Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 21, 2019 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-33708 | |
Entity Registrant Name | Philip Morris International Inc. | |
Entity Central Index Key | 0001413329 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Incorporation, State or Country Code | VA | |
Entity Tax Identification Number | 13-3435103 | |
Entity Address, Address Line One | 120 Park Avenue | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10017 | |
City Area Code | (917) | |
Local Phone Number | 663-2000 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 1,555,874,621 | |
Common Stock [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Common Stock, no par value | |
Trading Symbol | PM | |
Security Exchange Name | NYSE | |
1.875% Notes due 2019 [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 1.875% Notes due 2019 | |
Trading Symbol | PM19D | |
Security Exchange Name | NYSE | |
2.000% Notes due 2020 [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 2.000% Notes due 2020 | |
Trading Symbol | PM20B | |
Security Exchange Name | NYSE | |
Floating Notes due 2020 [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Floating Notes due 2020 | |
Trading Symbol | PM20C | |
Security Exchange Name | NYSE | |
1.750% Notes due 2020 [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 1.750% Notes due 2020 | |
Trading Symbol | PM20A | |
Security Exchange Name | NYSE | |
4.500% Notes due 2020 [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 4.500% Notes due 2020 | |
Trading Symbol | PM20 | |
Security Exchange Name | NYSE | |
1.875% Notes due 2021 - 1 [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 1.875% Notes due 2021 | |
Trading Symbol | PM21B | |
Security Exchange Name | NYSE | |
1.875% Notes due 2021 - 2 [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 1.875% Notes due 2021 | |
Trading Symbol | PM21C | |
Security Exchange Name | NYSE | |
4.125% Notes due 2021 [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 4.125% Notes due 2021 | |
Trading Symbol | PM21 | |
Security Exchange Name | NYSE | |
2.900% Notes due 2021 [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 2.900% Notes due 2021 | |
Trading Symbol | PM21A | |
Security Exchange Name | NYSE | |
2.625% Notes due 2022 [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 2.625% Notes due 2022 | |
Trading Symbol | PM22A | |
Security Exchange Name | NYSE | |
2.375% Notes due 2022 [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 2.375% Notes due 2022 | |
Trading Symbol | PM22B | |
Security Exchange Name | NYSE | |
2.500% Notes due 2022 - 1 [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 2.500% Notes due 2022 | |
Trading Symbol | PM22 | |
Security Exchange Name | NYSE | |
2.500% Notes due 2022 - 2 [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 2.500% Notes due 2022 | |
Trading Symbol | PM22C | |
Security Exchange Name | NYSE | |
2.625% Notes due 2023 [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 2.625% Notes due 2023 | |
Trading Symbol | PM23 | |
Security Exchange Name | NYSE | |
2.125% Notes due 2023 [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 2.125% Notes due 2023 | |
Trading Symbol | PM23B | |
Security Exchange Name | NYSE | |
3.600% Notes due 2023 [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 3.600% Notes due 2023 | |
Trading Symbol | PM23A | |
Security Exchange Name | NYSE | |
2.875% Notes due 2024 - 1 [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 2.875% Notes due 2024 | |
Trading Symbol | PM24 | |
Security Exchange Name | NYSE | |
2.875% Notes due 2024 - 2 [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 2.875% Notes due 2024 | |
Trading Symbol | PM24C | |
Security Exchange Name | NYSE | |
0.625% Notes due 2024 [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 0.625% Notes due 2024 | |
Trading Symbol | PM24B | |
Security Exchange Name | NYSE | |
3.250% Notes due 2024 [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 3.250% Notes due 2024 | |
Trading Symbol | PM24A | |
Security Exchange Name | NYSE | |
2.750% Notes due 2025 [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 2.750% Notes due 2025 | |
Trading Symbol | PM25 | |
Security Exchange Name | NYSE | |
3.375% Notes due 2025 [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 3.375% Notes due 2025 | |
Trading Symbol | PM25A | |
Security Exchange Name | NYSE | |
2.750% Notes due 2026 [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 2.750% Notes due 2026 | |
Trading Symbol | PM26A | |
Security Exchange Name | NYSE | |
2.875% Notes due 2026 [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 2.875% Notes due 2026 | |
Trading Symbol | PM26 | |
Security Exchange Name | NYSE | |
0.125% Notes due 2026 [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 0.125% Notes due 2026 | |
Trading Symbol | PM26B | |
Security Exchange Name | NYSE | |
3.125% Notes due 2027 [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 3.125% Notes due 2027 | |
Trading Symbol | PM27 | |
Security Exchange Name | NYSE | |
3.125% Notes due 2028 [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 3.125% Notes due 2028 | |
Trading Symbol | PM28 | |
Security Exchange Name | NYSE | |
2.875% Notes due 2029 [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 2.875% Notes due 2029 | |
Trading Symbol | PM29 | |
Security Exchange Name | NYSE | |
3.375% Notes due 2029 [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 3.375% Notes due 2029 | |
Trading Symbol | PM29A | |
Security Exchange Name | NYSE | |
0.800% Notes due 2031 [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 0.800% Notes due 2031 | |
Trading Symbol | PM31 | |
Security Exchange Name | NYSE | |
3.125% Notes due 2033 [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 3.125% Notes due 2033 | |
Trading Symbol | PM33 | |
Security Exchange Name | NYSE | |
2.000% Notes due 2036 [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 2.000% Notes due 2036 | |
Trading Symbol | PM36 | |
Security Exchange Name | NYSE | |
1.875% Notes due 2037 [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 1.875% Notes due 2037 | |
Trading Symbol | PM37A | |
Security Exchange Name | NYSE | |
6.375% Notes due 2038 [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 6.375% Notes due 2038 | |
Trading Symbol | PM38 | |
Security Exchange Name | NYSE | |
1.450% Notes due 2039 [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 1.450% Notes due 2039 | |
Trading Symbol | PM39 | |
Security Exchange Name | NYSE | |
4.375% Notes due 2041 [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 4.375% Notes due 2041 | |
Trading Symbol | PM41 | |
Security Exchange Name | NYSE | |
4.500% Notes due 2042 [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 4.500% Notes due 2042 | |
Trading Symbol | PM42 | |
Security Exchange Name | NYSE | |
3.875% Notes due 2042 [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 3.875% Notes due 2042 | |
Trading Symbol | PM42A | |
Security Exchange Name | NYSE | |
4.125% Notes due 2043 [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 4.125% Notes due 2043 | |
Trading Symbol | PM43 | |
Security Exchange Name | NYSE | |
4.875% Notes due 2043 [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 4.875% Notes due 2043 | |
Trading Symbol | PM43A | |
Security Exchange Name | NYSE | |
4.250% Notes due 2044 [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 4.250% Notes due 2044 | |
Trading Symbol | PM44 | |
Security Exchange Name | NYSE |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Earnings - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Revenues including excise taxes | $ 20,380 | $ 20,439 | $ 58,072 | $ 59,965 |
Excise taxes on products | 12,738 | 12,935 | 35,980 | 37,839 |
Net revenues | 7,642 | 7,504 | 22,092 | 22,126 |
Cost of sales | 2,605 | 2,618 | 7,735 | 7,977 |
Gross profit | 5,037 | 4,886 | 14,357 | 14,149 |
Marketing, administration and research costs (Notes 8, 19 & 20) | 2,234 | 1,710 | 6,282 | 5,411 |
Amortization of intangibles | 15 | 20 | 50 | 63 |
Operating income | 2,788 | 3,156 | 8,025 | 8,675 |
Interest expense, net | 132 | 145 | 434 | 540 |
Pension and other employee benefit costs (Note 3) | 20 | 7 | 61 | 19 |
Earnings before income taxes | 2,636 | 3,004 | 7,530 | 8,116 |
Provision for income taxes | 635 | 691 | 1,670 | 1,894 |
Equity investments and securities (income)/loss, net | (45) | (28) | (86) | (61) |
Net earnings | 2,046 | 2,341 | 5,946 | 6,283 |
Net earnings attributable to noncontrolling interests | 150 | 94 | 377 | 282 |
Net earnings attributable to PMI | $ 1,896 | $ 2,247 | $ 5,569 | $ 6,001 |
Per share data: | ||||
Basic earnings per share (in dollars per share) | $ 1.22 | $ 1.44 | $ 3.57 | $ 3.85 |
Diluted earnings per share (in dollars per share) | $ 1.22 | $ 1.44 | $ 3.57 | $ 3.85 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Earnings - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Net earnings | $ 2,046 | $ 2,341 | $ 5,946 | $ 6,283 |
Change in currency translation adjustments: | ||||
Unrealized gains (losses), net of income taxes | 12 | (394) | 363 | (939) |
Change in net loss and prior service cost: | ||||
Net gains (losses) and prior service costs, net of income taxes | (2) | 0 | 133 | 0 |
Amortization of net losses, prior service costs and net transition costs and (Gains)/losses transferred to earnings – deconsolidation of RBH, net of income taxes | 61 | 50 | 180 | 150 |
Change in fair value of derivatives accounted for as hedges: | ||||
Gains (losses) recognized, net of income taxes | (14) | 40 | (34) | 29 |
(Gains) losses transferred to earnings, net of income taxes | 13 | (15) | (12) | (9) |
Total other comprehensive earnings (losses) | 70 | (319) | 1,159 | (769) |
Total comprehensive earnings | 2,116 | 2,022 | 7,105 | 5,514 |
Less comprehensive earnings attributable to: | ||||
Noncontrolling interests | 135 | 66 | 391 | 177 |
Comprehensive earnings attributable to PMI | $ 1,981 | $ 1,956 | 6,714 | 5,337 |
Deconsolidation of RBH [Member] | ||||
Change in currency translation adjustments: | ||||
(Gains)/losses transferred to earnings - deconsolidation of RBH, net of income taxes (Note 20) | 502 | 0 | ||
Change in net loss and prior service cost: | ||||
Amortization of net losses, prior service costs and net transition costs and (Gains)/losses transferred to earnings – deconsolidation of RBH, net of income taxes | $ 27 | $ 0 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Earnings (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income taxes on currency translation adjustments | $ (163) | $ 87 | $ (230) | $ 60 |
Income taxes on losses transferred to earnings - deconsolidation of RBH | 0 | 0 | ||
Income taxes on gains (losses) and prior service costs | (2) | 0 | 133 | 0 |
Income taxes on Amortization of net losses, prior service costs and net transition costs and (gains)/losses transferred to earnings – change in net loss and prior service cost | (13) | (9) | (43) | (30) |
Income taxes on gain (losses) recognized on derivatives accounted for as hedges | 2 | (5) | 5 | (4) |
Income taxes on gain (losses) transferred to earnings on derivatives accounted for as hedges | $ 0 | $ 2 | 3 | 2 |
Deconsolidation of RBH [Member] | ||||
Income taxes on Amortization of net losses, prior service costs and net transition costs and (gains)/losses transferred to earnings – change in net loss and prior service cost | $ (15) | $ 0 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
ASSETS | ||
Cash and cash equivalents | $ 6,507 | $ 6,593 |
Trade receivables (less allowances of $27 in 2019 and $25 in 2018) | 3,073 | 2,950 |
Other receivables | 656 | 614 |
Inventories: | ||
Leaf tobacco | 2,081 | 2,318 |
Other raw materials | 1,514 | 1,405 |
Finished product | 4,934 | 5,081 |
Total inventory, net | 8,529 | 8,804 |
Other current assets | 810 | 481 |
Total current assets | 19,575 | 19,442 |
Property, plant and equipment, at cost | 14,164 | 14,557 |
Less: accumulated depreciation | 7,528 | 7,356 |
Total property, plant and equipment, net | 6,636 | 7,201 |
Goodwill (Note 4) | 5,720 | 7,189 |
Other intangible assets, net (Note 4) | 2,088 | 2,278 |
Investments in unconsolidated subsidiaries and equity securities (Notes 11&14) | 4,499 | 1,269 |
Deferred income taxes | 968 | 977 |
Other assets | 1,934 | 1,445 |
TOTAL ASSETS | 41,420 | 39,801 |
LIABILITIES | ||
Short-term borrowings (Note 10) | 355 | 730 |
Current portion of long-term debt (Note 10) | 5,035 | 4,054 |
Accounts payable | 1,704 | 2,068 |
Accrued liabilities: | ||
Marketing and selling | 677 | 732 |
Taxes, except income taxes | 5,130 | 5,088 |
Employment costs | 813 | 794 |
Dividends payable | 1,831 | 1,783 |
Other | 1,777 | 1,366 |
Income taxes | 723 | 576 |
Total current liabilities | 18,045 | 17,191 |
Long-term debt (Note 10) | 26,426 | 26,975 |
Deferred income taxes | 905 | 898 |
Employment costs | 2,859 | 3,083 |
Income taxes and other liabilities | 2,340 | 2,393 |
Total liabilities | 50,575 | 50,540 |
Contingencies (Note 8) | ||
STOCKHOLDERS’ (DEFICIT) EQUITY | ||
Common stock, no par value (2,109,316,331 shares issued in 2019 and 2018) | 0 | 0 |
Additional paid-in capital | 1,981 | 1,939 |
Earnings reinvested in the business | 31,197 | 31,014 |
Accumulated other comprehensive losses | (8,966) | (10,111) |
Total stockholders' equity before treasury stock | 24,212 | 22,842 |
Less: cost of repurchased stock (553,456,284 and 554,736,610 shares in 2019 and 2018, respectively) | 35,222 | 35,301 |
Total PMI stockholders’ deficit | (11,010) | (12,459) |
Noncontrolling interests | 1,855 | 1,720 |
Total stockholders’ deficit | (9,155) | (10,739) |
TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY | $ 41,420 | $ 39,801 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Receivables, allowances | $ 27 | $ 25 |
Common stock, no par value (in dollars per share) | ||
Common stock, shares issued (in shares) | 2,109,316,331 | 2,109,316,331 |
Repurchased stock, shares (in shares) | 553,456,284 | 554,736,610 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | |||
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | ||||
Net earnings | $ 5,946 | $ 6,283 | ||
Adjustments to reconcile net earnings to operating cash flows: | ||||
Depreciation and amortization | 709 | 734 | ||
Deferred income tax (benefit) provision | (124) | (42) | ||
Cash effects of changes in: | ||||
Receivables, net | (506) | 112 | ||
Inventories | (64) | (149) | ||
Accounts payable | (31) | (376) | ||
Accrued liabilities and other current assets | 292 | 621 | ||
Income taxes | (6) | (272) | ||
Pension plan contributions | (89) | (58) | ||
Other | 639 | [1] | 203 | |
Net cash provided by operating activities | 6,766 | 7,056 | ||
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | ||||
Capital expenditures | (696) | (1,102) | ||
Investments in unconsolidated subsidiaries and equity securities | (31) | (41) | ||
Deconsolidation of RBH (Note 20) | (1,346) | [2] | 0 | |
Net investment hedges | 429 | |||
Net investment hedges | (60) | |||
Other | 17 | 39 | ||
Net cash used in investing activities | (1,627) | (1,164) | ||
Short-term borrowing activity by original maturity: | ||||
Net issuances (repayments) - maturities of 90 days or less | (340) | 75 | ||
Issuances - maturities longer than 90 days | 989 | 0 | ||
Repayments - maturities longer than 90 days | (989) | 0 | ||
Long-term debt proceeds | 3,819 | 0 | ||
Long-term debt repaid | (2,971) | (2,483) | ||
Dividends paid | (5,336) | (5,110) | ||
Sale (purchase) of subsidiary shares to/(from) noncontrolling interests (Note 17) | 47 | |||
Sale (purchase) of subsidiary shares to/(from) noncontrolling interests (Note 17) | (82) | |||
Other | (321) | (304) | ||
Net cash used in financing activities | (5,102) | (7,904) | ||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (146) | (551) | ||
Cash, cash equivalents and restricted cash: | ||||
Increase (Decrease) | [3] | (109) | (2,563) | |
Balance at beginning of period | [3] | 6,620 | 8,476 | |
Balance at end of period | [3] | $ 6,511 | $ 5,913 | |
[1] | Includes the Loss on Deconsolidation of RBH ( $239 million ), the Canadian tobacco litigation-related charge ( $194 million ) and the Asset impairment and exit cost charge ( $65 million ) that were included in marketing, administration and research costs in the condensed consolidated statements of earnings for the nine months ended September 30, 2019 . For further details on these charges, see Note 19. Asset Impairment and Exit Costs and Note 20. Deconsolidation of RBH . | |||
[2] | Includes deconsolidation of RBH cash and cash equivalents of $1,323 million and restricted cash of $23 million . | |||
[3] | The amounts for cash and cash equivalents shown above include restricted cash of $4 million and $33 million as of September 30, 2019 and 2018 , respectively, and $27 million and $29 million as of December 31, 2018 , and 2017 , respectively, which were included in other current assets in the condensed consolidated balance sheets. |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Asset impairment and exit costs | $ 22 | $ 0 | $ 65 | $ 0 | |||
Cash divested from deconsolidation | 1,346 | [1] | 0 | ||||
Restricted cash | $ 4 | $ 33 | 4 | $ 33 | $ 27 | $ 29 | |
Marketing Administration And Research Costs [Member] | |||||||
Deconsolidation amount | 239 | ||||||
Cash [Member] | |||||||
Cash divested from deconsolidation | 1,323 | ||||||
Restricted Cash [Member] | |||||||
Cash divested from deconsolidation | 23 | ||||||
Canada [Member] | Cecilia Letourneau & Conseil Quebecois Sur La Tabac Et La Sante and Jean-Yves Blais Cases [Member] | RBH [Member] | Appellate Ruling [Member] | Smoking And Health Class Actions [Member] | |||||||
Amount of litigation charge | $ 194 | ||||||
[1] | Includes deconsolidation of RBH cash and cash equivalents of $1,323 million and restricted cash of $23 million . |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Stockholders' (Deficit) Equity - USD ($) $ in Millions | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Earnings Reinvested in the Business [Member] | Accumulated Other Comprehensive Losses [Member] | Cost of Repurchased Stock [Member] | Noncontrolling Interests [Member] |
Beginning balance at Dec. 31, 2017 | $ (10,230) | $ 0 | $ 1,972 | $ 29,859 | $ (8,535) | $ (35,382) | $ 1,856 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | 6,283 | 6,001 | 282 | ||||
Other comprehensive earnings (losses), net of income taxes | (769) | (660) | (109) | ||||
Issuance of stock awards | 93 | 15 | 78 | ||||
Dividends declared | (5,221) | (5,221) | |||||
Payments to noncontrolling interests | (250) | (250) | |||||
Adoption of new accounting standards | 238 | 238 | |||||
Other | (86) | (81) | (4) | (1) | |||
Ending balance at Sep. 30, 2018 | (9,942) | 0 | 1,906 | 30,877 | (9,199) | (35,304) | 1,778 |
Beginning balance at Jun. 30, 2018 | (10,168) | 0 | 1,893 | 30,406 | (8,908) | (35,306) | 1,747 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | 2,341 | 2,247 | 94 | ||||
Other comprehensive earnings (losses), net of income taxes | (319) | (291) | (28) | ||||
Issuance of stock awards | 13 | 11 | 2 | ||||
Dividends declared | (1,776) | (1,776) | |||||
Payments to noncontrolling interests | (36) | (36) | |||||
Other | 3 | 2 | 1 | ||||
Ending balance at Sep. 30, 2018 | (9,942) | 0 | 1,906 | 30,877 | (9,199) | (35,304) | 1,778 |
Beginning balance at Dec. 31, 2018 | (10,739) | 0 | 1,939 | 31,014 | (10,111) | (35,301) | 1,720 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | 5,946 | 5,569 | 377 | ||||
Other comprehensive earnings (losses), net of income taxes | 1,159 | ||||||
Other comprehensive earnings (losses), excluding deconsolidation entity, net of taxes | 630 | 616 | 14 | ||||
Issuance of stock awards | 123 | 44 | 79 | ||||
Dividends declared | (5,386) | (5,386) | |||||
Payments to noncontrolling interests | (305) | (305) | |||||
Deconsolidation of RBH (Note 20) | 529 | 529 | |||||
Other | 47 | (2) | 49 | ||||
Ending balance at Sep. 30, 2019 | (9,155) | 0 | 1,981 | 31,197 | (8,966) | (35,222) | 1,855 |
Beginning balance at Jun. 30, 2019 | (9,409) | 0 | 1,948 | 31,128 | (9,051) | (35,224) | 1,790 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | 2,046 | 1,896 | 150 | ||||
Other comprehensive earnings (losses), net of income taxes | 70 | 85 | (15) | ||||
Issuance of stock awards | 37 | 35 | 2 | ||||
Dividends declared | (1,827) | (1,827) | |||||
Payments to noncontrolling interests | (74) | (74) | |||||
Other | 2 | (2) | 4 | ||||
Ending balance at Sep. 30, 2019 | $ (9,155) | $ 0 | $ 1,981 | $ 31,197 | $ (8,966) | $ (35,222) | $ 1,855 |
Condensed Consolidated Statem_7
Condensed Consolidated Statements of Stockholders' (Deficit) Equity (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Statement of Stockholders' Equity [Abstract] | ||||
Dividends declared (in dollars per share) | $ 1.17 | $ 1.14 | $ 3.45 | $ 3.35 |
Background and Basis of Present
