Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives Not Designated as Hedging Instruments

For the nine months and three months ended September 30, 2020 and 2019, these items impacted the condensed consolidated statement 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 Nine Months Ended September 30,				For the Three Months Ended September 30,
		2020		2019		2020		2019
Derivative contracts
	Interest expense, net	$	59	$	79	$	11	$	31
Total		$	59	$	79	$	11	$	31

Fair Value of Derivative Contracts

The fair value of PMI’s derivative contracts included in the condensed consolidated balance sheets as of September 30, 2020 and December 31, 2019, were as follows:

	Derivative Assets					Derivative Liabilities
		Fair Value					Fair Value
		At		At			At		At
(in millions)	Balance Sheet Classification	September 30, 2020		December 31, 2019		Balance Sheet Classification	September 30, 2020		December 31, 2019
Derivative contracts designated as hedging instruments	Other current assets	$	164	$	319	Other accrued liabilities	$	89	$	23
	Other assets	35		21		Income taxes and other liabilities	351		301
Derivative contracts not designated as hedging instruments	Other current assets	55		50		Other accrued liabilities	90		70
	Other assets	—		—		Income taxes and other liabilities	35		25
Total derivatives		$	254	$	390		$	565	$	419

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, 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 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
	2020		2019			2020		2019
Derivatives in Cash Flow Hedging Relationship
Derivative contracts	$	(45)	$	(39)
					Net revenues	$	4	$	22
					Cost of sales	7		—
					Marketing, administration and research costs	15		(3)
					Interest expense, net	(8)		(4)
Derivatives in Net Investment Hedging Relationship
Derivative contracts	(52)		564
Total	$	(97)	$	525		$	18	$	15

(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
	2020		2019			2020		2019
Derivatives in Cash Flow Hedging Relationship
Derivative contracts	$	(38)	$	(16)
					Net revenues	$	—	$	(7)
					Cost of sales	—		—
					Marketing, administration and research costs	4		(4)
					Interest expense, net	(3)		(2)
Derivatives in Net Investment Hedging Relationship
Derivative contracts	(321)		419
Total	$	(359)	$	403		$	1	$	(13)

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,
	2020		2019		2020		2019
Gain/(loss) at beginning of period,	$	3	$	35	$	(18)	$	(10)
Derivative (gains)/losses transferred to earnings	(17)		(12)		(2)		13
Change in fair value	(37)		(34)		(31)		(14)
Gain/(loss) as of September 30,	$	(51)	$	(11)	$	(51)	$	(11)