Balance Sheet Offsetting

9 Months Ended

Sep. 30, 2020

Offsetting [Abstract]

Balance Sheet Offsetting

Balance Sheet Offsetting:

Derivative Financial Instruments

PMI uses foreign exchange contracts and interest rate contracts to mitigate its exposure to changes in exchange and interest rates from third-party and intercompany actual and forecasted transactions. Substantially all of PMI's derivative financial instruments are subject to master netting arrangements, whereby the right to offset occurs in the event of default by a participating party. While these contracts contain the enforceable right to offset through close-out netting rights, PMI elects to present them on a gross basis in the condensed consolidated balance sheets. Collateral associated with these arrangements is in the form of cash and is unrestricted. See Note 5. Financial Instruments for disclosures related to PMI's derivative financial instruments.

The effects of these derivative financial instrument assets and liabilities on PMI's condensed consolidated balance sheets were as follows:

(in millions)	Gross Amounts Recognized		Gross Amount Offset in the Condensed Consolidated Balance Sheet		Net Amounts Presented in the Condensed Consolidated Balance Sheet		Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet
							Financial Instruments		Cash Collateral Received/Pledged		Net Amount
At September 30, 2020
Assets
Derivative contracts	$	254	$	—	$	254	$	(185)	$	(54)	$	15
Liabilities
Derivative contracts	$	565	$	—	$	565	$	(185)	$	(368)	$	12
At December 31, 2019
Assets
Derivative contracts	$	390	$	—	$	390	$	(297)	$	(91)	$	2
Liabilities
Derivative contracts	$	419	$	—	$	419	$	(297)	$	(59)	$	63