Background and Basis of Presentation | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Background and Basis of Presentation | Background and Basis of Presentation: Background Philip Morris International Inc. is a holding company incorporated in Virginia, U.S.A., whose subsidiaries and affiliates and their licensees are engaged in the manufacture and sale of cigarettes and other nicotine-containing products, including reduced-risk products, in markets outside of the United States of America. In addition, PMI ships a version of its Platform 1 device and its consumables authorized by the FDA to Altria Group, Inc. for sale in the United States under license. Throughout these financial statements, the term "PMI" refers to Philip Morris International Inc. and its subsidiaries. Reduced-risk products ("RRPs") is the term PMI uses to refer to products that present, are likely to present, or have the potential to present less risk of harm to smokers who switch to these products versus continuing smoking. PMI has a range of RRPs in various stages of development, scientific assessment and commercialization. "Platform 1" is the term PMI uses to refer to PMI’s reduced-risk product that uses a precisely controlled heating device incorporating our IQOS HeatControl technology, into which a specially designed and proprietary tobacco unit is inserted and heated to generate an aerosol. Basis of Presentation The interim condensed consolidated financial statements of PMI are unaudited. These interim condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") and such principles are applied on a consistent basis. It is the opinion of PMI’s management that all adjustments necessary for a fair statement of the interim results presented have been reflected therein. All such adjustments were of a normal recurring nature. Net revenues and net earnings attributable to PMI for any interim period are not necessarily indicative of results that may be expected for the entire year. As of March 22, 2019 , PMI deconsolidated the financial results of its Canadian subsidiary, Rothmans, Benson & Hedges Inc. ("RBH") from PMI's financial statements. For further details, see Note 20. Deconsolidation of RBH . These statements should be read in conjunction with the audited consolidated financial statements and related notes, which appear in PMI’s Annual Report on Form 10-K for the year ended December 31, 2018 . |
Stock Plans
Stock Plans | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock Plans | Stock Plans: In May 2017, PMI’s shareholders approved the Philip Morris International Inc. 2017 Performance Incentive Plan (the “2017 Plan”). Under the 2017 Plan, PMI may grant to eligible employees restricted shares and restricted share units, performance-based cash incentive awards and performance-based equity awards. Up to 25 million shares of PMI’s common stock may be issued under the 2017 Plan. At September 30, 2019 , shares available for grant under the 2017 Plan were 20,117,010 . In May 2017, PMI’s shareholders also approved the Philip Morris International Inc. 2017 Stock Compensation Plan for Non-Employee Directors (the “2017 Non-Employee Directors Plan”). A non-employee director is defined as a member of the PMI Board of Directors who is not a full-time employee of PMI or of any corporation in which PMI owns, directly or indirectly, stock possessing at least 50% of the total combined voting power of all classes of stock entitled to vote in the election of directors in such corporation. Up to 1 million shares of PMI common stock may be awarded under the 2017 Non-Employee Directors Plan. At September 30, 2019 , shares available for grant under the plan were 954,084 . Restricted share unit (RSU) awards During the nine months ended September 30, 2019 and 2018 , shares granted to eligible employees and the weighted-average grant date fair value per share related to RSU awards were as follows: Number of Shares Granted Weighted-Average Grant Date Fair Value Per RSU Award Granted 2019 1,717,230 $ 77.25 2018 1,274,730 $ 100.39 Compensation expense related to RSU awards was as follows: Compensation Expense Related to RSU Awards (in millions) For the Nine Months Ended September 30, For the Three Months Ended September 30, 2019 $ 91 $ 27 2018 $ 88 $ 25 As of September 30, 2019 , PMI had $153 million of total unrecognized compensation cost related to non-vested RSU awards. The cost is recognized over the original restriction period of the awards, which is typically three years after the date of the award, or upon death, disability or reaching the age of 58 . During the nine months ended September 30, 2019 , 1,088,668 RSU awards vested. The grant date fair value of all the vested awards was approximately $97 million . The total fair value of RSU awards that vested during the nine months ended September 30, 2019 was approximately $92 million . Performance share unit (PSU) awards During the nine months ended September 30, 2019 and 2018 , PMI granted PSU awards to certain executives. The PSU awards require the achievement of certain performance factors, which are predetermined at the time of grant, typically over a three -year performance cycle with performance metrics for such PSUs consisting of PMI’s Total Shareholder Return (TSR) relative to a predetermined peer group and on an absolute basis ( 50% weight), PMI’s currency-neutral compound annual adjusted operating income growth rate, excluding acquisitions ( 30% weight), and PMI’s performance against specific measures of PMI’s transformation ( 20% weight). The aggregate of the weighted performance factors for the three metrics determines the percentage of PSUs that will vest at the end of the three -year performance cycle. The minimum percentage of such PSUs that can vest is zero , with a target percentage of 100 and a maximum percentage of 200 . Each such vested PSU entitles the participant to one share of common stock. An aggregate weighted PSU performance factor of 100 will result in the targeted number of PSUs being vested. At the end of the performance cycle, participants are entitled to an amount equivalent to the accumulated dividends paid on common stock during the performance cycle for the number of shares earned. During the nine months ended September 30, 2019 and 2018 , shares granted to eligible employees and the grant date fair value per share related to PSU awards were as follows: Number of Shares Granted PSU Grant Date Fair Value Subject to Other Performance Factors Per Share PSU Grant Date Fair Value Subject to TSR Performance Factor Per Share 2019 647,700 $ 77.23 $ 83.59 2018 401,500 $ 100.69 $ 118.98 The grant date fair value of the PSU awards subject to the other performance factors was determined by using the average of the high and low market price of PMI’s stock at the date of the grant. The grant date fair value of the PSU market based awards subject to the TSR performance factor was determined by using the Monte Carlo simulation model. The following assumptions were used to determine the grant date fair value of the PSU awards subject to the TSR performance factor: 2019 2018 Risk-free interest rate (a) 2.4 % 2.3 % Expected volatility 21.4 % (b) 19.6 % (c) (a) Based on the U.S. Treasury yield curve. (b) Determined using the observed historical volatility. (c) Determined using a weighted-average of historical and implied volatility. Compensation expense related to PSU awards was as follows: Compensation Expense Related to PSU Awards (in millions) For the Nine Months Ended September 30, For the Three Months Ended September 30, 2019 $ 43 $ 10 2018 $ 18 ($ 12 ) As of September 30, 2019 , PMI had $43 million of total unrecognized compensation cost related to non-vested PSU awards. The cost is recognized over the performance cycle of the awards, or upon death, disability or reaching the age of 58 . During the nine months ended September 30, 2019 , 330,616 PSU awards vested. The grant date fair value of all the vested awards was approximately $32 million . The total fair value of PSU awards that vested during the nine months ended September 30, 2019 was approximately $28 million . |
Benefit Plans
Benefit Plans | 9 Months Ended |
Sep. 30, 2019 | |
Retirement Benefits [Abstract] | |
Benefit Plans | Benefit Plans: Pension coverage for employees of PMI’s subsidiaries is provided, to the extent deemed appropriate, through separate plans, many of which are governed by local statutory requirements. In addition, PMI provides health care and other benefits to substantially all U.S. retired employees and certain non-U.S. retired employees. In general, health care benefits for non-U.S. retired employees are covered through local government plans. Pension and other employee benefit costs per the condensed consolidated statements of earnings consisted of the following: For the Nine Months Ended September 30, For the Three Months Ended September 30, (in millions) 2019 2018 2019 2018 Net pension costs (income) $ (16 ) $ (49 ) $ (6 ) $ (16 ) Net postemployment costs 72 59 25 20 Net postretirement costs 5 9 1 3 Total pension and other employee benefit costs $ 61 $ 19 $ 20 $ 7 Pension Plans Components of Net Periodic Benefit Cost Net periodic pension cost consisted of the following: Pension (1) For the Nine Months Ended September 30, For the Three Months Ended September 30, (in millions) 2019 2018 2019 2018 Service cost $ 161 $ 159 $ 54 $ 52 Interest cost 89 87 29 29 Expected return on plan assets (247 ) (272 ) (82 ) (90 ) Amortization: Net loss 142 135 47 45 Prior service cost — 1 — — Net periodic pension cost $ 145 $ 110 $ 48 $ 36 (1) Primarily non-U.S. based defined benefit retirement plans. Employer Contributions PMI makes, and plans to make, contributions, to the extent that they are tax deductible and to meet specific funding requirements of its funded pension plans. Employer contributions of $89 million were made to the pension plans during the nine months ended September 30, 2019 . Currently, PMI anticipates making additional contributions during the remainder of 2019 of approximately $25 million to its pension plans, based on current tax and benefit laws. However, this estimate is subject to change as a result of changes in tax and other benefit laws, as well as asset performance significantly above or below the assumed long-term rate of return on pension assets, or changes in interest and currency rates. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets, net | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets, net | Goodwill and Other Intangible Assets, net: The movements in goodwill were as follows: (in millions) European Union Eastern Europe Middle East & Africa South & Southeast Asia East Asia & Australia Latin America & Canada Total Balances, December 31, 2018 $ 1,357 $ 303 $ 87 $ 2,795 $ 536 $ 2,111 $ 7,189 Changes due to: Currency (61 ) (10 ) (3 ) 50 8 10 (6 ) Deconsolidation of RBH (1,463 ) (1,463 ) Balances, September 30, 2019 $ 1,296 $ 293 $ 84 $ 2,845 $ 544 $ 658 $ 5,720 At September 30, 2019 , goodwill primarily reflects PMI’s acquisitions in Colombia, Greece, Indonesia, Mexico, Pakistan and Serbia, as well as the business combination in the Philippines. For details on the deconsolidation of RBH, see Note 20. Deconsolidation of RBH. Details of other intangible assets were as follows: September 30, 2019 December 31, 2018 (in millions) Weighted-Average Remaining Useful Life Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Non-amortizable intangible assets $ 1,288 $ 1,288 $ 1,269 $ 1,269 Amortizable intangible assets: Trademarks 18 years 1,200 $ 507 693 1,488 $ 608 880 Distribution networks 8 years 110 68 42 141 82 59 Other* 9 years 107 42 65 107 37 70 Total other intangible assets $ 2,705 $ 617 $ 2,088 $ 3,005 $ 727 $ 2,278 * Includes farmer contracts and intellectual property rights Non-amortizable intangible assets substantially consist of trademarks from PMI’s acquisitions in Indonesia and Mexico. The increase since December 31, 2018 was due to currency movements of $19 million . The decrease in the gross carrying amount of amortizable intangible assets from December 31, 2018 was mainly due to the deconsolidation of RBH's trademarks of ( $275 million ) and distribution network of ( $29 million ), combined with currency movements of ( $13 million ). The change in the accumulated amortization from December 31, 2018 was mainly due to the deconsolidation of RBH's trademarks of ( $133 million ) and distribution network of ( $18 million ), currency movements of ( $7 million ), partially offset by the 2019 amortization of $50 million . Amortization expense for each of the next five years is estimated to be $66 million or less, assuming no additional transactions occur that require the amortization of intangible assets. During the second quarter of 2019, PMI completed its annual review of goodwill and non-amortizable intangible assets for potential impairment, and no |
Financial Instruments
Financial Instruments | 9 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Financial Instruments | Financial Instruments: Overview PMI operates in markets outside of the United States of America, with manufacturing and sales facilities in various locations around the world. PMI utilizes certain financial instruments to manage foreign currency and interest rate exposure. Derivative financial instruments are used by PMI principally to reduce exposures to market risks resulting from fluctuations in foreign currency exchange and interest rates by creating offsetting exposures. PMI is not a party to leveraged derivatives and, by policy, does not use derivative financial instruments for speculative purposes. Financial instruments qualifying for hedge accounting must maintain a specified level of effectiveness between the hedging instrument and the item being hedged, both at inception and throughout the hedged period. PMI formally documents the nature and relationships between the hedging instruments and hedged items, as well as its risk-management objectives, strategies for undertaking the various hedge transactions and method of assessing hedge effectiveness. Additionally, for hedges of forecasted transactions, the significant characteristics and expected terms of the forecasted transaction must be specifically identified, and it must be probable that each forecasted transaction will occur. If it were deemed probable that the forecasted transaction would not occur, the gain or loss would be recognized in earnings. PMI uses deliverable and non-deliverable forward foreign exchange contracts, foreign currency swaps and foreign currency options, collectively referred to as foreign exchange contracts ("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. Both foreign exchange contracts and interest rate contracts are collectively referred to as derivative contracts ("derivative contracts"). The primary currencies to which PMI is exposed include the Euro, Swiss franc, Indonesian rupiah, Japanese yen, Mexican peso, Philippine peso and Russian ruble. At September 30, 2019 , PMI had contracts with aggregate notional amounts of $24.3 billion of which $4.0 billion related to cash flow hedges, $11.3 billion related to hedges of net investments in foreign operations and $9.0 billion related to other derivatives that primarily offset currency exposures on intercompany financing. The fair value of PMI’s derivative contracts included in the condensed consolidated balance sheets as of September 30, 2019 and December 31, 2018 , were as follows: Derivative Assets Derivative Liabilities Fair Value Fair Value (in millions) Balance Sheet Classification At September 30, 2019 At December 31, 2018 Balance Sheet Classification At September 30, 2019 At December 31, 2018 Derivative contracts designated as hedging instruments Other current assets $ 342 $ 54 Other accrued liabilities $ 30 $ 47 Other assets 59 99 Income taxes and other liabilities 212 525 Derivative contracts not designated as hedging instruments Other current assets 52 67 Other accrued liabilities 25 46 Other assets — — Income taxes and other liabilities 13 13 Total derivatives $ 453 $ 220 $ 280 $ 631 For the nine months and three months ended September 30, 2019 and 2018 , 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 2019 2018 2019 2018 Derivatives in Cash Flow Hedging Relationship Derivative contracts $ (39 ) $ 33 Net revenues $ 22 $ (5 ) Cost of sales — — Marketing, administration and research costs (3 ) 7 Interest expense, net (4 ) (4 ) Derivatives in Net Investment Hedging Relationship Derivative contracts 564 (7 ) Total $ 525 $ 26 $ 15 $ (2 ) (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 2019 2018 2019 2018 Derivatives in Cash Flow Hedging Relationship Derivative contracts $ (16 ) $ 45 Net revenues $ (7 ) $ 2 Cost of sales — — Marketing, administration and research costs (4 ) 10 Interest expense, net (2 ) (1 ) Derivatives in Net Investment Hedging Relationship Derivative contracts 419 (145 ) Total $ 403 $ (100 ) $ (13 ) $ 11 Cash Flow Hedges PMI has entered into derivative contracts to hedge the foreign currency exchange and interest rate risks related to certain forecasted transactions. Gains and losses associated with qualifying cash flow hedge contracts is deferred as a component of accumulated other comprehensive losses until the underlying hedged transactions are reported in PMI’s condensed consolidated statements of earnings. As of September 30, 2019 , PMI has hedged forecasted transactions for periods not exceeding the next fifteen months with the exception of one derivative contract that expires in May 2024. The impact of these hedges is primarily included in operating cash flows on PMI’s condensed consolidated statements of cash flows. Hedges of Net Investments in Foreign Operations PMI designates certain foreign currency denominated debt and derivative contracts as net investment hedges, primarily of its Euro net assets. For the nine months ended September 30, 2019 and 2018 , these hedges of net investments resulted in gains (losses), net of income taxes, of $771 million and $111 million , respectively, principally related to changes in the exchange rates between the Euro and U.S. dollar. For the three months ended September 30, 2019 and 2018 , these hedges of net investments resulted in gains (losses), net of income taxes, of $598 million and $(192) million , respectively, principally related to changes in the exchange rates between the Euro and U.S. dollar. These gains (losses) were reported as a component of accumulated other comprehensive losses within currency translation adjustments, and were substantially offset by the losses and gains generated on the underlying assets. For the nine months ended September 30, 2019 and 2018 , the gains for amounts excluded from the effectiveness testing recognized in earnings were $171 million and $198 million , respectively. For the three months ended September 30, 2019 and 2018 , the gains for amounts excluded from the effectiveness testing recognized in earnings were $54 million and $63 million , respectively. These gains were accounted for in interest expense, net, on the condensed consolidated statement of earnings. The premiums paid for, and settlements of, net investment hedges are included in investing cash flows on PMI’s condensed consolidated statements of cash flows. Other Derivatives PMI has entered into derivative contracts to hedge the foreign currency exchange and interest rate risks related to intercompany loans between certain subsidiaries, and third-party loans. While effective as economic hedges, no hedge accounting is applied for these contracts; therefore, the unrealized gains (losses) relating to these contracts are reported in marketing, administration and research costs in PMI’s condensed consolidated statements of earnings. For the nine months ended September 30, 2019 and 2018 , the gains (losses) from contracts for which PMI did not apply hedge accounting were $25 million and $244 million , respectively. For the three months ended September 30, 2019 and 2018 , the gains (losses) from contracts for which PMI did not apply hedge accounting were $86 million and $(90) million , respectively. The gains (losses) from these contracts substantially offset the losses and gains generated by the underlying intercompany and third-party loans being hedged. For the nine months and three months ended September 30, 2019 and 2018 , these items impacted the consolidated statement of earnings as follows: (pre-tax, in millions) For the Three Months Ended September 30, Derivatives not Designated Statement of Earnings Amount of Gain/(Loss) For the Nine Months Ended September 30, For the Three Months Ended September 30, 2019 2018 2019 2018 Derivative contracts Interest expense, net $ 79 $ 30 $ 31 $ 20 Total $ 79 $ 30 $ 31 $ 20 Qualifying Hedging Activities Reported in Accumulated Other Comprehensive Losses Derivative gains or losses reported in accumulated other comprehensive losses are a result of qualifying hedging activity. Transfers of these gains or losses to earnings are offset by the corresponding gains or losses on the underlying hedged item. 