Financial Instruments (Tables)

3 Months Ended

Apr. 01, 2018

Financial Instruments [Abstract]

Schedule of Financial Assets and Liabilities Measured At Fair Value On a Recurring Basis

The following table presents the financial assets and liabilities measured at fair value using a market approach on a recurring basis by balance sheet categories and fair value hierarchy level as defined in Notes to Consolidated Financial Statements––Note 1E. Basis of Presentation and Significant Accounting Policies: Fair Value in Pfizer’s 2017 Financial Report, in valuing financial instruments on a recurring basis:
	Total		Level 1		Level 2		Total		Level 1		Level 2
(MILLIONS OF DOLLARS)	April 1, 2018						December 31, 2017
Financial assets measured at fair value on a recurring basis:
Short-term investments
Classified as equity securities:
Money market funds	$	1,054	$	—	$	1,054	$	2,115	$	—	$	2,115
Equity(a)	31		20		11		35		16		19
	1,085		20		1,065		2,150		16		2,134
Classified as available-for-sale debt securities:
Government and agency—non-U.S.	3,370		—		3,370		12,242		—		12,242
Corporate	3,581		—		3,581		2,766		—		2,766
Government—U.S.	—		—		—		252		—		252
Agency asset-backed—U.S.	22		—		22		23		—		23
Other asset-backed	33		—		33		79		—		79
	7,006		—		7,006		15,362		—		15,362
Total short-term investments	8,091		20		8,071		17,512		16		17,496
Other current assets
Derivative assets:
Interest rate contracts	93		—		93		104		—		104
Foreign exchange contracts	196		—		196		234		—		234
Total other current assets	289		—		289		337		—		337
Long-term investments
Classified as equity securities:
Equity(a)	1,497		1,465		32		1,440		1,398		42
Classified as trading securities:
Debt	60		60		—		73		73		—
	1,557		1,525		32		1,514		1,472		42
Classified as available-for-sale debt securities:
Government and agency—non-U.S.	247		—		247		387		—		387
Corporate	4,103		46		4,058		4,172		36		4,136
Government—U.S.	465		—		465		495		—		495
Other asset-backed	17		—		17		35		—		35
	4,833		46		4,787		5,090		36		5,054
Total long-term investments	6,390		1,571		4,819		6,603		1,507		5,096
Other noncurrent assets
Derivative assets:
Interest rate contracts	325		—		325		477		—		477
Foreign exchange contracts	92		—		92		7		—		7
Total other noncurrent assets	418		—		418		484		—		484
Total assets	$	15,188	$	1,590	$	13,597	$	24,937	$	1,523	$	23,414
Financial liabilities measured at fair value on a recurring basis:
Other current liabilities
Derivative liabilities:
Interest rate contracts	$	2	$	—	$	2	$	1	$	—	$	1
Foreign exchange contracts	387		—		387		201		—		201
Total other current liabilities	389		—		389		201		—		201
Other noncurrent liabilities
Derivative liabilities:
Interest rate contracts	424		—		424		177		—		177
Foreign exchange contracts	190		—		190		313		—		313
Total other noncurrent liabilities	614		—		614		490		—		490
Total liabilities	$	1,003	$	—	$	1,003	$	691	$	—	$	691

^(a)  As of April 1, 2018 and December 31, 2017, equity securities of $31 million and $42 million, respectively, are held in trust for benefits attributable to the former Pharmacia Savings Plus Plan.

Schedule of Financial Liabilities Not Measured At Fair Value On a Recurring Basis

The following table presents the financial liabilities not measured at fair value on a recurring basis, including the carrying values and estimated fair values:
	April 1, 2018						December 31, 2017
	Carrying Value		Estimated Fair Value				Carrying Value		Estimated Fair Value
(MILLIONS OF DOLLARS)			Total		Level 2				Total		Level 2
Financial Liabilities
Long-term debt, excluding the current portion	$	31,831	$	33,303	$	33,303	$	33,538	$	37,253	$	37,253

Investments by Classification Type

The following table represents our investments by classification type:
(MILLIONS OF DOLLARS)	April 1, 2018		December 31, 2017
Short-term investments
Equity securities	$	1,085	$	2,150
Available-for-sale debt securities	7,006		15,362
Held-to-maturity debt securities	1,028		1,138
Total Short-term investments	$	9,119	$	18,650
Long-term investments
Equity securities	$	1,557	$	1,514
Available-for-sale debt securities	4,833		5,090
Held-to-maturity debt securities	78		4
Private equity investments carried at equity-method or cost	477		408
Total Long-term investments	$	6,945	$	7,015
Held-to-maturity cash equivalents	$	876	$	719

