 
 
 
 
Marketing, administration and research costs
 
6

 
4

 
 
 
 
 
Interest expense, net
 
(3
)
 
—

Derivatives in Net Investment Hedging Relationship
 
 
 
 
 
 
 
 
 
Derivative contracts
(138
)
 
(66
)
 
 
 
 
 
 
Total
$
(176
)
 
$
(87
)
 
 
 
$
7

 
$
23
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 Six Months Ended June 30,
 
For the Three Months Ended June 30,
 
2020
2019
 
2020
2019
Gain/(loss) at beginning of period,
$
3

$
35

 
$
20

$
30

Derivative (gains)/losses transferred to earnings
(15
)
(25
)
 
(6
)
(21
)
Change in fair value
(6
)
(20
)
 
(32
)
(19
)
Gain/(loss) as of June 30,
$
(18
)
$
(10
)
 
$
(18
)
$
(10
)