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, 2019 2018 2019 2018 Gain/(loss) at beginning of period $ 35 $ 42 $ (10 ) $ 37 Derivative (gains)/losses transferred to earnings (12 ) (9 ) 13 (15 ) Change in fair value (34 ) 29 (14 ) 40 Gain/(loss) as of September 30, $ (11 ) $ 62 $ (11 ) $ 62 At September 30, 2019 , PMI expects $4 million of derivative gains that are included in accumulated other comprehensive losses to be reclassified to the condensed consolidated statement of earnings within the next 12 months. These gains are expected to be substantially offset by the statement of earnings impact of the respective hedged transactions. Contingent Features PMI’s derivative instruments do not contain contingent features. Credit Exposure and Credit Risk PMI is exposed to credit loss in the event of non-performance by counterparties. While PMI does not anticipate non-performance, its risk is limited to the fair value of the financial instruments less any cash collateral received or pledged. PMI actively monitors its exposure to credit risk through the use of credit approvals and credit limit and by selecting and continuously monitoring a diverse group of major international banks and financial institutions as counterparties. Fair Value See Note 11. Fair Value Measurements and Note 13. Balance Sheet Offsetting for additional discussion of derivative financial instruments. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share: Basic and diluted earnings per share (“EPS”) were calculated using the following: (in millions) For the Nine Months Ended September 30, For the Three Months Ended September 30, 2019 2018 2019 2018 Net earnings attributable to PMI $ 5,569 $ 6,001 $ 1,896 $ 2,247 Less distributed and undistributed earnings attributable to share-based payment awards 13 13 5 5 Net earnings for basic and diluted EPS $ 5,556 $ 5,988 $ 1,891 $ 2,242 Weighted-average shares for basic EPS 1,556 1,555 1,556 1,555 Plus contingently issuable performance stock units (PSUs) — — — — Weighted-average shares for diluted EPS 1,556 1,555 1,556 1,555 Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents are participating securities and therefore are included in PMI’s earnings per share calculation pursuant to the two-class method. For the 2019 and 2018 computations, there were no antidilutive stock awards. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting: PMI’s subsidiaries and affiliates are engaged in the manufacture and sale of cigarettes and other nicotine-containing products, including RRPs, in markets outside of the United States of America. In addition, PMI ships a version of its Platform 1 device and its consumables authorized by the FDA to Altria Group, Inc. for sale in the United States under license. Reportable segments for PMI are organized by geographic region and managed by segment managers who are responsible for the operating and financial results of the regions inclusive of all product categories sold in the region. PMI’s reportable segments are the European Union; Eastern Europe; Middle East & Africa; South & Southeast Asia; East Asia & Australia; and Latin America & Canada. PMI records net revenues and operating income to its segments based upon the geographic area in which the customer resides. Revenues from shipments of the Platform 1 device, heated tobacco units and accessories to Altria Group, Inc. for sale under license in the United States are included in Net Revenues of the Latin America & Canada segment. PMI’s chief operating decision maker evaluates segment performance and allocates resources based on regional operating income, which includes results from all product categories sold in each region. PMI disaggregates its net revenue from contracts with customers by both geographic location and product category for each of PMI's six reportable segments, as PMI believes this best depicts how the nature, amount, timing and uncertainty of its revenue and cash flows are affected by economic factors. Segment data were as follows: (in millions) For the Nine Months Ended September 30, For the Three Months Ended September 30, 2019 2018 2019 2018 Net revenues: European Union $ 7,381 $ 6,958 $ 2,645 $ 2,467 Eastern Europe 2,300 2,105 899 778 Middle East & Africa 3,058 3,126 1,127 1,143 South & Southeast Asia 3,607 3,434 1,246 1,197 East Asia & Australia 4,094 4,235 1,252 1,166 Latin America & Canada 1,652 2,268 473 753 Net revenues $ 22,092 $ 22,126 $ 7,642 $ 7,504 Operating income (loss): European Union $ 3,346 $ 3,096 $ 1,255 $ 1,179 Eastern Europe 284 682 (101 ) 270 Middle East & Africa 1,304 1,268 519 491 South & Southeast Asia 1,471 1,324 539 455 East Asia & Australia 1,520 1,439 451 426 Latin America & Canada 100 866 125 335 Operating income $ 8,025 $ 8,675 $ 2,788 $ 3,156 Items affecting the comparability of results from operations were as follows: • Russia excise and VAT audit charge - See Note 8. Contingencies for details of the $374 million pre-tax charge included in the Eastern Europe segment for the nine months and three months ended September 30, 2019 . • Asset impairment and exit costs - See Note 19. Asset Impairment and Exit Costs for a breakdown of these costs by segment. • Canadian tobacco litigation-related expense - See Note 8. Contingencies and Note 20. Deconsolidation of RBH for details of the $194 million pre-tax charge included in the Latin America & Canada segment for the nine months ended September 30, 2019 . • Loss on deconsolidation of RBH - See Note 20. Deconsolidation of RBH for details of the $239 million loss included in the Latin America & Canada segment for the nine months ended September 30, 2019 . PMI's net revenues by product category were as follows: (in millions) For the Nine Months Ended September 30, For the Three Months Ended September 30, 2019 2018 2019 2018 Net revenues: Combustible products: European Union $ 6,139 $ 6,381 $ 2,178 $ 2,225 Eastern Europe 1,774 1,926 664 705 Middle East & Africa 2,810 2,813 1,064 1,019 South & Southeast Asia 3,607 3,434 1,246 1,197 East Asia & Australia 2,074 2,348 680 789 Latin America & Canada 1,634 2,254 466 748 Total combustible products $ 18,039 $ 19,156 $ 6,298 $ 6,681 Reduced-risk products: European Union $ 1,242 $ 577 $ 467 $ 242 Eastern Europe 526 179 235 73 Middle East & Africa 248 313 63 124 South & Southeast Asia — — — — East Asia & Australia 2,020 1,887 572 377 Latin America & Canada 18 14 7 5 Total reduced-risk products $ 4,053 $ 2,970 $ 1,344 $ 823 Total PMI net revenues $ 22,092 $ 22,126 $ 7,642 $ 7,504 Note: Sum of product categories or Regions might not foot to total PMI due to roundings. Net revenues related to combustible products refer to the operating revenues generated from the sale of these products, including shipping and handling charges billed to customers, net of sales and promotion incentives, and excise taxes. These net revenue amounts consist of the sale of PMI's cigarettes and other tobacco products combined. Other tobacco products primarily include roll-your-own and make-your-own cigarettes, pipe tobacco, cigars and cigarillos and do not include reduced-risk products. Net revenues related to reduced-risk products refer to the operating revenues generated from the sale of these products, including shipping and handling charges billed to customers, net of sales and promotion incentives, and excise taxes. These net revenue amounts consist of the sale of PMI's heated tobacco units, IQOS devices and related accessories, and other nicotine-containing products, which primarily include PMI's e-vapor products. |
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies: Tobacco-Related Litigation Legal proceedings covering a wide range of matters are pending or threatened against us, and/or our subsidiaries, and/or our indemnitees in various jurisdictions. Our indemnitees include distributors, licensees, and others that have been named as parties in certain cases and that we have agreed to defend, as well as to pay costs and some or all of judgments, if any, that may be entered against them. Pursuant to the terms of the Distribution Agreement between Altria Group, Inc. (“Altria”) and PMI, PMI will indemnify Altria and Philip Morris USA Inc. (“PM USA”), a U.S. tobacco subsidiary of Altria, for tobacco product claims based in substantial part on products manufactured by PMI or contract manufactured for PMI by PM USA, and PM USA will indemnify PMI for tobacco product claims based in substantial part on products manufactured by PM USA, excluding tobacco products contract manufactured for PMI. It is possible that there could be adverse developments in pending cases against us and our subsidiaries. An unfavorable outcome or settlement of pending tobacco-related litigation could encourage the commencement of additional litigation. Damages claimed in some of the tobacco-related litigation are significant and, in certain cases in Brazil, Canada and Nigeria, range into the billions of U.S. dollars. The variability in pleadings in multiple jurisdictions, together with the actual experience of management in litigating claims, demonstrate that the monetary relief that may be specified in a lawsuit bears little relevance to the ultimate outcome. Much of the tobacco-related litigation is in its early stages, and litigation is subject to uncertainty. However, as discussed below, we have to date been largely successful in defending tobacco-related litigation. We and our subsidiaries record provisions in the consolidated financial statements for pending litigation when we determine that an unfavorable outcome is probable and the amount of the loss can be reasonably estimated. At the present time, except as stated otherwise in this Note 8. Contingencies , while it is reasonably possible that an unfavorable outcome in a case may occur, after assessing the information available to it (i) management has not concluded that it is probable that a loss has been incurred in any of the pending tobacco-related cases; (ii) management is unable to estimate the possible loss or range of loss for any of the pending tobacco-related cases; and (iii) accordingly, no estimated loss has been accrued in the consolidated financial statements for unfavorable outcomes in these cases, if any. Legal defense costs are expensed as incurred. It is possible that our consolidated results of operations, cash flows or financial position could be materially affected in a particular fiscal quarter or fiscal year by an unfavorable outcome or settlement of certain pending litigation. Nevertheless, although litigation is subject to uncertainty, we and each of our subsidiaries named as a defendant believe, and each has been so advised by counsel handling the respective cases, that we have valid defenses to the litigation pending against us, as well as valid bases for appeal of adverse verdicts. All such cases are, and will continue to be, vigorously defended. However, we and our subsidiaries may enter into settlement discussions in particular cases if we believe it is in our best interests to do so. CCAA Proceedings and Stay of Tobacco-Related Cases Pending in Canada As a result of the Court of Appeal of Quebec’s decision in both the Létourneau and Blais cases described below, our subsidiary, Rothmans, Benson & Hedges Inc. (“RBH”), and the other defendants, JTI Macdonald Corp., and Imperial Tobacco Canada Limited, sought protection in the Ontario Superior Court of Justice under the Companies’ Creditors Arrangement Act (“CCAA”) on March 22, March 8, and March 12, respectively. CCAA is a Canadian federal law that permits a Canadian business to restructure its affairs while carrying on its business in the ordinary course. The initial CCAA order made by the Ontario Superior Court on March 22, 2019 authorizes RBH to pay all expenses incurred in carrying on its business in the ordinary course after the CCAA filing, including obligations to employees, vendors, and suppliers. As further described in Note 20. Deconsolidation of RBH , RBH is now deconsolidated from our consolidated financial statements. As part of the CCAA proceedings, there is currently a comprehensive stay up to and including March 12, 2020 of all tobacco-related litigation pending in Canada against RBH and the other defendants, including PMI and our indemnitees (PM USA and Altria), namely, the smoking and health class actions filed in various Canadian provinces and health care cost recovery actions. These proceedings are presented below under the caption “ Stayed Litigation — Canada .” Ernst & Young Inc. has been appointed as monitor of RBH in the CCAA proceedings. In accordance with the CCAA process, as the parties work towards a plan of arrangement or compromise, it is anticipated that the court will set additional hearings and further extend the stay of proceedings. On April 17, 2019, the Ontario Superior Court ruled that RBH and the other defendants will not be allowed to file an application to the Supreme Court of Canada for leave to appeal the Court of Appeal’s decision in the Létourneau and the Blais cases so long as the comprehensive stay of all tobacco-related litigation in Canada remains in effect and that the time period to file the application would be extended by the stay period. While RBH believes that the findings of liability and damages in both Létourneau and the Blais cases were incorrect, the CCAA proceedings will provide a forum for RBH to seek resolution through a plan of arrangement or compromise of all tobacco-related litigation pending in Canada. It is not possible to predict the resolution of the underlying legal proceedings or the length of the CCAA process. Stayed Litigation — Canada Smoking and Health Litigation — Canada In the first class action pending in Canada, Conseil Québécois Sur Le Tabac Et La Santé and Jean-Yves Blais v. Imperial Tobacco Ltd., Rothmans, Benson & Hedges Inc. and JTI-Macdonald Corp., Quebec Superior Court, Canada , filed in November 1998, RBH and other Canadian manufacturers (Imperial Tobacco Canada Ltd. and JTI-Macdonald Corp.) are defendants. The plaintiffs, an anti-smoking organization and an individual smoker, sought compensatory and punitive damages for each member of the class who allegedly suffers from certain smoking-related diseases. The class was certified in 2005. The trial court issued its judgment on May 27, 2015. The trial court found RBH and two other Canadian manufacturers liable and found that the class members’ compensatory damages totaled approximately CAD 15.5 billion , including pre-judgment interest (approximately $11.8 billion ). The trial court awarded compensatory damages on a joint and several liability basis, allocating 20% to our subsidiary (approximately CAD 3.1 billion , including pre-judgment interest (approximately $2.36 billion )). In addition, the trial court awarded CAD 90,000 (approximately $68,530 ) in punitive damages, allocating CAD 30,000 (approximately $22,840 ) to RBH. The trial court estimated the disease class at 99,957 members. RBH appealed to the Court of Appeal of Quebec. In October 2015, the Court of Appeal ordered RBH to furnish security totaling CAD 226 million (approximately $172.1 million ) to cover both the Létourneau and Blais cases, which RBH has paid in installments through March 2017. The Court of Appeal ordered Imperial Tobacco Canada Ltd. to furnish security totaling CAD 758 million (approximately $577.2 million ) in installments through June 2017. JTI Macdonald Corp. was not required to furnish security in accordance with plaintiffs’ motion. The Court of Appeal ordered that the security is payable upon a final judgment of the Court of Appeal affirming the trial court’s judgment or upon further order of the Court of Appeal. On March 1, 2019, the Court of Appeal issued a decision largely affirming the trial court’s findings of liability and the compensatory and punitive damages award while reducing the total amount of compensatory damages to approximately CAD 13.5 billion including interest (approximately $10.3 billion ) due to the trial court’s error in the calculation of interest. The compensatory damages award is on a joint and several basis with an allocation of 20% to RBH (approximately CAD 2.7 billion , including pre-judgment interest (approximately $2.06 billion )). The Court of Appeal upheld the trial court’s findings that defendants violated the Civil Code of Quebec, the Quebec Charter of Human Rights and Freedoms, and the Quebec Consumer Protection Act by failing to warn adequately of the dangers of smoking and by conspiring to prevent consumers from learning of the dangers of smoking. The Court of Appeal further held that the plaintiffs either need not prove, or had adequately proven, that these faults were a cause of the class members’ injuries. In accordance with the judgment, defendants are required to deposit their respective portions of the damages awarded in both the Létourneau case described below and the Blais case, approximately CAD 1.1 billion (approximately $837.6 million ), into trust accounts within 60 days . RBH’s share of the deposit is approximately CAD 257 million (approximately $195.7 million ). PMI recorded a pre-tax charge of $194 million in its consolidated results, representing $142 million net of tax, as tobacco litigation-related expense, in the first quarter of 2019. The charge reflects PMI’s assessment of the portion of the judgment that represents probable and estimable loss prior to the deconsolidation of RBH and corresponds to the trust account deposit required by the judgment. In the second class action pending in Canada, Cecilia Létourneau v. Imperial Tobacco Ltd., Rothmans, Benson & Hedges Inc. and JTI-Macdonald Corp., Quebec Superior Court, Canada, filed in September 1998, RBH and other Canadian manufacturers (Imperial Tobacco Canada Ltd. and JTI-Macdonald Corp.) are defendants. The plaintiff, an individual smoker, sought compensatory and punitive damages for each member of the class who is deemed addicted to smoking. The class was certified in 2005. The trial court issued its judgment on May 27, 2015. The trial court found RBH and two other Canadian manufacturers liable and awarded a total of CAD 131 million (approximately $99.8 million ) in punitive damages, allocating CAD 46 million (approximately $35.0 million ) to RBH. The trial court estimated the size of the addiction class at 918,000 members but declined to award compensatory damages to the addiction class because the evidence did not establish the claims with sufficient accuracy. The trial court found that a claims process to allocate the awarded punitive damages to individual class members would be too expensive and difficult to administer. On March 1, 2019, the Court of Appeal issued a decision largely affirming the trial court’s findings of liability and the total amount of punitive damages awarded allocating CAD 57 million including interest (approximately $43.4 million ) to RBH. See the Blais description above and Note 20. Deconsolidation of RBH below for further detail concerning the security order pertaining to both Létourneau and Blais cases and the impact of the decision on PMI’s financial statements. RBH and PMI believe the findings of liability and damages in both Létourneau and the Blais cases were incorrect and in contravention of applicable law on several grounds including the following: (i) defendants had no obligation to warn class members who knew, or should have known, of the risks of smoking; (ii) defendants cannot be liable to class members who would have smoked regardless of what warnings were given; and (iii) defendants cannot be liable to all class members given the individual differences between class members. In the third class action pending in Canada, Kunta v. Canadian Tobacco Manufacturers' Council, et al., The Queen's Bench, Winnipeg, Canada , filed June 12, 2009, we, RBH, and our indemnitees (PM USA and Altria), and other members of the industry are defendants. The plaintiff, an individual smoker, alleges her own addiction to tobacco products and chronic obstructive pulmonary disease (“COPD”), severe asthma, and mild reversible lung disease resulting from the use of tobacco products. She is seeking compensatory and punitive damages on behalf of a proposed class comprised of all smokers, their estates, dependents and family members, as well as restitution of profits, and reimbursement of government health care costs allegedly caused by tobacco products. In the fourth class action pending in Canada, Adams v. Canadian Tobacco Manufacturers' Council, et al., The Queen's Bench, Saskatchewan, Canada , filed July 10, 2009, we, RBH, and our indemnitees (PM USA and Altria), and other members of the industry are defendants. The plaintiff, an individual smoker, alleges her own addiction to tobacco products and COPD resulting from the use of tobacco products. She is seeking compensatory and punitive damages on behalf of a proposed class comprised of all smokers who have smoked a minimum of 25,000 cigarettes and have allegedly suffered, or suffer, from COPD, emphysema, heart disease, or cancer, as well as restitution of profits. In the fifth class action pending in Canada, Semple v. Canadian Tobacco Manufacturers' Council, et al., The Supreme Court (trial court), Nova Scotia, Canada , filed June 18, 2009, we, RBH, and our indemnitees (PM USA and Altria), and other members of the industry are defendants. The plaintiff, an individual smoker, alleges his own addiction to tobacco products and COPD resulting from the use of tobacco products. He is seeking compensatory and punitive damages on behalf of a proposed class comprised of all smokers, their estates, dependents and family members, as well as restitution of profits, and reimbursement of government health care costs allegedly caused by tobacco products. In the sixth class