Schedule of Held-to-maturity Securities

At April 1, 2018, the investment securities portfolio consisted of debt securities that were virtually all investment-grade. Information on investments in debt and equity securities at April 1, 2018 and December 31, 2017 is as follows, including, as of April 1, 2018, the contractual maturities, or as necessary, the estimated maturities, of the available-for-sale and held-to maturity debt securities:
	April 1, 2018																	December 31, 2017
			Gross Unrealized							Maturities (in Years)										Gross Unrealized
(MILLIONS OF DOLLARS)	Amortized Cost		Gains		Losses			Fair Value		Within 1		Over 1 to 5		Over 5		Total		Amortized Cost		Gains		Losses			Fair Value
Available-for-sale debt securities
Government and agency––non-U.S.	$	3,536	$	102	$	(21	)	$	3,617	$	3,370	$	247	$	—	$	3,617	$	12,616	$	61	$	(48	)	$	12,629
Corporate(a)	7,771		6		(93		)	7,685		3,581		2,674		1,430		7,685		6,955		15		(33		)	6,938
Government––U.S.	490		—		(25		)	466		—		462		3		466		765		—		(19		)	747
Agency asset-backed––U.S.	23		—		(1		)	22		22		—		—		22		24		—		(1		)	24
Other asset-backed(b)	50		—		—			50		33		15		2		50		114		—		—			114
Held-to-maturity debt securities
Time deposits and other	1,578		—		—			1,578		1,500		74		4		1,578		1,091		—		—			1,091
Government and agency––non-U.S.	404		—		—			404		404		—		—		404		770		—		—			770
Total debt securities	$	13,852	$	108	$	(139	)	$	13,821	$	8,910	$	3,472	$	1,439	$	13,821	$	22,337	$	77	$	(100	)	$	22,313
Available-for-sale equity securities(c)
Money market funds																		$	2,115	$	—	$	—		$	2,115
Equity																		728		586		(124		)	1,190
Total available-for-sale equity securities																		$	2,843	$	586	$	(124	)	$	3,304

^(a)  Issued by a diverse group of corporations.

^(b)  Includes loan-backed, receivable-backed and mortgage-backed securities, all of which are in senior positions in the capital structure of the security. Loan-backed securities are collateralized by senior secured obligations of a diverse pool of companies or student loans and receivable-backed securities are collateralized by credit cards receivables. Mortgage-backed securities are collateralized by diversified pools of residential and commercial mortgages.

^(c)  Upon the 2018 adoption of a new accounting standard related to financial assets and liabilities, available-for-sale equity securities were classified as equity securities. For additional information see Note 1B.

Schedule of Available-for-sale Securities

At April 1, 2018, the investment securities portfolio consisted of debt securities that were virtually all investment-grade. Information on investments in debt and equity securities at April 1, 2018 and December 31, 2017 is as follows, including, as of April 1, 2018, the contractual maturities, or as necessary, the estimated maturities, of the available-for-sale and held-to maturity debt securities:
	April 1, 2018																	December 31, 2017
			Gross Unrealized							Maturities (in Years)										Gross Unrealized
(MILLIONS OF DOLLARS)	Amortized Cost		Gains		Losses			Fair Value		Within 1		Over 1 to 5		Over 5		Total		Amortized Cost		Gains		Losses			Fair Value
Available-for-sale debt securities
Government and agency––non-U.S.	$	3,536	$	102	$	(21	)	$	3,617	$	3,370	$	247	$	—	$	3,617	$	12,616	$	61	$	(48	)	$	12,629
Corporate(a)	7,771		6		(93		)	7,685		3,581		2,674		1,430		7,685		6,955		15		(33		)	6,938
Government––U.S.	490		—		(25		)	466		—		462		3		466		765		—		(19		)	747
Agency asset-backed––U.S.	23		—		(1		)	22		22		—		—		22		24		—		(1		)	24
Other asset-backed(b)	50		—		—			50		33		15		2		50		114		—		—			114
Held-to-maturity debt securities
Time deposits and other	1,578		—		—			1,578		1,500		74		4		1,578		1,091		—		—			1,091
Government and agency––non-U.S.	404		—		—			404		404		—		—		404		770		—		—			770
Total debt securities	$	13,852	$	108	$	(139	)	$	13,821	$	8,910	$	3,472	$	1,439	$	13,821	$	22,337	$	77	$	(100	)	$	22,313
Available-for-sale equity securities(c)
Money market funds																		$	2,115	$	—	$	—		$	2,115
Equity																		728		586		(124		)	1,190
Total available-for-sale equity securities																		$	2,843	$	586	$	(124	)	$	3,304

^(a)  Issued by a diverse group of corporations.