action pending in Canada, Dorion v. Canadian Tobacco Manufacturers' Council, et al., The Queen's Bench, Alberta, Canada, filed June 15, 2009, we, RBH, and our indemnitees (PM USA and Altria), and other members of the industry are defendants. The plaintiff, an individual smoker, alleges her own addiction to tobacco products and chronic bronchitis and severe sinus infections resulting from the use of tobacco products. She is seeking compensatory and punitive damages on behalf of a proposed class comprised of all smokers, their estates, dependents and family members, restitution of profits, and reimbursement of government health care costs allegedly caused by tobacco products. To date, we, our subsidiaries, and our indemnitees have not been properly served with the complaint. In the seventh class action pending in Canada, McDermid v. Imperial Tobacco Canada Limited, et al., Supreme Court, British Columbia, Canada , filed June 25, 2010, we, RBH, and our indemnitees (PM USA and Altria), and other members of the industry are defendants. The plaintiff, an individual smoker, alleges his own addiction to tobacco products and heart disease resulting from the use of tobacco products. He is seeking compensatory and punitive damages on behalf of a proposed class comprised of all smokers who were alive on June 12, 2007, and who suffered from heart disease allegedly caused by smoking, their estates, dependents and family members, plus disgorgement of revenues earned by the defendants from January 1, 1954, to the date the claim was filed. In the eighth class action pending in Canada, Bourassa v. Imperial Tobacco Canada Limited, et al., Supreme Court, British Columbia, Canada , filed June 25, 2010, we, RBH, and our indemnitees (PM USA and Altria), and other members of the industry are defendants. The plaintiff, the heir to a deceased smoker, alleges that the decedent was addicted to tobacco products and suffered from emphysema resulting from the use of tobacco products. She is seeking compensatory and punitive damages on behalf of a proposed class comprised of all smokers who were alive on June 12, 2007, and who suffered from chronic respiratory diseases allegedly caused by smoking, their estates, dependents and family members, plus disgorgement of revenues earned by the defendants from January 1, 1954, to the date the claim was filed. In December 2014, plaintiff filed an amended statement of claim. In the ninth class action pending in Canada, Suzanne Jacklin v. Canadian Tobacco Manufacturers' Council, et al., Ontario Superior Court of Justice, filed June 20, 2012, we, RBH, and our indemnitees (PM USA and Altria), and other members of the industry are defendants. The plaintiff, an individual smoker, alleges her own addiction to tobacco products and COPD resulting from the use of tobacco products. She is seeking compensatory and punitive damages on behalf of a proposed class comprised of all smokers who have smoked a minimum of 25,000 cigarettes and have allegedly suffered, or suffer, from COPD, heart disease, or cancer, as well as restitution of profits. Health Care Cost Recovery Litigation — Canada In the first health care cost recovery case pending in Canada, Her Majesty the Queen in Right of British Columbia v. Imperial Tobacco Limited, et al., Supreme Court, British Columbia, Vancouver Registry, Canada, filed January 24, 2001, we, RBH, our indemnitee (PM USA), and other members of the industry are defendants. The plaintiff, the government of the province of British Columbia, brought a claim based upon legislation enacted by the province authorizing the government to file a direct action against cigarette manufacturers to recover the health care costs it has incurred, and will incur, resulting from a “tobacco related wrong.” In the second health care cost recovery case filed in Canada, Her Majesty the Queen in Right of New Brunswick v. Rothmans Inc., et al., Court of Queen's Bench of New Brunswick, Trial Court, New Brunswick, Fredericton, Canada, filed March 13, 2008, we, RBH, our indemnitees (PM USA and Altria), and other members of the industry are defendants. The claim was filed by the government of the province of New Brunswick based on legislation enacted in the province. This legislation is similar to the law introduced in British Columbia that authorizes the government to file a direct action against cigarette manufacturers to recover the health care costs it has incurred, and will incur, as a result of a “tobacco related wrong.” In the third health care cost recovery case filed in Canada, Her Majesty the Queen in Right of Ontario v. Rothmans Inc., et al., Ontario Superior Court of Justice, Toronto, Canada , filed September 29, 2009, we, RBH, our indemnitees (PM USA and Altria), and other members of the industry are defendants. The claim was filed by the government of the province of Ontario based on legislation enacted in the province. This legislation is similar to the laws introduced in British Columbia and New Brunswick that authorize the government to file a direct action against cigarette manufacturers to recover the health care costs it has incurred, and will incur, as a result of a “tobacco related wrong.” In the fourth health care cost recovery case filed in Canada, Attorney General of Newfoundland and Labrador v. Rothmans Inc., et al., Supreme Court of Newfoundland and Labrador, St. Johns, Canada , filed February 8, 2011, we, RBH, our indemnitees (PM USA and Altria), and other members of the industry are defendants. The claim was filed by the government of the province of Newfoundland and Labrador based on legislation enacted in the province that is similar to the laws introduced in British Columbia, New Brunswick and Ontario. The legislation authorizes the government to file a direct action against cigarette manufacturers to recover the health care costs it has incurred, and will incur, as a result of a “tobacco related wrong.” In the fifth health care cost recovery case filed in Canada, Attorney General of Quebec v. Imperial Tobacco Limited, et al., Superior Court of Quebec, Canada , filed June 8, 2012, we, RBH, our indemnitee (PM USA), and other members of the industry are defendants. The claim was filed by the government of the province of Quebec based on legislation enacted in the province that is similar to the laws enacted in several other Canadian provinces. The legislation authorizes the government to file a direct action against cigarette manufacturers to recover the health care costs it has incurred, and will incur, as a result of a “tobacco related wrong.” In the sixth health care cost recovery case filed in Canada, Her Majesty in Right of Alberta v. Altria Group, Inc., et al., Supreme Court of Queen's Bench Alberta, Canada , filed June 8, 2012, we, RBH, our indemnitees (PM USA and Altria), and other members of the industry are defendants. The claim was filed by the government of the province of Alberta based on legislation enacted in the province that is similar to the laws enacted in several other Canadian provinces. The legislation authorizes the government to file a direct action against cigarette manufacturers to recover the health care costs it has incurred, and will incur, as a result of a “tobacco related wrong.” In the seventh health care cost recovery case filed in Canada, Her Majesty the Queen in Right of the Province of Manitoba v. Rothmans, Benson & Hedges, Inc., et al., The Queen's Bench, Winnipeg Judicial Centre, Canada , filed May 31, 2012, we, RBH, our indemnitees (PM USA and Altria), and other members of the industry are defendants. The claim was filed by the government of the province of Manitoba based on legislation enacted in the province that is similar to the laws enacted in several other Canadian provinces. The legislation authorizes the government to file a direct action against cigarette manufacturers to recover the health care costs it has incurred, and will incur, as a result of a “tobacco related wrong.” In the eighth health care cost recovery case filed in Canada, The Government of Saskatchewan v. Rothmans, Benson & Hedges Inc., et al., Queen's Bench, Judicial Centre of Saskatchewan, Canada , filed June 8, 2012, we, RBH, our indemnitees (PM USA and Altria), and other members of the industry are defendants. The claim was filed by the government of the province of Saskatchewan based on legislation enacted in the province that is similar to the laws enacted in several other Canadian provinces. The legislation authorizes the government to file a direct action against cigarette manufacturers to recover the health care costs it has incurred, and will incur, as a result of a “tobacco related wrong.” In the ninth health care cost recovery case filed in Canada, Her Majesty the Queen in Right of the Province of Prince Edward Island v. Rothmans, Benson & Hedges Inc., et al., Supreme Court of Prince Edward Island (General Section), Canada , filed September 10, 2012, we, RBH, our indemnitees (PM USA and Altria), and other members of the industry are defendants. The claim was filed by the government of the province of Prince Edward Island based on legislation enacted in the province that is similar to the laws enacted in several other Canadian provinces. The legislation authorizes the government to file a direct action against cigarette manufacturers to recover the health care costs it has incurred, and will incur, as a result of a “tobacco related wrong.” In the tenth health care cost recovery case filed in Canada, Her Majesty the Queen in Right of the Province of Nova Scotia v. Rothmans, Benson & Hedges Inc., et al., Supreme Court of Nova Scotia, Canada , filed January 2, 2015, we, RBH, our indemnitees (PM USA and Altria), and other members of the industry are defendants. The claim was filed by the government of the province of Nova Scotia based on legislation enacted in the province that is similar to the laws enacted in several other Canadian provinces. The legislation authorizes the government to file a direct action against cigarette manufacturers to recover the health care costs it has incurred, and will incur, as a result of a “tobacco related wrong.” __________ The table below lists the number of tobacco-related cases pertaining to combustible products pending against us and/or our subsidiaries or indemnitees as of October 22, 2019 , October 23, 2018 and October 23, 2017 :¹ Type of Case Number of Cases Pending as of October 22, 2019 Number of Cases Pending as of October 23, 2018 Number of Cases Pending as of October 23, 2017 Individual Smoking and Health Cases 49 63 65 Smoking and Health Class Actions 10 10 11 Health Care Cost Recovery Actions 17 16 16 Label-Related Class Actions — 1 1 Individual Label-Related Cases 5 1 1 Public Civil Actions 2 2 2 Since 1995, when the first tobacco-related litigation was filed against a PMI entity, 500 Smoking and Health, Label-Related, Health Care Cost Recovery, and Public Civil Actions in which we and/or one of our subsidiaries and/or indemnitees were a defendant have been terminated in our favor. Thirteen cases have had decisions in favor of plaintiffs. Nine of these cases have subsequently reached final resolution in our favor and four remain on appeal. The table below lists the verdict and significant post-trial developments in the four pending cases where a verdict was returned in favor of the plaintiff: Date Location of Type of Verdict Post-Trial February 2004 Brazil/The Smoker Health Defense Association Class Action The Civil Court of São Paulo found defendants liable without hearing evidence. In April 2004, the court awarded “moral damages” of R$1,000 (approximately $243) per smoker per full year of smoking plus interest at the rate of 1% per month, as of the date of the ruling. The court did not assess actual damages, which were to be assessed in a second phase of the case. The size of the class was not defined in the ruling. Defendants appealed to the São Paulo Court of Appeals, which annulled the ruling in November 2008, finding that the trial court had inappropriately ruled without hearing evidence and returned the case to the trial court for further proceedings. In May 2011, the trial court dismissed the claim. In March 2017, plaintiff filed an en banc appeal to the Superior Court of Justice. In addition, the defendants filed a constitutional appeal to the Federal Supreme Tribunal on the basis that plaintiff did not have standing to bring the lawsuit. Both appeals are still pending. ______ ¹ Includes cases pending in Canada. Date Location of Type of Verdict Post-Trial May 27, 2015 Canada/Conseil Québécois Sur Le Tabac Et La Santé and Jean-Yves Blais Class Action On May 27, 2015, the Superior Court of the District of Montreal, Province of Quebec ruled in favor of the Blais class on liability and found the class members’ compensatory damages totaled approximately CAD 15.5 billion (approximately $11.8 billion), including pre-judgment interest. The trial court awarded compensatory damages on a joint and several liability basis, allocating 20% to our subsidiary (approximately CAD 3.1 billion including pre-judgment interest (approximately $2.36 billion)). The trial court awarded CAD 90,000 (approximately $68,530) in punitive damages, allocating CAD 30,000 (approximately $22,840) to our subsidiary. The trial court ordered defendants to pay CAD 1 billion (approximately $761.5 million) of the compensatory damage award, CAD 200 million (approximately $152.3 million) of which is our subsidiary’s portion, into a trust within 60 days. In June 2015, RBH commenced the appellate process with the Court of Appeal of Quebec. On March 1, 2019, the Court of Appeal issued a decision largely affirming the trial court's decision. (See “ Stayed Litigation — Canada ” for further detail.) Date Location of Type of Verdict Post-Trial May 27, 2015 Canada/Cecilia Létourneau Class Action On May 27, 2015, the Superior Court of the District of Montreal, Province of Quebec ruled in favor of the Létourneau class on liability and awarded a total of CAD 131 million (approximately $99.8 million) in punitive damages, allocating CAD 46 million (approximately $35.0 million) to RBH. The trial court ordered defendants to pay the full punitive damage award into a trust within 60 days. The court did not order the payment of compensatory damages. In June 2015, RBH commenced the appellate process with the Court of Appeal of Quebec. On March 1, 2019, the Court of Appeal issued a decision largely affirming the trial court's decision. (See “ Stayed Litigation — Canada ” for further detail.) Date Location of Type of Verdict Post-Trial August 5, 2016 Argentina/Hugo Lespada Individual Action On August 5, 2016, the Civil Court No. 14 - Mar del Plata, issued a verdict in favor of plaintiff, an individual smoker, and awarded him ARS 110,000 (approximately $1,887), plus interest, in compensatory and moral damages. The trial court found that our subsidiary failed to warn plaintiff of the risk of becoming addicted to cigarettes. On August 23, 2016, our subsidiary filed its notice of appeal. On October 31, 2017, the Civil and Commercial Court of Appeals of Mar del Plata ruled that plaintiff's claim was barred by the statute of limitations and it reversed the trial court's decision. On November 28, 2017, plaintiff filed an extraordinary appeal of the reversal of the trial court's decision to the Supreme Court of the Province of Buenos Aires. Pending claims related to tobacco products generally fall within the following categories: Smoking and Health Litigation: These cases primarily allege personal injury and are brought by individual plaintiffs or on behalf of a class or purported class of individual plaintiffs. Plaintiffs' allegations of liability in these cases are based on various theories of recovery, including negligence, gross negligence, strict liability, fraud, misrepresentation, design defect, failure to warn, breach of express and implied warranties, violations of deceptive trade practice laws and consumer protection statutes. Plaintiffs in these cases seek various forms of relief, including compensatory and other damages, and injunctive and equitable relief. Defenses raised in these cases include licit activity, failure to state a claim, lack of defect, lack of proximate cause, assumption of the risk, contributory negligence, and statute of limitations. As of October 22, 2019 , there were a number of smoking and health cases pending against us, our subsidiaries or indemnitees, as follows: • 49 cases brought by individual plaintiffs in Argentina ( 31 ), Brazil ( 5 ), Canada ( 2 ), Chile ( 4 ), Costa Rica ( 1 ), Italy ( 1 ), the Philippines ( 1 ), Poland ( 2 ), Turkey ( 1 ) and Scotland ( 1 ), compared with 63 such cases on October 23, 2018 , and 65 cases on October 23, 2017 ; and • 10 cases brought on behalf of classes of individual plaintiffs in Brazil ( 1 ) and Canada ( 9 ), compared with 10 such cases on October 23, 2018 and 11 such cases on October 23, 2017 . The class actions pending in Canada are described above under the caption “ Smoking and Health Litigation — Canada. ” In the class action pending in Brazil, The Smoker Health Defense Association (ADESF) v. Souza Cruz, S.A. and Philip Morris Marketing, S.A., Nineteenth Lower Civil Court of the Central Courts of the Judiciary District of São Paulo, Brazil , filed July 25, 1995, our subsidiary and another member of the industry are defendants. The plaintiff, a consumer organization, is seeking damages for all addicted smokers and former smokers, and injunctive relief. In 2004, the trial court found defendants liable without hearing evidence and awarded “moral damages” of R$1,000 (approximately $243 ) per smoker per full year of smoking plus interest at the rate of 1% per month, as of the date of the ruling. The court did not award actual damages, which were to be assessed in the second phase of the case. The size of the class was not estimated. Defendants appealed to the São Paulo Court of Appeals, which annulled the ruling in November 2008, finding that the trial court had inappropriately ruled without hearing evidence and returned the case to the trial court for further proceedings. In May 2011, the trial court dismissed the claim. In February 2015, the appellate court unanimously dismissed plaintiff's appeal. In September 2015, plaintiff appealed to the Superior Court of Justice. In February 2017, the Chief Justice of the Superior Cour |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes: Income tax provisions for jurisdictions outside the United States of America, as well as state and local income tax provisions, were determined on a separate company basis, and the related assets and liabilities were recorded in PMI’s condensed consolidated balance sheets. PMI’s effective tax rates for the nine months and three months ended September 30, 2019 were 22.2% and 24.1% , respectively. PMI’s effective tax rates for the nine months and three months ended September 30, 2018 were 23.3% and 23.0% , respectively. The effective tax rate for the nine months ended September 30, 2019 was favorably impacted by further clarifications related to the Tax Cuts and Jobs Act, the reversal of a deferred tax liability on the unremitted earnings of PMI's Canadian subsidiary, RBH ( $49 million ), and a reduction in estimated U.S. federal income tax on dividend repatriation for the years 2015-2018 ( $67 million ). PMI estimates that its full-year 2019 effective tax rate will be approximately 23% , excluding the discrete tax events mentioned above and the 2019 loss on deconsolidation of RBH, which is a significant unusual or infrequently occurring item. For further details, see Note 20. Deconsolidation of RBH . Changes in currency exchange rates, earnings mix by taxing jurisdiction or future regulatory developments may have an impact on the effective tax rates, which PMI monitors each quarter. Significant judgment is required in determining income tax provisions and in evaluating tax positions. PMI is regularly examined by tax authorities around the world and is currently under examination in a number of jurisdictions. The U.S. federal statute of limitations remains open for the years 2015 and onward. Foreign and U.S. state jurisdictions have statutes of limitations generally ranging from three to five years. It is reasonably possible that within the next 12 months certain tax examinations will close, which could result in a change in unrecognized tax benefits along with related interest and penalties. An estimate of any possible change cannot be made at this time. |
Indebtedness
Indebtedness | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Indebtedness | Indebtedness: Short-term Borrowings: PMI's short-term borrowings, consisting of bank loans to certain PMI subsidiaries at September 30, 2019 and commercial paper and bank loans to certain PMI subsidiaries at December 31, 2018 , had a carrying value of $355 million and $730 million , respectively. The fair value of PMI’s short-term borrowings, based on current market interest rates, approximates carrying value. Long-term Debt: At September 30, 2019 and December 31, 2018 , PMI’s long-term debt consisted of the following: (in millions) September 30, 2019 December 31, 2018 U.S. dollar notes, 1.875% to 6.375% (average interest rate 3.461%), due through 2044 $ 20,526 $ 20,819 Foreign currency obligations: Euro notes, 0.125% to 3.125% (average interest rate 1.950%), due through 2039 9,594 8,656 Swiss franc notes, 0.750% to 2.000% (average interest rate 1.337%), due through 2024 1,159 1,374 Other (average interest rate 3.283%), due through 2024 182 180 31,461 31,029 Less current portion of long-term debt 5,035 4,054 $ 26,426 $ 26,975 Other foreign currency debt above includes mortgage debt in Switzerland and finance lease obligations at September 30, 2019 and December 31, 2018 . PMI's debt issuances in the first nine months of 2019 were as follows: (in millions) Type Face Value Interest Rate Issuance Maturity U.S. dollar notes (a) $900 2.875% May 2019 May 2024 U.S. dollar notes (b) $750 3.375% May 2019 August 2029 Euro notes (c) €500 (approximately $557) (d) 0.125% August 2019 August 2026 Euro notes (c) €750 (approximately $835) (d) 0.800% August 2019 August 2031 Euro notes (c) €750 (approximately $835) (d) 1.450% August 2019 August 2039 (a) Interest on these notes is payable semi-annually in arrears beginning in November 2019. (b) Interest on these notes is payable semi-annually in arrears beginning in August 2019. (c) Interest on these notes is payable annually in arrears beginning in August 2020. (d) USD equivalents for foreign currency notes were calculated based on exchange rates on the date of issuance. The net proceeds from the sale of the securities listed in the table above have been and will be used for general corporate purposes, including repayment of outstanding commercial paper and refinancing of outstanding 2.000% Notes due 2020, outstanding Floating Rate Notes due 2020 and outstanding Euro denominated 1.750% Notes due 2020. Credit Facilities: On January 28, 2019, PMI entered into an agreement to extend the term of its $2.0 billion 364 -day revolving credit facility from February 5, 2019, to February 4, 2020. At September 30, 2019 , PMI's total committed credit facilities were as follows: (in billions) Type Committed Credit Facilities 364-day revolving credit, expiring February 4, 2020 $ 2.0 Multi-year revolving credit, expiring February 28, 2021 2.5 Multi-year revolving credit, expiring October 1, 2022 3.5 Total facilities $ 8.0 At September 30, 2019 , there were no borrowings under these committed credit facilities, and the entire committed amounts were available for borrowing. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements: The authoritative guidance defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The guidance also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The guidance describes three levels of input that may be used to measure fair value, which are as follows: Level 1 - Quoted prices in active markets for identical assets or liabilities; Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Equity Securities The fair value of PMI’s equity securities, which are determined by using quoted prices in active markets, have been classified within Level 1. Derivative Financial Instruments PMI assesses the fair value of its foreign exchange contracts and interest rate contracts using standard valuation models that use, as their basis, readily observable market inputs. The fair value of PMI’s foreign exchange forward contracts is determined by using the prevailing foreign exchange spot rates and interest rate differentials, and the respective maturity dates of the instruments. The fair value of PMI’s currency options is determined by using a Black-Scholes methodology based on foreign exchange spot rates and interest rate differentials, currency volatilities and maturity dates. PMI’s derivative financial instruments have been classified within Level 2 in the table shown below. See Note 5. Financial Instruments for additional discussion of derivative financial instruments. Debt The fair value of PMI’s outstanding debt, which is utilized solely for disclosure purposes, is determined using quotes and market interest rates currently available to PMI for issuances of debt with similar terms and remaining maturities. The aggregate carrying value of PMI’s debt, excluding short-term borrowings and $38 million of finance leases, was $31,423 million at September 30, 2019 . The fair value of PMI’s outstanding debt, excluding the aforementioned short-term borrowings and finance leases, was classified within Level 1 and Level 2 in the table shown below. The aggregate fair values of PMI's investments in equity securities, derivative financial instruments and PMI's debt as of September 30, 2019 , were as follows: (in millions) Fair Value at September 30, 2019 Quoted Prices Significant Significant Assets: Equity securities $ 282 $ 282 $ — $ — Derivative contracts 453 — 453 — Total assets $ 735 $ 282 $ 453 $ — Liabilities: Debt $ 33,828 $ 33,663 $ 165 $ — Derivative contracts 280 — 280 — Total liabilities $ 34,108 $ 33,663 $ 445 $ — |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Losses | 9 Months Ended |
Sep. 30, 2019 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Losses | Accumulated Other Comprehensive Losses: PMI’s accumulated other comprehensive losses, net of taxes, consisted of the following: (in millions) At September 30, 2019 At December 31, 2018 At September 30, 2018 Currency translation adjustments $ (5,649 ) $ (6,500 ) $ (6,595 ) Pension and other benefits (3,306 ) (3,646 ) (2,666 ) Derivatives accounted for as hedges (11 ) 35 62 Total accumulated other comprehensive losses $ (8,966 ) $ (10,111 ) $ (9,199 ) Reclassifications from Other Comprehensive Earnings The movements in accumulated other comprehensive losses and the related tax impact, for each of the components above, that are due to current period activity and reclassifications to the income statement, including those related to the deconsolidation of RBH, are shown on the condensed consolidated statements of comprehensive earnings for the nine months and three months ended September 30, 2019 and 2018 . For additional information, see Note 3. Benefit Plans for disclosures related to PMI's pension and other benefits, Note 5. Financial Instruments for disclosures related to derivative financial instruments and Note 20. Deconsolidation of RBH for disclosures related to the deconsolidation of RBH. |
Balance Sheet Offsetting
Balance Sheet Offsetting | 9 Months Ended |
Sep. 30, 2019 | |
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, 2019 Assets Derivative contracts $ 453 $ — $ 453 $ (260 ) $ (141 ) $ 52 Liabilities Derivative contracts $ 280 $ — $ 280 $ (260 ) $ (15 ) $ 5 At December 31, 2018 Assets Derivative contracts $ 220 $ — $ 220 $ (124 ) $ (80 ) $ 16 Liabilities Derivative contracts $ 631 $ — $ 631 $ (124 ) $ (427 ) $ 80 |
Investments in Unconsolidated S
Investments in Unconsolidated Subsidiaries, Equity Securities and Other Related Parties | 9 Months Ended |
Sep. 30, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments in Unconsolidated Subsidiaries, Equity Securities and Other Related Parties | Investments in Unconsolidated Subsidiaries, Equity Securities and Other Related Parties: Investments in unconsolidated subsidiaries: At September 30, 2019 and December 31, 2018 , PMI had total investments in unconsolidated subsidiaries of $1,036 million and $981 million , respectively, which were accounted for under the equity method of accounting. Equity method investments are initially recorded at cost. Under the equity method of accounting, the investment is adjusted for PMI's proportionate share of earnings or losses, dividends, capital contributions, changes in ownership interests and movements in currency translation adjustments. The carrying value of our equity method investments at September 30, 2019 and December 31, 2018 exceeded our share of the unconsolidated subsidiaries' book value by $877 million and $835 million , respectively. The difference between the investment carrying value and the amount of underlying equity in net assets, excluding $837 million and $793 million attributable to goodwill as of September 30, 2019 and December 31, 2018 , respectively, is being amortized on a straight-line basis over the underlying assets' estimated useful lives of 10 to 20 years . At September 30, 2019 and December 31, 2018 , PMI received year-to-date dividends from unconsolidated subsidiaries of $83 million and $118 million , respectively. PMI holds a 23% equity interest in Megapolis Distribution BV, the holding company of CJSC TK Megapolis, PMI's distributor in Russia (Eastern Europe segment). PMI holds a 49% equity interest in United Arab Emirates-based Emirati Investors-TA (FZC) (“EITA”). PMI holds an approximate 25% economic interest in Société des Tabacs Algéro-Emiratie (“STAEM”), an Algerian joint venture that is 51% owned by EITA and 49% by the Algerian state-owned enterprise Management et Développement des Actifs et des Ressources Holding ("MADAR Holding"), formerly known as Société Nationale des Tabacs et Allumettes SpA. STAEM, which is part of the Middle East & Africa segment, manufactures and distributes under license some of PMI’s brands. The initial investments in Megapolis Distribution BV and EITA were recorded at cost and are included in investments in unconsolidated subsidiaries and equity securities on the condensed consolidated balance sheets. Equity securities: Following the deconsolidation of RBH, PMI recorded the continuing investment in RBH, PMI's wholly owned subsidiary, at fair value of $3,280 million at the date of deconsolidation, within investments in unconsolidated subsidiaries and equity securities. For further details, see Note 20. Deconsolidation of RBH . Transactions between PMI and RBH are considered to be related party transactions from the date of deconsolidation and are included in the tables below. Other related parties: United Arab Emirates-based Trans-Emirates Trading and Investments (FZC) ("TTI") holds a 33% non-controlling interest in Philip Morris Misr LLC ("PMM"), an entity incorporated in Egypt which is consolidated in PMI’s financial statements in the Middle East & Africa segment. PMM sells, under license, PMI brands in Egypt through an exclusive distribution agreement with a local entity that is also controlled by TTI. Amounts in the tables below have been updated to reflect the transactions with this other related party for all periods. IPM India, PMI's consolidated subsidiary in the South & Southeast Asia segment, has a non-controlling interest of 43.7% held by Godfrey Phillips India Ltd, who also acts as contract manufacturer and distributor for IPM. Amounts in the tables below include transactions between these related parties, beginning in 2019. Prior periods do not include these transactions as they were not material. Financial activity with unconsolidated subsidiaries, equity securities and other related parties: PMI’s net revenues and expenses with unconsolidated subsidiaries, equity securities and the other related parties were as follows: For the Nine Months Ended September 30, For the Three Months Ended September 30, (in millions) 2019 2018 2019 2018 Net revenues: Megapolis Group $ 1,537 $ 1,411 $ 622 $ 533 Other 770 525 279 210 Net revenues (a) $ 2,307 $ 1,936 $ 901 $ 743 Expenses: Other $ 41 $ 16 $ 14 $ 6 Expenses $ 41 $ 16 $ 14 $ 6 (a) Net revenues exclude excise taxes and VAT billed to customers. Prior year's amounts have been reclassified to conform with the current year's presentation. PMI’s balance sheet activity related to unconsolidated subsidiaries, equity securities and the other related parties was as follows: (in millions) At September 30, 2019 At December 31, 2018 Receivables: Megapolis Group $ 467 $ 172 Other 184 136 Receivables $ 651 $ 308 Payables: Other $ 16 $ 8 Payables $ 16 $ 8 |
Sale of Accounts Receivable
Sale of Accounts Receivable | 9 Months Ended |
Sep. 30, 2019 | |
Sale of Accounts Receivable [Abstract] | |
Sale of Accounts Receivable | Sale of Accounts Receivable: To mitigate risk and enhance cash and liquidity management PMI sells trade receivables to unaffiliated financial institutions. These arrangements allow PMI to sell, on an ongoing basis, certain trade receivables without recourse. The trade receivables sold are generally short-term in nature and are removed from the condensed consolidated balance sheets. PMI sells trade receivables under two types of arrangements, servicing and non-servicing. For servicing arrangements, PMI continues to service the sold trade receivables on an administrative basis and does not act on behalf of the unaffiliated financial institutions. When applicable, a servicing liability is recorded for the estimated fair value of the servicing. The amounts associated with the servicing liability were not material as of September 30, 2019 and September 30, 2018 . Under the non-servicing arrangements, PMI does not provide any administrative support or servicing after the trade receivables have been sold to the unaffiliated financial institutions. Cumulative trade receivables sold, including excise taxes, for the nine months ended September 30, 2019 and 2018 , were $7.8 billion and $8.0 billion , respectively. PMI’s operating cash flows were positively impacted by the amount of the trade receivables sold and derecognized from the condensed consolidated balance sheets, which remained outstanding with the unaffiliated financial institutions. The trade receivables sold that remained outstanding under these arrangements as of September 30, 2019 and September 30, 2018 , were $0.6 billion , and $0.6 billion , respectively. The net proceeds received are included in cash provided by operating activities in the condensed consolidated statements of cash flows. The difference between the carrying amount of the trade receivables sold and the sum of the cash received is recorded as a loss on sale of trade receivables within marketing, administration and research costs in the condensed consolidated statements of earnings. For the nine months and three months ended September 30, 2019 and 2018 , the loss on sale of trade receivables was immaterial. |
Product Warranty
Product Warranty | 9 Months Ended |
Sep. 30, 2019 | |
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 product failure rates, logistics and service delivery costs, and warranty policies. PMI accounts for its product warranties within other accrued liabilities. At September 30, 2019 and December 31, 2018 , these amounts were as follows: (in millions) At September 30, 2019 At December 31, 2018 Balance at beginning of period $ 67 $ 71 Changes due to: Warranties issued 236 179 Settlements (153 ) (183 ) Currency — — Balance at end of period $ 150 $ 67 |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions: On March 21, 2018, PMI acquired the remaining 49% interest in Tabacalera Costarricense, S.A. and Mendiola y Compañía, S.A. for a net purchase price of $95 million , which includes $2 million of contingent consideration. As a result, PMI now owns 100% of these Costa Rican affiliates. The purchase of the remaining 49% interest resulted in a decrease to PMI’s additional paid-in capital of $86 million . |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Leases | Leases: PMI determines that a contract contains a lease if the contract conveys a right to control the use of the identified asset for a period of time in exchange for consideration. PMI’s operating leases are principally for real estate (office space, warehouses and retail store space) and vehicles. Lease expense is recognized on a straight-line basis over the lease term. Lease terms range from 1 year to 75 years , some of which include options to renew, which are reasonably certain to be renewed. Lease terms may also include options to terminate the lease. At lease commencement PMI recognizes lease liabilities and the corresponding right-of-use assets (at the present value of future payments) for predominately all of its operating leases. The recognition of the right of use asset and lease liability includes renewal options when it is reasonably certain that they will be exercised. The exercise of a lease renewal or termination option is at PMI’s discretion. Certain of PMI’s leases include payments that are based on changes to an index or on actual usage. These lease payments are adjusted periodically and are included within variable lease costs. For information regarding PMI’s immaterial finance leases, see Note 11. Fair Value Measurements . Beginning in 2019, PMI accounts for lease and nonlease components as a single lease component with the exception of its vehicle leases, of which PMI accounts for the lease components separately from the nonlease components. Additionally, leases with an initial term of 12 months or less are not included in the right of use asset or lease liability on the condensed consolidated statement of financial position. PMI’s operating leases at September 30, 2019 were as follows: (in millions) September 30, 2019 Assets: Other assets $ 716 Liabilities: Current Accrued liabilities - Other $ 183 Noncurrent Income taxes and other liabilities 529 Total lease liabilities $ 712 The components of PMI’s lease cost were as follows for the nine months and three months ended September 30, 2019 : (in millions) For the Nine Months Ended September 30, 2019 For the Three Months Ended September 30, 2019 Operating lease cost $ 180 $ 61 Short-term lease cost 45 15 Variable lease cost 20 10 Total lease cost $ 245 $ 86 For the nine months ended September 30, 2019 , lease cost of $59 million were recorded in cost of sales and $186 million were recorded in marketing, administration and research cost. For the three months ended September 30, 2019 , lease costs of $21 million were recorded in cost of sales and $65 million were recorded in marketing, administration and research cost. Maturity of PMI’s operating lease liabilities, on an undiscounted basis, as of September 30, 2019 , were as follows (as calculated under the new guidance ASC 842 (Leases)): (in millions) Total 2019 $ 63 2020 191 2021 139 2022 105 2023 79 Thereafter 330 Total lease payments 907 Less: Interest 195 Present value of lease liabilities $ 712 Minimum rental commitments under non-cancelable operating leases in effect at December 31, 2018, were as follows (as calculated under legacy guidance ASC 840 (Leases)): (in millions) Total 2019 $ 147 2020 103 2021 73 2022 52 2023 43 Thereafter 354 $ 772 Other information related to PMI’s operating leases were as follows for the nine months ended September 30, 2019 : (in millions) September 30, 2019 Cash paid for amounts included in the measurement of lease liabilities in Operating cash flows $ 178 Leased assets obtained in exchange for new operating lease liabilities $ 169 Weighted-average remaining lease term (years) 10.1 Weighted-average discount rate (1) 4.7 % (1) PMI’s weighted-average discount rate is based on its estimated pre-tax cost of debt adjusted for country-specific risk. For further details, see Note 21. New Accounting Standards |
Asset Impairment and Exit Costs
Asset Impairment and Exit Costs | 9 Months Ended |
Sep. 30, 2019 | |
Restructuring and Related Activities [Abstract] | |
Asset Impairment and Exit Costs | Asset Impairment and Exit Costs: Global Manufacturing Infrastructure Optimization In light of declining PMI cigarette volumes resulting from lower total industry volumes and the shift to smoke-free alternatives, PMI continues to optimize its global manufacturing infrastructure. For the nine months and three months ended September 30, 2019 , PMI recorded pre-tax asset impairment and exit costs of $65 million and $22 million , respectively. For the nine months ended September 30, 2019, these costs were related to a cigarette plant closure in Pakistan ( $20 million ) and Colombia ( $45 million ); and for the three months ended September 30, 2019, these costs were related to the plant closure in Colombia. For the cigarette plant closure in Colombia, we expect to incur additional pre-tax exit costs of approximately $4 million during the remainder of 2019. In the second quarter of 2019, an affiliate of PMI, Philip Morris Manufacturing GmbH ("PMMG"), initiated consultations with employee representatives on a proposal to end cigarette production in its factory located in Berlin, Germany by January 1, 2020, and to seek to agree on fair solutions for any impacted employees. Until the consultation process is concluded, the closure of the Berlin facility is not considered probable (under U.S. GAAP), and the total potential costs associated with this contemplated proposal, which are expected to be significant, cannot be determined. As a result, no related costs were recorded in the third quarter of 2019. If the consultation process is successfully concluded, PMI would expect, at that time, to record charges, which would include employee severance costs, asset costs, including accelerated depreciation, and impairment and other closure related costs. The amount and timing of the income statement recognition of these amounts and the related cash flows will depend on a number of factors, including the timing of the completion of the consultation process as well as the negotiated elements of the associated social plan. Asset Impairment and Exit Costs by Segment PMI recorded the following pre-tax asset impairment and exit costs by segment: (in millions) For the Nine Months Ended September 30, For the Three Months Ended September 30, 2019 2018 2019 2018 Separation programs: South & Southeast Asia 3 — — — Latin America & Canada 37 — 22 — Total separation programs 40 — 22 — Asset impairment charges: South & Southeast Asia 17 — — — Latin America & Canada 8 — — — Total asset impairment charges 25 — — — Asset impairment and exit costs $ 65 $ — $ 22 $ — The total pre-tax asset impairment and exit costs above were included in marketing, administration and research costs on the condensed consolidated statements of earnings. Movement in Exit Cost Liabilities The movement in exit cost liabilities for the nine months ended September 30, 2019 was as follows: (in millions) Liability balance, January 1, 2019 $ — Charges, net 40 Cash spent (21 ) Currency/other (2 ) Liability balance, September 30, 2019 $ 17 Cash payments related to exit costs at PMI were $21 million and $13 million for the nine months and three months ended September 30, 2019 |