^(b)  Includes loan-backed, receivable-backed and mortgage-backed securities, all of which are in senior positions in the capital structure of the security. Loan-backed securities are collateralized by senior secured obligations of a diverse pool of companies or student loans and receivable-backed securities are collateralized by credit cards receivables. Mortgage-backed securities are collateralized by diversified pools of residential and commercial mortgages.

^(c)  Upon the 2018 adoption of a new accounting standard related to financial assets and liabilities, available-for-sale equity securities were classified as equity securities. For additional information see Note 1B.

Contractual Maturities of Available-for-sale and Held-to-maturity Debt Securities

At April 1, 2018, the investment securities portfolio consisted of debt securities that were virtually all investment-grade. Information on investments in debt and equity securities at April 1, 2018 and December 31, 2017 is as follows, including, as of April 1, 2018, the contractual maturities, or as necessary, the estimated maturities, of the available-for-sale and held-to maturity debt securities:
	April 1, 2018																	December 31, 2017
			Gross Unrealized							Maturities (in Years)										Gross Unrealized
(MILLIONS OF DOLLARS)	Amortized Cost		Gains		Losses			Fair Value		Within 1		Over 1 to 5		Over 5		Total		Amortized Cost		Gains		Losses			Fair Value
Available-for-sale debt securities
Government and agency––non-U.S.	$	3,536	$	102	$	(21	)	$	3,617	$	3,370	$	247	$	—	$	3,617	$	12,616	$	61	$	(48	)	$	12,629
Corporate(a)	7,771		6		(93		)	7,685		3,581		2,674		1,430		7,685		6,955		15		(33		)	6,938
Government––U.S.	490		—		(25		)	466		—		462		3		466		765		—		(19		)	747
Agency asset-backed––U.S.	23		—		(1		)	22		22		—		—		22		24		—		(1		)	24
Other asset-backed(b)	50		—		—			50		33		15		2		50		114		—		—			114
Held-to-maturity debt securities
Time deposits and other	1,578		—		—			1,578		1,500		74		4		1,578		1,091		—		—			1,091
Government and agency––non-U.S.	404		—		—			404		404		—		—		404		770		—		—			770
Total debt securities	$	13,852	$	108	$	(139	)	$	13,821	$	8,910	$	3,472	$	1,439	$	13,821	$	22,337	$	77	$	(100	)	$	22,313
Available-for-sale equity securities(c)
Money market funds																		$	2,115	$	—	$	—		$	2,115
Equity																		728		586		(124		)	1,190
Total available-for-sale equity securities																		$	2,843	$	586	$	(124	)	$	3,304

^(a)  Issued by a diverse group of corporations.

^(b)  Includes loan-backed, receivable-backed and mortgage-backed securities, all of which are in senior positions in the capital structure of the security. Loan-backed securities are collateralized by senior secured obligations of a diverse pool of companies or student loans and receivable-backed securities are collateralized by credit cards receivables. Mortgage-backed securities are collateralized by diversified pools of residential and commercial mortgages.

^(c)  Upon the 2018 adoption of a new accounting standard related to financial assets and liabilities, available-for-sale equity securities were classified as equity securities. For additional information see Note 1B.

Schedule of Gains and Losses on Investment Securities

The following table presents the unrealized gains and losses for the period that relates to equity securities still held at the reporting date:
(MILLIONS OF DOLLARS)	April 1, 2018
Net gains recognized during the period on equity securities(a)	$	98
Less: Net losses recognized during the period on equity securities sold during the period	(12		)
Unrealized gains during the reporting period on equity securities still held at the reporting date	86

^(a)  Includes $111 million of unrealized net gains reflecting the adoption of a new accounting standard in the first quarter of 2018 (see Note 1B and Note 4), and $13 million of unrealized loss on other equity securities.