Deconsolidation of RBH
Deconsolidation of RBH | 9 Months Ended |
Sep. 30, 2019 | |
Deconsolidation [Abstract] | |
Deconsolidation of RBH | Deconsolidation of RBH: As discussed in Note 8. Contingencies, following the March 1, 2019 judgment of the Court of Appeal of Québec in two class action lawsuits against PMI's Canadian subsidiary, Rothmans, Benson & Hedges Inc. ("RBH"), PMI recorded in its consolidated results a pre-tax charge of $194 million , representing $142 million net of tax, in the first quarter of 2019. This pre-tax Canadian tobacco litigation-related expense was included in marketing, administration and research costs on PMI's condensed consolidated statement of earnings for the nine months ended September 30, 2019 . The charge reflects PMI’s assessment of the portion of the judgment that represents probable and estimable loss prior to the deconsolidation of RBH and corresponds to the trust account deposit required by the judgment. RBH’s share of the deposit is approximately CAD 257 million . On March 22, 2019 , RBH obtained an initial order from the Ontario Superior Court of Justice granting it protection under the Companies’ Creditors Arrangement Act ("CCAA"), which is a Canadian federal law that permits a Canadian business to restructure its affairs while carrying on its business in the ordinary course with minimal disruption to its customers, suppliers and employees. The administration of the CCAA process, principally relating to the powers provided to the court and the court appointed monitor, removes certain elements of control of the business from both PMI and RBH. As a result, PMI has determined that it no longer has a controlling financial interest over RBH as defined in ASC 810 (Consolidation), and PMI deconsolidated RBH as of the date of the CCAA filing. PMI has also determined that it does not exert "significant influence" over RBH as that term is defined in ASC 323 (Investments-Equity Method and Joint Ventures). Therefore, as of March 22, 2019, PMI accounted for its continuing investment in RBH in accordance with ASC 321 (Investments-Equity Securities) as an equity security, without readily determinable fair value. Following the deconsolidation, the carrying value of assets and liabilities of RBH was removed from the consolidated balance sheet of PMI, and the continuing investment in RBH was recorded at fair value at the date of deconsolidation. The total amount deconsolidated from PMI’s balance sheet was $3,519 million , including $1,323 million of cash, $1,463 million of goodwill, $529 million of accumulated other comprehensive earnings, primarily related to historical currency translation and $204 million of other assets and liabilities, net. While PMI is accounting for its investment in RBH as an equity security, PMI would recognize dividends as income upon receipt. However, while it remains under creditor protection, RBH does not anticipate paying dividends. The fair value of PMI’s continuing investment in RBH of $3,280 million was determined at the date of deconsolidation, recorded within Investments in unconsolidated subsidiaries and equity securities and is assessed for impairment on an ongoing basis. The estimated fair value of the underlying business was determined based on an income approach using a discounted cash flow analysis, as well as a market approach for certain contingent liabilities. The information used in the estimate includes observable inputs, primarily a discount rate of 8% , a terminal growth rate of 2.5% and information about total tobacco market size in Canada and RBH’s share of the market, as well as unobservable inputs such as operating budgets and strategic plans, various inflation scenarios, estimated shipment volumes, and expected product pricing and projected margins. The difference between the carrying value of the assets and liabilities of RBH that were deconsolidated, and the fair value of the continuing investment, as determined at the date of deconsolidation, was $239 million , before tax, and this loss on deconsolidation is reflected within marketing, administration and research costs on PMI’s condensed consolidated statement of earnings for the nine months ended September 30, 2019 . PMI also recorded a tax benefit of $49 million within the provision for income taxes for the nine months ended September 30, 2019 , related to the reversal of a deferred tax liability on unremitted earnings of RBH. RBH is party to transactions with PMI and its consolidated subsidiaries entered into in the normal course of business; these transactions include royalty payments and recharge of various corporate expenses for services benefiting RBH. Up to the date of CCAA filing, these transactions were eliminated on consolidation and had no impact on PMI’s consolidated statement of earnings. After deconsolidating RBH, these transactions are treated as third-party transactions in PMI’s financial statements. The amount of these related party transactions is included within Note 14. Investments in Unconsolidated Subsidiaries, Equity Securities and Other Related Parties . Developments in the CCAA process, including resolution through a plan of arrangement or compromise of all pending tobacco-related litigation currently stayed in Canada, as discussed in Note 8. Contingencies , could result in a material change in the fair value of PMI’s continuing investment in RBH. |
New Accounting Standards
New Accounting Standards | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
New Accounting Standards | New Accounting Standards: Recently adopted On February 25, 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ASU 2016-02, “Leases” (“ASU 2016-02”). ASU 2016-02 requires organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. Additionally, ASU 2016-02 modifies current guidance for lessors' accounting. ASU 2016-02 is effective for interim and annual reporting periods beginning on or after January 1, 2019, with early adoption permitted. PMI has identified its lease management system and has identified and evaluated the applicable leases. In addition to the guidance in ASU 2016-02, PMI has evaluated ASU 2018-11, which was issued in July 2018 and provides an optional transitional method. As a result of this evaluation, PMI elected to use the optional transition method, which allows companies to use the effective date as the date of initial application on transition and not adjust comparative period financial information or make the new required disclosures for periods prior to the effective date. Additionally, PMI elected to use the hindsight practical expedient, as well as the package of practical expedients permitted under the transition guidance within the new standard. Upon adoption, PMI recognized lease liabilities and the corresponding right-of-use assets (at the present value of future payments) for predominately all of its operating leases in place at that time. At January 1, 2019, PMI's adoption of ASU 2016-02 resulted in an increase of approximately $0.7 billion on its assets and liabilities in its statement of financial position. ASU 2016-02 did not have a material impact on its results of operations or cash flows. For further details, see Note 18. Leases . |
New Accounting Standards (Polic
New Accounting Standards (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
New Accounting Standards | New Accounting Standards: Recently adopted On February 25, 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ASU 2016-02, “Leases” (“ASU 2016-02”). ASU 2016-02 requires organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. Additionally, ASU 2016-02 modifies current guidance for lessors' accounting. ASU 2016-02 is effective for interim and annual reporting periods beginning on or after January 1, 2019, with early adoption permitted. PMI has identified its lease management system and has identified and evaluated the applicable leases. In addition to the guidance in ASU 2016-02, PMI has evaluated ASU 2018-11, which was issued in July 2018 and provides an optional transitional method. As a result of this evaluation, PMI elected to use the optional transition method, which allows companies to use the effective date as the date of initial application on transition and not adjust comparative period financial information or make the new required disclosures for periods prior to the effective date. Additionally, PMI elected to use the hindsight practical expedient, as well as the package of practical expedients permitted under the transition guidance within the new standard. Upon adoption, PMI recognized lease liabilities and the corresponding right-of-use assets (at the present value of future payments) for predominately all of its operating leases in place at that time. At January 1, 2019, PMI's adoption of ASU 2016-02 resulted in an increase of approximately $0.7 billion on its assets and liabilities in its statement of financial position. ASU 2016-02 did not have a material impact on its results of operations or cash flows. For further details, see Note 18. Leases . |
Stock Plans (Tables)
Stock Plans (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Disclosure of share-based compensation arrangements by payment award | During the nine months ended September 30, 2019 and 2018 , shares granted to eligible employees and the grant date fair value per share related to PSU awards were as follows: Number of Shares Granted PSU Grant Date Fair Value Subject to Other Performance Factors Per Share PSU Grant Date Fair Value Subject to TSR Performance Factor Per Share 2019 647,700 $ 77.23 $ 83.59 2018 401,500 $ 100.69 $ 118.98 Compensation expense related to PSU awards was as follows: Compensation Expense Related to PSU Awards (in millions) For the Nine Months Ended September 30, For the Three Months Ended September 30, 2019 $ 43 $ 10 2018 $ 18 ($ 12 ) During the nine months ended September 30, 2019 and 2018 , shares granted to eligible employees and the weighted-average grant date fair value per share related to RSU awards were as follows: Number of Shares Granted Weighted-Average Grant Date Fair Value Per RSU Award Granted 2019 1,717,230 $ 77.25 2018 1,274,730 $ 100.39 Compensation expense related to RSU awards was as follows: Compensation Expense Related to RSU Awards (in millions) For the Nine Months Ended September 30, For the Three Months Ended September 30, 2019 $ 91 $ 27 2018 $ 88 $ 25 |
Schedule of assumptions used to determine the grant date fair value of the PSU awards subject to the TSR performance factor | The following assumptions were used to determine the grant date fair value of the PSU awards subject to the TSR performance factor: 2019 2018 Risk-free interest rate (a) 2.4 % 2.3 % Expected volatility 21.4 % (b) 19.6 % (c) (a) Based on the U.S. Treasury yield curve. (b) Determined using the observed historical volatility. (c) Determined using a weighted-average of historical and implied volatility. |
Benefit Plans (Tables)
Benefit Plans (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Retirement Benefits [Abstract] | |
Components of Pension and Other Employee Benefit Costs | Pension and other employee benefit costs per the condensed consolidated statements of earnings consisted of the following: For the Nine Months Ended September 30, For the Three Months Ended September 30, (in millions) 2019 2018 2019 2018 Net pension costs (income) $ (16 ) $ (49 ) $ (6 ) $ (16 ) Net postemployment costs 72 59 25 20 Net postretirement costs 5 9 1 3 Total pension and other employee benefit costs $ 61 $ 19 $ 20 $ 7 |
Components of Net Periodic Benefit Cost | Net periodic pension cost consisted of the following: Pension (1) For the Nine Months Ended September 30, For the Three Months Ended September 30, (in millions) 2019 2018 2019 2018 Service cost $ 161 $ 159 $ 54 $ 52 Interest cost 89 87 29 29 Expected return on plan assets (247 ) (272 ) (82 ) (90 ) Amortization: Net loss 142 135 47 45 Prior service cost — 1 — — Net periodic pension cost $ 145 $ 110 $ 48 $ 36 (1) Primarily non-U.S. based defined benefit retirement plans. |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets, net (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of movements in goodwill | The movements in goodwill were as follows: (in millions) European Union Eastern Europe Middle East & Africa South & Southeast Asia East Asia & Australia Latin America & Canada Total Balances, December 31, 2018 $ 1,357 $ 303 $ 87 $ 2,795 $ 536 $ 2,111 $ 7,189 Changes due to: Currency (61 ) (10 ) (3 ) 50 8 10 (6 ) Deconsolidation of RBH (1,463 ) (1,463 ) Balances, September 30, 2019 $ 1,296 $ 293 $ 84 $ 2,845 $ 544 $ 658 $ 5,720 |
Schedule of amortizable intangible assets | Details of other intangible assets were as follows: September 30, 2019 December 31, 2018 (in millions) Weighted-Average Remaining Useful Life Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Non-amortizable intangible assets $ 1,288 $ 1,288 $ 1,269 $ 1,269 Amortizable intangible assets: Trademarks 18 years 1,200 $ 507 693 1,488 $ 608 880 Distribution networks 8 years 110 68 42 141 82 59 Other* 9 years 107 42 65 107 37 70 Total other intangible assets $ 2,705 $ 617 $ 2,088 $ 3,005 $ 727 $ 2,278 * Includes farmer contracts and intellectual property rights |
Schedule of non-amortizable intangible assets | Details of other intangible assets were as follows: September 30, 2019 December 31, 2018 (in millions) Weighted-Average Remaining Useful Life Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Non-amortizable intangible assets $ 1,288 $ 1,288 $ 1,269 $ 1,269 Amortizable intangible assets: Trademarks 18 years 1,200 $ 507 693 1,488 $ 608 880 Distribution networks 8 years 110 68 42 141 82 59 Other* 9 years 107 42 65 107 37 70 Total other intangible assets $ 2,705 $ 617 $ 2,088 $ 3,005 $ 727 $ 2,278 * Includes farmer contracts and intellectual property rights |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives Not Designated as Hedging Instruments | For the nine months and three months ended September 30, 2019 and 2018 , these items impacted the consolidated statement of earnings as follows: (pre-tax, in millions) For the Three Months Ended September 30, Derivatives not Designated Statement of Earnings Amount of Gain/(Loss) For the Nine Months Ended September 30, For the Three Months Ended September 30, 2019 2018 2019 2018 Derivative contracts Interest expense, net $ 79 $ 30 $ 31 $ 20 Total $ 79 $ 30 $ 31 $ 20 |
Fair Value of Derivative Contracts | The fair value of PMI’s derivative contracts included in the condensed consolidated balance sheets as of September 30, 2019 and December 31, 2018 , were as follows: Derivative Assets Derivative Liabilities Fair Value Fair Value (in millions) Balance Sheet Classification At September 30, 2019 At December 31, 2018 Balance Sheet Classification At September 30, 2019 At December 31, 2018 Derivative contracts designated as hedging instruments Other current assets $ 342 $ 54 Other accrued liabilities $ 30 $ 47 Other assets 59 99 Income taxes and other liabilities 212 525 Derivative contracts not designated as hedging instruments Other current assets 52 67 Other accrued liabilities 25 46 Other assets — — Income taxes and other liabilities 13 13 Total derivatives $ 453 $ 220 $ 280 $ 631 |
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, 2019 and 2018 , 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 2019 2018 2019 2018 Derivatives in Cash Flow Hedging Relationship Derivative contracts $ (39 ) $ 33 Net revenues $ 22 $ (5 ) Cost of sales — — Marketing, administration and research costs (3 ) 7 Interest expense, net (4 ) (4 ) Derivatives in Net Investment Hedging Relationship Derivative contracts 564 (7 ) Total $ 525 $ 26 $ 15 $ (2 ) (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 2019 2018 2019 2018 Derivatives in Cash Flow Hedging Relationship Derivative contracts $ (16 ) $ 45 Net revenues $ (7 ) $ 2 Cost of sales — — Marketing, administration and research costs (4 ) 10 Interest expense, net (2 ) (1 ) Derivatives in Net Investment Hedging Relationship Derivative contracts 419 (145 ) Total $ 403 $ (100 ) $ (13 ) $ 11 |
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, 2019 2018 2019 2018 Gain/(loss) at beginning of period $ 35 $ 42 $ (10 ) $ 37 Derivative (gains)/losses transferred to earnings (12 ) (9 ) 13 (15 ) Change in fair value (34 ) 29 (14 ) 40 Gain/(loss) as of September 30, $ (11 ) $ 62 $ (11 ) $ 62 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Calculation of Basic and Diluted EPS | Basic and diluted earnings per share (“EPS”) were calculated using the following: (in millions) For the Nine Months Ended September 30, For the Three Months Ended September 30, 2019 2018 2019 2018 Net earnings attributable to PMI $ 5,569 $ 6,001 $ 1,896 $ 2,247 Less distributed and undistributed earnings attributable to share-based payment awards 13 13 5 5 Net earnings for basic and diluted EPS $ 5,556 $ 5,988 $ 1,891 $ 2,242 Weighted-average shares for basic EPS 1,556 1,555 1,556 1,555 Plus contingently issuable performance stock units (PSUs) — — — — Weighted-average shares for diluted EPS 1,556 1,555 1,556 1,555 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Data | Segment data were as follows: (in millions) For the Nine Months Ended September 30, For the Three Months Ended September 30, 2019 2018 2019 2018 Net revenues: European Union $ 7,381 $ 6,958 $ 2,645 $ 2,467 Eastern Europe 2,300 2,105 899 778 Middle East & Africa 3,058 3,126 1,127 1,143 South & Southeast Asia 3,607 3,434 1,246 1,197 East Asia & Australia 4,094 4,235 1,252 1,166 Latin America & Canada 1,652 2,268 473 753 Net revenues $ 22,092 $ 22,126 $ 7,642 $ 7,504 Operating income (loss): European Union $ 3,346 $ 3,096 $ 1,255 $ 1,179 Eastern Europe 284 682 (101 ) 270 Middle East & Africa 1,304 1,268 519 491 South & Southeast Asia 1,471 1,324 539 455 East Asia & Australia 1,520 1,439 451 426 Latin America & Canada 100 866 125 335 Operating income $ 8,025 $ 8,675 $ 2,788 $ 3,156 Items affecting the comparability of results from operations were as follows: • Russia excise and VAT audit charge - See Note 8. Contingencies for details of the $374 million pre-tax charge included in the Eastern Europe segment for the nine months and three months ended September 30, 2019 . • Asset impairment and exit costs - See Note 19. Asset Impairment and Exit Costs for a breakdown of these costs by segment. • Canadian tobacco litigation-related expense - See Note 8. Contingencies and Note 20. Deconsolidation of RBH for details of the $194 million pre-tax charge included in the Latin America & Canada segment for the nine months ended September 30, 2019 . • Loss on deconsolidation of RBH - See Note 20. Deconsolidation of RBH for details of the $239 million loss included in the Latin America & Canada segment for the nine months ended September 30, 2019 . PMI's net revenues by product category were as follows: (in millions) For the Nine Months Ended September 30, For the Three Months Ended September 30, 2019 2018 2019 2018 Net revenues: Combustible products: European Union $ 6,139 $ 6,381 $ 2,178 $ 2,225 Eastern Europe 1,774 1,926 664 705 Middle East & Africa 2,810 2,813 1,064 1,019 South & Southeast Asia 3,607 3,434 1,246 1,197 East Asia & Australia 2,074 2,348 680 789 Latin America & Canada 1,634 2,254 466 748 Total combustible products $ 18,039 $ 19,156 $ 6,298 $ 6,681 Reduced-risk products: European Union $ 1,242 $ 577 $ 467 $ 242 Eastern Europe 526 179 235 73 Middle East & Africa 248 313 63 124 South & Southeast Asia — — — — East Asia & Australia 2,020 1,887 572 377 Latin America & Canada 18 14 7 5 Total reduced-risk products $ 4,053 $ 2,970 $ 1,344 $ 823 Total PMI net revenues $ 22,092 $ 22,126 $ 7,642 $ 7,504 Note: Sum of product categories or Regions might not foot to total PMI due to roundings. |
Contingencies (Tables)
Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Tobacco Related Cases Pertaining to Combustible Products Pending Against Company | The table below lists the number of tobacco-related cases pertaining to combustible products pending against us and/or our subsidiaries or indemnitees as of October 22, 2019 , October 23, 2018 and October 23, 2017 :¹ Type of Case Number of Cases Pending as of October 22, 2019 Number of Cases Pending as of October 23, 2018 Number of Cases Pending as of October 23, 2017 Individual Smoking and Health Cases 49 63 65 Smoking and Health Class Actions 10 10 11 Health Care Cost Recovery Actions 17 16 16 Label-Related Class Actions — 1 1 Individual Label-Related Cases 5 1 1 Public Civil Actions 2 2 2 |
Schedule of Verdicts and Significant Post Trial Developments Where a Verdict was Returned In Favor of the Plaintiff(s) | The table below lists the verdict and significant post-trial developments in the four pending cases where a verdict was returned in favor of the plaintiff: Date Location of Type of Verdict Post-Trial February 2004 Brazil/The Smoker Health Defense Association Class Action The Civil Court of São Paulo found defendants liable without hearing evidence. In April 2004, the court awarded “moral damages” of R$1,000 (approximately $243) per smoker per full year of smoking plus interest at the rate of 1% per month, as of the date of the ruling. The court did not assess actual damages, which were to be assessed in a second phase of the case. The size of the class was not defined in the ruling. Defendants appealed to the São Paulo Court of Appeals, which annulled the ruling in November 2008, finding that the trial court had inappropriately ruled without hearing evidence and returned the case to the trial court for further proceedings. In May 2011, the trial court dismissed the claim. In March 2017, plaintiff filed an en banc appeal to the Superior Court of Justice. In addition, the defendants filed a constitutional appeal to the Federal Supreme Tribunal on the basis that plaintiff did not have standing to bring the lawsuit. Both appeals are still pending. ______ ¹ Includes cases pending in Canada. Date Location of Type of Verdict Post-Trial May 27, 2015 Canada/Conseil Québécois Sur Le Tabac Et La Santé and Jean-Yves Blais Class Action On May 27, 2015, the Superior Court of the District of Montreal, Province of Quebec ruled in favor of the Blais class on liability and found the class members’ compensatory damages totaled approximately CAD 15.5 billion (approximately $11.8 billion), including pre-judgment interest. The trial court awarded compensatory damages on a joint and several liability basis, allocating 20% to our subsidiary (approximately CAD 3.1 billion including pre-judgment interest (approximately $2.36 billion)). The trial court awarded CAD 90,000 (approximately $68,530) in punitive damages, allocating CAD 30,000 (approximately $22,840) to our subsidiary. The trial court ordered defendants to pay CAD 1 billion (approximately $761.5 million) of the compensatory damage award, CAD 200 million (approximately $152.3 million) of which is our subsidiary’s portion, into a trust within 60 days. In June 2015, RBH commenced the appellate process with the Court of Appeal of Quebec. On March 1, 2019, the Court of Appeal issued a decision largely affirming the trial court's decision. (See “ Stayed Litigation — Canada ” for further detail.) Date Location of Type of Verdict Post-Trial May 27, 2015 Canada/Cecilia Létourneau Class Action On May 27, 2015, the Superior Court of the District of Montreal, Province of Quebec ruled in favor of the Létourneau class on liability and awarded a total of CAD 131 million (approximately $99.8 million) in punitive damages, allocating CAD 46 million (approximately $35.0 million) to RBH. The trial court ordered defendants to pay the full punitive damage award into a trust within 60 days. The court did not order the payment of compensatory damages. In June 2015, RBH commenced the appellate process with the Court of Appeal of Quebec. On March 1, 2019, the Court of Appeal issued a decision largely affirming the trial court's decision. (See “ Stayed Litigation — Canada ” for further detail.) Date Location of Type of Verdict Post-Trial August 5, 2016 Argentina/Hugo Lespada Individual Action On August 5, 2016, the Civil Court No. 14 - Mar del Plata, issued a verdict in favor of plaintiff, an individual smoker, and awarded him ARS 110,000 (approximately $1,887), plus interest, in compensatory and moral damages. The trial court found that our subsidiary failed to warn plaintiff of the risk of becoming addicted to cigarettes. On August 23, 2016, our subsidiary filed its notice of appeal. On October 31, 2017, the Civil and Commercial Court of Appeals of Mar del Plata ruled that plaintiff's claim was barred by the statute of limitations and it reversed the trial court's decision. On November 28, 2017, plaintiff filed an extraordinary appeal of the reversal of the trial court's decision to the Supreme Court of the Province of Buenos Aires. |
Indebtedness (Tables)
Indebtedness (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | At September 30, 2019 and December 31, 2018 , PMI’s long-term debt consisted of the following: (in millions) September 30, 2019 December 31, 2018 U.S. dollar notes, 1.875% to 6.375% (average interest rate 3.461%), due through 2044 $ 20,526 $ 20,819 Foreign currency obligations: Euro notes, 0.125% to 3.125% (average interest rate 1.950%), due through 2039 9,594 8,656 Swiss franc notes, 0.750% to 2.000% (average interest rate 1.337%), due through 2024 1,159 1,374 Other (average interest rate 3.283%), due through 2024 182 180 31,461 31,029 Less current portion of long-term debt 5,035 4,054 $ 26,426 $ 26,975 |
Schedule of Debt Issuances During Current Period | PMI's debt issuances in the first nine months of 2019 were as follows: (in millions) Type Face Value Interest Rate Issuance Maturity U.S. dollar notes (a) $900 2.875% May 2019 May 2024 U.S. dollar notes (b) $750 3.375% May 2019 August 2029 Euro notes (c) €500 (approximately $557) (d) 0.125% August 2019 August 2026 Euro notes (c) €750 (approximately $835) (d) 0.800% August 2019 August 2031 Euro notes (c) €750 (approximately $835) (d) 1.450% August 2019 August 2039 (a) Interest on these notes is payable semi-annually in arrears beginning in November 2019. (b) Interest on these notes is payable semi-annually in arrears beginning in August 2019. (c) Interest on these notes is payable annually in arrears beginning in August 2020. (d) USD equivalents for foreign currency notes were calculated based on exchange rates on the date of issuance. The net proceeds from the sale of the securities listed in the table above have been and will be used for general corporate purposes, including repayment of outstanding commercial paper and refinancing of outstanding 2.000% Notes due 2020, outstanding Floating Rate Notes due 2020 and outstanding Euro denominated 1.750% Notes due 2020. |
Schedule of Committed Credit Facilities | At September 30, 2019 , PMI's total committed credit facilities were as follows: (in billions) Type Committed Credit Facilities 364-day revolving credit, expiring February 4, 2020 $ 2.0 Multi-year revolving credit, expiring February 28, 2021 2.5 Multi-year revolving credit, expiring October 1, 2022 3.5 Total facilities $ 8.0 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Aggregate Fair Values of PMI's Investments in Equity Securities, Derivative Financial Instruments and PMI's Debt | The aggregate fair values of PMI's investments in equity securities, derivative financial instruments and PMI's debt as of September 30, 2019 , were as follows: (in millions) Fair Value at September 30, 2019 Quoted Prices Significant Significant Assets: Equity securities $ 282 $ 282 $ — $ — Derivative contracts 453 — 453 — Total assets $ 735 $ 282 $ 453 $ — Liabilities: Debt $ 33,828 $ 33,663 $ 165 $ — Derivative contracts 280 — 280 — Total liabilities $ 34,108 $ 33,663 $ 445 $ — |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Losses (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Components of Accumulated Other Comprehensive Earnings (Losses), Net of Taxes | PMI’s accumulated other comprehensive losses, net of taxes, consisted of the following: (in millions) At September 30, 2019 At December 31, 2018 At September 30, 2018 Currency translation adjustments $ (5,649 ) $ (6,500 ) $ (6,595 ) Pension and other benefits (3,306 ) (3,646 ) (2,666 ) Derivatives accounted for as hedges (11 ) 35 62 Total accumulated other comprehensive losses $ (8,966 ) $ (10,111 ) $ (9,199 ) |
Balance Sheet Offsetting (Table
Balance Sheet Offsetting (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Offsetting [Abstract] | |
Offsetting Assets | 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, 2019 Assets Derivative contracts $ 453 $ — $ 453 $ (260 ) $ (141 ) $ 52 Liabilities Derivative contracts $ 280 $ — $ 280 $ (260 ) $ (15 ) $ 5 At December 31, 2018 Assets Derivative contracts $ 220 $ — $ 220 $ (124 ) $ (80 ) $ 16 Liabilities Derivative contracts $ 631 $ — $ 631 $ (124 ) $ (427 ) $ 80 |
Offsetting Liabilities | 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, 2019 Assets Derivative contracts $ 453 $ — $ 453 $ (260 ) $ (141 ) $ 52 Liabilities Derivative contracts $ 280 $ — $ 280 $ (260 ) $ (15 ) $ 5 At December 31, 2018 Assets Derivative contracts $ 220 $ — $ 220 $ (124 ) $ (80 ) $ 16 Liabilities Derivative contracts $ 631 $ — $ 631 $ (124 ) $ (427 ) $ 80 |
Investments in Unconsolidated_2
Investments in Unconsolidated Subsidiaries, Equity Securities and Other Related Parties (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Earnings and Balance Sheet Activities with Unconsolidated Subsidiaries, equity securities and Other Related Parties | PMI’s net revenues and expenses with unconsolidated subsidiaries, equity securities and the other related parties were as follows: For the Nine Months Ended September 30, For the Three Months Ended September 30, (in millions) 2019 2018 2019 2018 Net revenues: Megapolis Group $ 1,537 $ 1,411 $ 622 $ 533 Other 770 525 279 210 Net revenues (a) $ 2,307 $ 1,936 $ 901 $ 743 Expenses: Other $ 41 $ 16 $ 14 $ 6 Expenses $ 41 $ 16 $ 14 $ 6 (a) Net revenues exclude excise taxes and VAT billed to customers. Prior year's amounts have been reclassified to conform with the current year's presentation. PMI’s balance sheet activity related to unconsolidated subsidiaries, equity securities and the other related parties was as follows: (in millions) At September 30, 2019 At December 31, 2018 Receivables: Megapolis Group $ 467 $ 172 Other 184 136 Receivables $ 651 $ 308 Payables: Other $ 16 $ 8 Payables $ 16 $ 8 |
Product Warranty (Tables)
Product Warranty (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Guarantees and Product Warranties [Abstract] | |
Schedule of Accrued Product Warranties | At September 30, 2019 and December 31, 2018 , these amounts were as follows: (in millions) At September 30, 2019 At December 31, 2018 Balance at beginning of period $ 67 $ 71 Changes due to: Warranties issued 236 179 Settlements (153 ) (183 ) Currency — — Balance at end of period $ 150 $ 67 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Operating lease assets and liabilities | PMI’s operating leases at September 30, 2019 were as follows: (in millions) September 30, 2019 Assets: Other assets $ 716 Liabilities: Current Accrued liabilities - Other $ 183 Noncurrent Income taxes and other liabilities 529 Total lease liabilities $ 712 |
Operating lease liability maturity | Maturity of PMI’s operating lease liabilities, on an undiscounted basis, as of September 30, 2019 , were as follows (as calculated under the new guidance ASC 842 (Leases)): (in millions) Total 2019 $ 63 2020 191 2021 139 2022 105 2023 79 Thereafter 330 Total lease payments 907 Less: Interest 195 Present value of lease liabilities $ 712 |
Lease cost components | The components of PMI’s lease cost were as follows for the nine months and three months ended September 30, 2019 : (in millions) For the Nine Months Ended September 30, 2019 For the Three Months Ended September 30, 2019 Operating lease cost $ 180 $ 61 Short-term lease cost 45 15 Variable lease cost 20 10 Total lease cost $ 245 $ 86 For the nine months ended September 30, 2019 , lease cost of $59 million were recorded in cost of sales and $186 million were recorded in marketing, administration and research cost. For the three months ended September 30, 2019 , lease costs of $21 million were recorded in cost of sales and $65 million were recorded in marketing, administration and research cost. |
Minimum rental commitments under non-cancelable operating leases in effect at December 31, 2018 | Minimum rental commitments under non-cancelable operating leases in effect at December 31, 2018, were as follows (as calculated under legacy guidance ASC 840 (Leases)): (in millions) Total 2019 $ 147 2020 103 2021 73 2022 52 2023 43 Thereafter 354 $ 772 |
Other lease information | Other information related to PMI’s operating leases were as follows for the nine months ended September 30, 2019 : (in millions) September 30, 2019 Cash paid for amounts included in the measurement of lease liabilities in Operating cash flows $ 178 Leased assets obtained in exchange for new operating lease liabilities $ 169 Weighted-average remaining lease term (years) 10.1 Weighted-average discount rate (1) 4.7 % (1) PMI’s weighted-average discount rate is based on its estimated pre-tax cost of debt adjusted for country-specific risk. |
Asset Impairment and Exit Cos_2
Asset Impairment and Exit Costs (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Restructuring and Related Activities [Abstract] | |
Asset Impairment and Exit Costs | PMI recorded the following pre-tax asset impairment and exit costs by segment: (in millions) For the Nine Months Ended September 30, For the Three Months Ended September 30, 2019 2018 2019 2018 Separation programs: South & Southeast Asia 3 — — — Latin America & Canada 37 — 22 — Total separation programs 40 — 22 — Asset impairment charges: South & Southeast Asia 17 — — — Latin America & Canada 8 — — — Total asset impairment charges 25 — — — Asset impairment and exit costs $ 65 $ — $ 22 $ — |
Movement in Exit Cost Liabilities | The movement in exit cost liabilities for the nine months ended September 30, 2019 was as follows: (in millions) Liability balance, January 1, 2019 $ — Charges, net 40 Cash spent (21 ) Currency/other (2 ) Liability balance, September 30, 2019 $ 17 |
Stock Plans (Narrative) (Detail
Stock Plans (Narrative) (Details) $ in Millions | 9 Months Ended | |
Sep. 30, 2019USD ($)performance_metricyearshares | May 31, 2017shares | |
Restricted Stock Units (RSUs) [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation cost related to non-vested stock awards | $ | $ 153 | |
Award requisite service period | 3 years | |
Minimum retirement age | year | 58 | |
Stock awards vested during period (in shares) | 1,088,668 | |
Restricted Stock Units (RSUs) [Member] | Grant Date Fair Value [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Fair value of vested stock awards | $ | $ 97 | |
Restricted Stock Units (RSUs) [Member] | Total Fair Value [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Fair value of vested stock awards | $ | 92 | |
Performance Shares [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation cost related to non-vested stock awards | $ | $ 43 | |
Minimum retirement age | year | 58 | |
Stock awards vested during period (in shares) | 330,616 | |
Performance period | 3 years | |
Number of performance metrics used to determine the percentage of PSU's that will vest | performance_metric | 3 | |
Aggregate weighted performance factor that determines if the target number of PSUs will vest | 100.00% | |
The number of shares of common stock issue for each vested PSU | 1 | |
Performance Shares [Member] | Performance Metric, Total Shareholder Return [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance metric weight | 50.00% | |
Performance Shares [Member] | Performance Metric, Currency-Neutral Compound Annual Adjusted Operating Income Growth Rate, Excluding Acquisitions [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance metric weight | 30.00% | |
Performance Shares [Member] | Performance Metric, Performance Against Specific Measures Of Transformation [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance metric weight | 20.00% | |
Performance Shares [Member] | Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting percentage | 0.00% | |
Performance Shares [Member] | Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting percentage | 200.00% | |
Performance Shares [Member] | Grant Date Fair Value [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Fair value of vested stock awards | $ | $ 32 | |
Performance Shares [Member] | Total Fair Value [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Fair value of vested stock awards | $ | $ 28 | |
2017 Performance Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Estimated common stock to be awarded under a stock benefit plan, maximum limit (in shares) | 25,000,000 | |
Shares available for grant under the plan (in shares) | 20,117,010 | |
Non Employee Directors Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Estimated common stock to be awarded under a stock benefit plan, maximum limit (in shares) | 1,000,000 | |
Shares available for grant under the plan (in shares) | 954,084 | |
Percentage of voting shares that PMI may own, used in determining non-employee director status | 50.00% |
Stock Plans (RSU Awards) (Detai
Stock Plans (RSU Awards) (Details) - Restricted Stock Units (RSUs) [Member] - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of Shares Granted (in shares) | 1,717,230 | 1,274,730 | ||
Weighted-Average Grant Date Fair Value Per RSU Award Granted (in dollars per share) | $ 77.25 | $ 100.39 | ||
Compensation expense for stock awards | $ 27 | $ 25 | $ 91 | $ 88 |
Stock Plans (PSU Awards) (Detai
Stock Plans (PSU Awards) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Performance Shares [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of Shares Granted (in shares) | 647,700 | 401,500 | ||
Compensation expense for stock awards | $ 10 | $ (12) | $ 43 | $ 18 |
Risk-free interest rate | 2.40% | 2.30% | ||
Expected volatility | 21.40% | 19.60% | ||
Stock awards vested during period (in shares) | 330,616 | |||
Performance Share Units, TSR Relative To Customer Peer Group [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted-Average Grant Date Fair Value Per RSU Award Granted (in dollars per share) | $ 83.59 | $ 118.98 | ||
Performance Share Units, Other Performance Factors [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted-Average Grant Date Fair Value Per RSU Award Granted (in dollars per share) | $ 77.23 | $ 100.69 | ||
Grant Date Fair Value [Member] | Performance Shares [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value of vested stock awards | $ 32 | |||
Total Fair Value [Member] | Performance Shares [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value of vested stock awards | $ 28 |
Benefit Plans (Components of Pe
Benefit Plans (Components of Pension and Other Employee Benefits Costs) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Total pension and other employee benefit costs | $ 20 | $ 7 | $ 61 | $ 19 |
Pension Plan [Member] | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Total pension and other employee benefit costs | (6) | (16) | (16) | (49) |
Postemployment Benefit Plans [Member] | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Total pension and other employee benefit costs | 25 | 20 | 72 | 59 |
Postretirement Benefit Costs [Member] | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Total pension and other employee benefit costs | $ 1 | $ 3 | $ 5 | $ 9 |
Benefit Plans (Components of Ne
Benefit Plans (Components of Net Periodic Benefit Cost) (Details) - Pension Plan [Member] - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 54 | $ 52 | $ 161 | $ 159 |
Interest cost | 29 | 29 | 89 | 87 |
Expected return on plan assets | (82) | (90) | (247) | (272) |
Amortization: | ||||
Net loss | 47 | 45 | 142 | 135 |
Prior service cost | 0 | 0 | 0 | 1 |
Net periodic pension cost | $ 48 | $ 36 | $ 145 | $ 110 |
Benefit Plans (Narrative) (Deta
Benefit Plans (Narrative) (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Retirement Benefits [Abstract] | |
Employer contributions | $ 89 |
Anticipated additional employer contributions during the remainder of the current fiscal year | $ 25 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets, net (Movement in Goodwill) (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Goodwill [Roll Forward] | |
Beginning Balance | $ 7,189 |
Changes due to: | |
Currency | (6) |
Ending Balance | 5,720 |
European Union [Member] | |
Goodwill [Roll Forward] | |
Beginning Balance | 1,357 |
Changes due to: | |
Currency | (61) |
Ending Balance | 1,296 |
Eastern Europe [Member] | |
Goodwill [Roll Forward] | |
Beginning Balance | 303 |
Changes due to: | |
Currency | (10) |
Ending Balance | 293 |
Middle East & Africa [Member] | |
Goodwill [Roll Forward] | |
Beginning Balance | 87 |
Changes due to: | |
Currency | (3) |
Ending Balance | 84 |
South & Southeast Asia [Member] | |
Goodwill [Roll Forward] | |
Beginning Balance | 2,795 |
Changes due to: | |
Currency | 50 |
Ending Balance | 2,845 |
East Asia & Australia [Member] | |
Goodwill [Roll Forward] | |
Beginning Balance | 536 |
Changes due to: | |
Currency | 8 |
Ending Balance | 544 |
Latin America & Canada [Member] | |
Goodwill [Roll Forward] | |