Schedule of Short-term Borrowings

Short-term borrowings include:
(MILLIONS OF DOLLARS)	April 1, 2018			December 31, 2017
Commercial paper	$	4,000		$	6,100
Current portion of long-term debt, principal amount	4,752			3,532
Other short-term borrowings, principal amount(a)	257			320
Total short-term borrowings, principal amount	9,009			9,951
Net fair value adjustments related to hedging and purchase accounting	10			14
Net unamortized discounts, premiums and debt issuance costs	(8		)	(12		)
Total Short-term borrowings, including current portion of long-term debt, carried at historical proceeds, as adjusted	$	9,010		$	9,953

^(a)  Other short-term borrowings primarily include cash collateral. For additional information, see Note 7F.

Schedule of Principal Amounts of Senior Unsecured Long-Term Debt and Adjustments

The following table provides the aggregate principal amount of our senior unsecured long-term debt, and adjustments to report our aggregate long-term debt:
(MILLIONS OF DOLLARS)	April 1, 2018			December 31, 2017
Total long-term debt, principal amount	$	31,484		$	32,783
Net fair value adjustments related to hedging and purchase accounting	461			872
Net unamortized discounts, premiums and debt issuance costs	(122		)	(125		)
Other long-term debt	8			8
Total long-term debt, carried at historical proceeds, as adjusted	$	31,831		$	33,538
Current portion of long-term debt, carried at historical proceeds	$	4,763		$	3,546

Schedule of Derivative Instruments

The following table provides the fair value of the derivative financial instruments and the related notional amounts presented between those derivatives that are designated as hedging instruments and those that are not designated as hedging instruments:
(MILLIONS OF DOLLARS)	April 1, 2018						December 31, 2017
			Fair Value						Fair Value
	Notional		Asset		Liability		Notional		Asset		Liability
Derivatives designated as hedging instruments:
Foreign exchange contracts(a)	$	18,777	$	258	$	442	$	18,723	$	179	$	459
Interest rate contracts	12,430		418		426		12,430		581		178
			676		868				760		637
Derivatives not designated as hedging instruments:
Foreign exchange contracts	$	14,510	$	31	$	134	$	14,300	$	62	$	54
Total			$	707	$	1,003			$	822	$	691

^(a)  As of April 1, 2018, the notional amount of outstanding foreign currency forward-exchange contracts hedging our intercompany forecasted inventory sales was $5.0 billion.

Schedule of Derivative Assets

The following table provides the fair value of the derivative financial instruments and the related notional amounts presented between those derivatives that are designated as hedging instruments and those that are not designated as hedging instruments:
(MILLIONS OF DOLLARS)	April 1, 2018						December 31, 2017
			Fair Value						Fair Value
	Notional		Asset		Liability		Notional		Asset		Liability
Derivatives designated as hedging instruments:
Foreign exchange contracts(a)	$	18,777	$	258	$	442	$	18,723	$	179	$	459
Interest rate contracts	12,430		418		426		12,430		581		178
			676		868				760		637
Derivatives not designated as hedging instruments:
Foreign exchange contracts	$	14,510	$	31	$	134	$	14,300	$	62	$	54
Total			$	707	$	1,003			$	822	$	691

^(a)  As of April 1, 2018, the notional amount of outstanding foreign currency forward-exchange contracts hedging our intercompany forecasted inventory sales was $5.0 billion.

Schedule of Derivative Liabilities

The following table provides the fair value of the derivative financial instruments and the related notional amounts presented between those derivatives that are designated as hedging instruments and those that are not designated as hedging instruments:
(MILLIONS OF DOLLARS)	April 1, 2018						December 31, 2017
			Fair Value						Fair Value
	Notional		Asset		Liability		Notional		Asset		Liability
Derivatives designated as hedging instruments:
Foreign exchange contracts(a)	$	18,777	$	258	$	442	$	18,723	$	179	$	459
Interest rate contracts	12,430		418		426		12,430		581		178
			676		868				760		637
Derivatives not designated as hedging instruments:
Foreign exchange contracts	$	14,510	$	31	$	134	$	14,300	$	62	$	54
Total			$	707	$	1,003			$	822	$	691

^(a)  As of April 1, 2018, the notional amount of outstanding foreign currency forward-exchange contracts hedging our intercompany forecasted inventory sales was $5.0 billion.

Information about Gains/(Losses) Incurred to Hedge or Offset Operational Foreign Exchange or Interest Rate Risk

The following table provides information about the gains/(losses) incurred to hedge or offset operational foreign exchange or interest rate risk:
	Amount of Gains/(Losses) Recognized in OID(a), (b)						Amount of Gains/(Losses) Recognized in OCI(a), (c)						Amount of Gains/(Losses) Reclassified from OCI into OID and COS(a), (c)
(MILLIONS OF DOLLARS)	April 1, 2018			April 2, 2017			April 1, 2018			April 2, 2017			April 1, 2018			April 2, 2017
Three Months Ended
Derivative Financial Instruments in Cash Flow Hedge Relationships:
Foreign exchange contracts(d)	$	—		$	(3	)	$	(143	)	$	(9	)	$	(72	)	$	242
Amount excluded from effectiveness testing recognized in earnings based on an amortization approach	—			—			28			—			27			—
Derivative Financial Instruments in Fair Value Hedge Relationships:
Interest rate contracts	(399		)	(92		)	—			—			—			—
Hedged item gain/(loss)	399			92			—			—			—			—
Foreign exchange contracts	(7		)	3			—			—			—			—
Hedged item gain/(loss)	8			(3		)	—			—			—			—
Derivative Financial Instruments in Net Investment Hedge Relationships:
Foreign exchange contracts	—			—			(5		)	—			—			—
The portion of gains/(losses) on foreign exchange contracts excluded from the assessment of hedge effectiveness	—			—			2			—			6			—
Non-Derivative Financial Instruments in Net Investment Hedge Relationships:
Foreign currency short-term borrowings(e)	—			—			(42		)	—			—			—
Foreign currency long-term debt(e)	—			—			(92		)	(57		)	—			—
Derivative Financial Instruments Not Designated as Hedges:
Foreign exchange contracts	(55		)	(140		)	—			—			—			—
All other net	—			—			—			—			—			—
	$	(55	)	$	(143	)	$	(251	)	$	(66	)	$	(39	)	$	242

^(a)  OID = Other (income)/deductions—net, included in Other (income)/deductions—net in the condensed consolidated statements of income. COS = Cost of Sales, included in Cost of sales in the condensed consolidated statements of income. OCI = Other comprehensive income/(loss), included in the condensed consolidated statements of comprehensive income.

^(b)  For the three months ended April 2, 2017, there was no significant ineffectiveness.

^(c)  For derivative financial instruments in cash flow hedge relationships, the gains and losses are included in Other comprehensive (loss)/income––Unrealized holding losses on derivative financial instruments, net. For derivative financial instruments in net investment hedge relationships and for foreign currency debt designated as hedging instruments, the effective portion is included in Other comprehensive (loss)/income––Foreign currency translation adjustments, net.

^(d)  Based on quarter-end foreign exchange rates that are subject to change, we expect to reclassify a pre-tax loss of $156 million within the next 12 months into Cost of sales. The maximum length of time over which we are hedging future foreign exchange cash flow relates to our $1.9 billion U.K. pound debt maturing in 2043.

^(e)  Short-term borrowings include foreign currency short-term borrowings with carrying values of $1.5 billion as of April 1, 2018, which are used as hedging instruments in net investment hedges. Long-term debt includes foreign currency long-term borrowings with carrying values of $3.3 billion as of April 1, 2018, which are used as hedging instruments in net investment hedges.

Schedule of Amounts Recorded In Balance Sheet Related to Cumulative Adjustments for Fair Value Hedges

The following table provides the amounts recorded in our condensed consolidated balance sheet related to cumulative basis adjustments for fair value hedges:
	Carrying Amount of Hedged Assets/Liabilities		Cumulative Amount of Fair Value Hedging Adjustment Gains/(Losses) Included in the Carrying Amount of the Hedged Assets/Liabilities
MILLIONS OF DOLLARS	April 1, 2018		April 1, 2018
Short-term investments	$	286	$	(1	)
Long-term investments	45		(1		)
Short-term borrowings, including current portion of long-term debt	999		1
Long-term debt	11,372		100

The following table provides the total amount of each income and expense line in which the results of fair value or cash flow hedges are recorded:
	Three Months Ended
(MILLIONS OF DOLLARS	April 1, 2018
Cost of sales	$	2,563
Other (income)/deductions—net	(178		)

Schedule of Amounts Recorded In Balance Sheet Related to Cumulative Adjustments for Fair Value Hedges

The following table provides the total amount of each income and expense line in which the results of fair value or cash flow hedges are recorded:
	Three Months Ended
(MILLIONS OF DOLLARS	April 1, 2018
Cost of sales	$	2,563
Other (income)/deductions—net	(178		)