Beginning Balance | 2,111 |
Changes due to: | |
Currency | 10 |
Ending Balance | 658 |
Deconsolidation of RBH [Member] | |
Changes due to: | |
Deconsolidation of RBH | (1,463) |
Deconsolidation of RBH [Member] | European Union [Member] | |
Changes due to: | |
Deconsolidation of RBH | |
Deconsolidation of RBH [Member] | Eastern Europe [Member] | |
Changes due to: | |
Deconsolidation of RBH | |
Deconsolidation of RBH [Member] | Middle East & Africa [Member] | |
Changes due to: | |
Deconsolidation of RBH | |
Deconsolidation of RBH [Member] | South & Southeast Asia [Member] | |
Changes due to: | |
Deconsolidation of RBH | |
Deconsolidation of RBH [Member] | East Asia & Australia [Member] | |
Changes due to: | |
Deconsolidation of RBH | |
Deconsolidation of RBH [Member] | Latin America & Canada [Member] | |
Changes due to: | |
Deconsolidation of RBH | $ (1,463) |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets, net (Other Intangible Assets) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Jun. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||
Non-amortizable intangible assets | $ 1,288,000,000 | $ 1,288,000,000 | $ 1,269,000,000 | |||
Finite-Lived Intangible Assets [Line Items] | ||||||
Amortizable intangible assets, Accumulated Amortization | 617,000,000 | 617,000,000 | 727,000,000 | |||
Total other intangible assets, gross | 2,705,000,000 | 2,705,000,000 | 3,005,000,000 | |||
Total other intangible assets, net | 2,088,000,000 | 2,088,000,000 | 2,278,000,000 | |||
Non-amortizable intangible assets, currency movements | 19,000,000 | |||||
Finite-lived intangible assets, currency movements | (13,000,000) | |||||
Amortization of intangibles | 15,000,000 | $ 20,000,000 | 50,000,000 | $ 63,000,000 | ||
Goodwill impairment charges | $ 0 | |||||
Trademarks and Distribution Networks [Member] | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Change in accumulated amortization, currency movements | 7,000,000 | |||||
Amortization of intangibles | 50,000,000 | |||||
Trademarks [Member] | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Amortizable intangible assets, Gross Carrying Amount | 1,200,000,000 | 1,200,000,000 | 1,488,000,000 | |||
Amortizable intangible assets, Accumulated Amortization | 507,000,000 | 507,000,000 | 608,000,000 | |||
Amortizable intangible assets, Net | 693,000,000 | $ 693,000,000 | 880,000,000 | |||
Weighted-Average Remaining Useful Life | 18 years | |||||
Distribution Networks [Member] | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Amortizable intangible assets, Gross Carrying Amount | 110,000,000 | $ 110,000,000 | 141,000,000 | |||
Amortizable intangible assets, Accumulated Amortization | 68,000,000 | 68,000,000 | 82,000,000 | |||
Amortizable intangible assets, Net | 42,000,000 | $ 42,000,000 | 59,000,000 | |||
Weighted-Average Remaining Useful Life | 8 years | |||||
Other [Member] | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Amortizable intangible assets, Gross Carrying Amount | 107,000,000 | $ 107,000,000 | 107,000,000 | |||
Amortizable intangible assets, Accumulated Amortization | 42,000,000 | 42,000,000 | 37,000,000 | |||
Amortizable intangible assets, Net | $ 65,000,000 | $ 65,000,000 | $ 70,000,000 | |||
Weighted-Average Remaining Useful Life | 9 years | |||||
Deconsolidation of RBH [Member] | Trademarks [Member] | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Decrease in intangible assets | $ 275,000,000 | |||||
Change in accumulated amortization | 133,000,000 | |||||
Deconsolidation of RBH [Member] | Distribution Networks [Member] | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Decrease in intangible assets | 29,000,000 | |||||
Change in accumulated amortization | $ 18,000,000 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets, net (Amortization Expense) (Details) $ in Millions | Sep. 30, 2019USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Estimated amortization expense, year one, assuming no additional transactions occur that require the amortization of intangible assets | $ 66 |
Estimated amortization expense, year two, assuming no additional transactions occur that require the amortization of intangible assets | 66 |
Estimated amortization expense, year three, assuming no additional transactions occur that require the amortization of intangible assets | 66 |
Estimated amortization expense, year four, assuming no additional transactions occur that require the amortization of intangible assets | 66 |
Estimated amortization expense, year five, assuming no additional transactions occur that require the amortization of intangible assets | $ 66 |
Financial Instruments (Narrativ
Financial Instruments (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Derivative [Line Items] | ||||
Unrealized gain (loss) on hedges of net investments | $ 12 | $ (394) | $ 363 | $ (939) |
Gain on amounts excluded from effectiveness testing | 54 | 63 | 171 | 198 |
Derivative Contract [Member] | ||||
Derivative [Line Items] | ||||
Notional amount | 24,300 | 24,300 | ||
Derivative instruments, gains to be reclassified to earnings | 4 | $ 4 | ||
Derivative Contract [Member] | Maximum [Member] | ||||
Derivative [Line Items] | ||||
Maximum length of time hedged in a cash flow hedge | 15 months | |||
Derivative Contract [Member] | Not Designated as Hedging Instrument [Member] | ||||
Derivative [Line Items] | ||||
Notional amount | 9,000 | $ 9,000 | ||
Gain on derivatives not designated as hedging instruments | 86 | (90) | 25 | 244 |
Derivative Contract [Member] | Cash Flow Hedging [Member] | ||||
Derivative [Line Items] | ||||
Notional amount | 4,000 | 4,000 | ||
Derivative Contract [Member] | Net Investment Hedging [Member] | ||||
Derivative [Line Items] | ||||
Notional amount | 11,300 | 11,300 | ||
Unrealized gain (loss) on hedges of net investments | $ 598 | $ (192) | $ 771 | $ 111 |
Financial Instruments (Fair Val
Financial Instruments (Fair Value of Derivative Contracts) (Details) - Derivative Contract [Member] - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Derivatives, Fair Value [Line Items] | ||
Derivative asset fair value | $ 453 | $ 220 |
Derivative liability fair value | 280 | 631 |
Designated as Hedging Instrument [Member] | Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset fair value | 342 | 54 |
Designated as Hedging Instrument [Member] | Other Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset fair value | 59 | 99 |
Designated as Hedging Instrument [Member] | Other Accrued Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability fair value | 30 | 47 |
Designated as Hedging Instrument [Member] | Income Taxes and Other Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability fair value | 212 | 525 |
Not Designated as Hedging Instrument [Member] | Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset fair value | 52 | 67 |
Not Designated as Hedging Instrument [Member] | Other Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset fair value | 0 | 0 |
Not Designated as Hedging Instrument [Member] | Other Accrued Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability fair value | 25 | 46 |
Not Designated as Hedging Instrument [Member] | Income Taxes and Other Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability fair value | $ 13 | $ 13 |
Financial Instruments (Cash Flo
Financial Instruments (Cash Flow and Net Investment Hedging Activities Effect on Condensed Consolidated Statements of Earnings and Other Comprehensive Earnings) (Details) - Derivative Contract [Member] - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain/(Loss) Recognized in Other Comprehensive Earnings/(Losses) on Derivatives in Cash Flow Hedging Relationship | $ (16) | $ 45 | $ (39) | $ 33 |
Amount of Gain/(Loss) Recognized in Other Comprehensive Earnings/(Losses) on Derivatives in Net Investment Hedging Relationship | 419 | (145) | 564 | (7) |
Total Amount of Gain/(Loss) Recognized in Other Comprehensive Earnings/(Losses) on Derivatives | 403 | (100) | 525 | 26 |
Amount of Gain/(Loss) Reclassified from Other Comprehensive Earnings/(Losses) into Earnings | (13) | 11 | 15 | (2) |
Net Revenue [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain/(Loss) Reclassified from Other Comprehensive Earnings/(Losses) into Earnings | (7) | 2 | 22 | (5) |
Cost of Sales [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain/(Loss) Reclassified from Other Comprehensive Earnings/(Losses) into Earnings | 0 | 0 | 0 | 0 |
Marketing Administration And Research Costs [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain/(Loss) Reclassified from Other Comprehensive Earnings/(Losses) into Earnings | (4) | 10 | (3) | 7 |
Interest Expense, Net [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain/(Loss) Reclassified from Other Comprehensive Earnings/(Losses) into Earnings | (2) | (1) | (4) | (4) |
Not Designated as Hedging Instrument [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative, Gain (Loss) on Derivative, Net | 31 | 20 | 79 | 30 |
Not Designated as Hedging Instrument [Member] | Interest Income Expense Net [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative, Gain (Loss) on Derivative, Net | $ 31 | $ 20 | $ 79 | $ 30 |
Financial Instruments (Qualifyi
Financial Instruments (Qualifying Hedging Activity Reported in Accumulated Other Comprehensive Earnings (Losses) Net of Income Taxes) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Hedging Activity, Affecting Accumulated Other Comprehensive Income [Roll Forward] | ||||
Derivative (gains)/losses transferred to earnings | $ 13 | $ (15) | $ (12) | $ (9) |
Change in fair value | (14) | 40 | (34) | 29 |
Other Comprehensive Income (Loss) [Member] | Derivative Contract [Member] | ||||
Hedging Activity, Affecting Accumulated Other Comprehensive Income [Roll Forward] | ||||
Gain/(loss) at beginning of period | (10) | 37 | 35 | 42 |
Derivative (gains)/losses transferred to earnings | 13 | (15) | (12) | (9) |
Change in fair value | (14) | 40 | (34) | 29 |
Gain/(loss) as of September 30, | $ (11) | $ 62 | $ (11) | $ 62 |
Earnings Per Share (Calculation
Earnings Per Share (Calculation of Basic and Diluted EPS) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Earnings Per Share [Abstract] | ||||
Net earnings attributable to PMI | $ 1,896 | $ 2,247 | $ 5,569 | $ 6,001 |
Less distributed and undistributed earnings attributable to share-based payment awards | 5 | 5 | 13 | 13 |
Net earnings for basic and diluted EPS | $ 1,891 | $ 2,242 | $ 5,556 | $ 5,988 |
Weighted-average shares for basic EPS (in shares) | 1,556,000,000 | 1,555,000,000 | 1,556,000,000 | 1,555,000,000 |
Plus contingently issuable performance stock units (PSUs) (in shares) | 0 | 0 | 0 | 0 |
Weighted-average shares for diluted EPS (in shares) | 1,556,000,000 | 1,555,000,000 | 1,556,000,000 | 1,555,000,000 |
Antidilutive stock awards (in shares) | 0 | 0 | 0 | 0 |
Segment Reporting (Details)
Segment Reporting (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)segment | Sep. 30, 2018USD ($) | |
Segment Reporting Information [Line Items] | |||||
Number of reportable segments | segment | 6 | ||||
Total PMI net revenues | $ 7,642 | $ 7,504 | $ 22,092 | $ 22,126 | |
Operating income | 2,788 | 3,156 | 8,025 | 8,675 | |
Asset impairment and exit costs | 22 | 0 | 65 | 0 | |
Combustible Products [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total PMI net revenues | 6,298 | 6,681 | 18,039 | 19,156 | |
Reduced-Risk Products [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total PMI net revenues | 1,344 | 823 | 4,053 | 2,970 | |
Operating Segments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total PMI net revenues | 22,092 | ||||
Operating income | 8,025 | 8,675 | |||
Operating Segments [Member] | European Union [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total PMI net revenues | 2,645 | 2,467 | 7,381 | 6,958 | |
Operating income | 1,255 | 1,179 | 3,346 | 3,096 | |
Operating Segments [Member] | European Union [Member] | Combustible Products [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total PMI net revenues | 2,178 | 2,225 | 6,139 | 6,381 | |
Operating Segments [Member] | European Union [Member] | Reduced-Risk Products [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total PMI net revenues | 467 | 242 | 1,242 | 577 | |
Operating Segments [Member] | Eastern Europe [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total PMI net revenues | 899 | 778 | 2,300 | 2,105 | |
Operating income | (101) | 270 | 284 | 682 | |
Operating Segments [Member] | Eastern Europe [Member] | Combustible Products [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total PMI net revenues | 664 | 705 | 1,774 | 1,926 | |
Operating Segments [Member] | Eastern Europe [Member] | Reduced-Risk Products [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total PMI net revenues | 235 | 73 | 526 | 179 | |
Operating Segments [Member] | Middle East & Africa [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total PMI net revenues | 1,127 | 1,143 | 3,058 | 3,126 | |
Operating income | 519 | 491 | 1,304 | 1,268 | |
Operating Segments [Member] | Middle East & Africa [Member] | Combustible Products [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total PMI net revenues | 1,064 | 1,019 | 2,810 | 2,813 | |
Operating Segments [Member] | Middle East & Africa [Member] | Reduced-Risk Products [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total PMI net revenues | 63 | 124 | 248 | 313 | |
Operating Segments [Member] | South & Southeast Asia [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total PMI net revenues | 1,246 | 1,197 | 3,607 | 3,434 | |
Operating income | 539 | 455 | 1,471 | 1,324 | |
Operating Segments [Member] | South & Southeast Asia [Member] | Combustible Products [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total PMI net revenues | 1,246 | 1,197 | 3,607 | 3,434 | |
Operating Segments [Member] | South & Southeast Asia [Member] | Reduced-Risk Products [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total PMI net revenues | 0 | 0 | 0 | 0 | |
Operating Segments [Member] | East Asia & Australia [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total PMI net revenues | 1,252 | 1,166 | 4,094 | 4,235 | |
Operating income | 451 | 426 | 1,520 | 1,439 | |
Operating Segments [Member] | East Asia & Australia [Member] | Combustible Products [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total PMI net revenues | 680 | 789 | 2,074 | 2,348 | |
Operating Segments [Member] | East Asia & Australia [Member] | Reduced-Risk Products [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total PMI net revenues | 572 | 377 | 2,020 | 1,887 | |
Operating Segments [Member] | Latin America & Canada [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total PMI net revenues | 473 | 753 | 1,652 | 2,268 | |
Operating income | 125 | 335 | 100 | 866 | |
Operating Segments [Member] | Latin America & Canada [Member] | Combustible Products [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total PMI net revenues | 466 | 748 | 1,634 | 2,254 | |
Operating Segments [Member] | Latin America & Canada [Member] | Reduced-Risk Products [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total PMI net revenues | 7 | $ 5 | 18 | $ 14 | |
Other Litigation [Member] | The Moscow Tax Inspectorate for Major Taxpayers Audit [Member] | Eastern Europe [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Amount of pre-tax charge related to alleged underpayment of excise taxes and VAT claimed by tax authority, including penalties and interest | $ 374 | 374 | |||
Smoking And Health Class Actions [Member] | RBH [Member] | Appellate Ruling [Member] | Cecilia Letourneau & Conseil Quebecois Sur La Tabac Et La Sante and Jean-Yves Blais Cases [Member] | Canada [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Amount of litigation charge | $ 194 | 194 | |||
Marketing Administration And Research Costs [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Deconsolidation amount | $ 239 |
Contingencies (Number of Tobacc
Contingencies (Number of Tobacco Related Cases Pertaining to Combustible Products Pending Against Us and/or Our Subsidiaries or Indemnitees) (Details) - Combustible Products [Member] - litigation_case | Oct. 22, 2019 | Oct. 23, 2018 | Oct. 23, 2017 |
Individual Smoking And Health Cases [Member] | |||
Loss Contingencies [Line Items] | |||
Cases brought against PM | 63 | 65 | |
Smoking And Health Class Actions [Member] | |||
Loss Contingencies [Line Items] | |||
Cases brought against PM | 10 | 11 | |
Health Care Cost Recovery Actions [Member] | |||
Loss Contingencies [Line Items] | |||
Cases brought against PM | 16 | 16 | |
Label Related Class Action [Member] | |||
Loss Contingencies [Line Items] | |||
Cases brought against PM | 1 | ||
Individual Label Related Cases [Member] | |||
Loss Contingencies [Line Items] | |||
Cases brought against PM | 1 | 1 | |
Public Civil Actions [Member] | |||
Loss Contingencies [Line Items] | |||
Cases brought against PM | 2 | 2 | |
Subsequent Event [Member] | Individual Smoking And Health Cases [Member] | |||
Loss Contingencies [Line Items] | |||
Cases brought against PM | 49 | ||
Subsequent Event [Member] | Smoking And Health Class Actions [Member] | |||
Loss Contingencies [Line Items] | |||
Cases brought against PM | 10 | ||
Subsequent Event [Member] | Health Care Cost Recovery Actions [Member] | |||
Loss Contingencies [Line Items] | |||
Cases brought against PM | 17 | ||
Subsequent Event [Member] | Label Related Class Action [Member] | |||
Loss Contingencies [Line Items] | |||
Cases brought against PM | 0 | ||
Subsequent Event [Member] | Individual Label Related Cases [Member] | |||
Loss Contingencies [Line Items] | |||
Cases brought against PM | 5 | ||
Subsequent Event [Member] | Public Civil Actions [Member] | |||
Loss Contingencies [Line Items] | |||
Cases brought against PM | 2 |
Contingencies (Tobacco-Related
Contingencies (Tobacco-Related Litigation) (Details) | Sep. 30, 2019litigation_case |
Loss Contingencies [Line Items] | |
Number of cases decided in favor of PM | 500 |
Number of cases decided in favor of plaintiff | 13 |
Cases Remaining On Appeal [Member] | |
Loss Contingencies [Line Items] | |
Cases on appeal | 4 |
Case Decided In Favor Of Plaintiff [Member] | |
Loss Contingencies [Line Items] | |
Number of cases that reached final resolution in favor of PM | 9 |
Contingencies (Verdicts and Pos
Contingencies (Verdicts and Post-Trial Developments) (Details) | Mar. 01, 2019USD ($) | Mar. 01, 2019CAD ($) | Aug. 05, 2016USD ($) | Aug. 05, 2016ARS ($) | May 27, 2015USD ($) | May 27, 2015CAD ($) | Apr. 30, 2004USD ($) | Apr. 30, 2004BRL (R$) |
Brazil [Member] | Smoking And Health Class Actions [Member] | The Smoker Health Defense Association (ADESF) [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Smoking and health loss contingency interest rate (percentage per month) | 1.00% | 1.00% | ||||||
Brazil [Member] | Smoking And Health Class Actions [Member] | Award per smoker per year [Member] | The Smoker Health Defense Association (ADESF) [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Damages awarded | $ 243 | R$ 1000 | ||||||
Canada [Member] | Smoking And Health Class Actions [Member] | Cecilia Letourneau [Member] | Judicial Ruling [Member] | Imperial Tobacco Ltd., Rothmans, Benson And Hedges Inc., And JTI Macdonald Corp. [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Punitive damages awarded | $ 99,800,000 | $ 131,000,000 | ||||||
Canada [Member] | Smoking And Health Class Actions [Member] | Cecilia Letourneau [Member] | Judicial Ruling [Member] | RBH [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Punitive damages awarded | $ 35,000,000 | $ 46,000,000 | ||||||
Payment period for awarded punitive damages to be deposited into trust | 60 days | 60 days | ||||||
Canada [Member] | Smoking And Health Class Actions [Member] | Conseil Quebecois Sur Le Tabac Et La Sante and Jean-Yves Blais [Member] | Judicial Ruling [Member] | Imperial Tobacco Ltd., Rothmans, Benson And Hedges Inc., And JTI Macdonald Corp. [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Punitive damages awarded | $ 68,530 | $ 90,000 | ||||||
Compensatory damages awarded | 11,800,000,000 | 15,500,000,000 | ||||||
Awarded compensatory damages that are to be deposited into trust | 761,500,000 | 1,000,000,000 | ||||||
Canada [Member] | Smoking And Health Class Actions [Member] | Conseil Quebecois Sur Le Tabac Et La Sante and Jean-Yves Blais [Member] | Judicial Ruling [Member] | RBH [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Punitive damages awarded | 22,840 | 30,000 | ||||||
Compensatory damages awarded | $ 2,060,000,000 | $ 2,700,000,000 | $ 2,360,000,000 | $ 3,100,000,000 | ||||
Damages allocated to subsidiary (percent) | 20.00% | 20.00% | 20.00% | 20.00% | ||||
Awarded compensatory damages that are to be deposited into trust | $ 152,300,000 | $ 200,000,000 | ||||||
Payment period for compensatory damages to be deposited into trust | 60 days | 60 days | ||||||
Argentina [Member] | Individual Action [Member] | Hugo Lespada [Member] | Judicial Ruling [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Compensatory damages awarded | $ 1,887 | $ 110,000 |
Contingencies (Smoking and Heal
Contingencies (Smoking and Health Litigation) (Details) | Mar. 01, 2019USD ($) | Mar. 01, 2019CAD ($) | May 27, 2015USD ($)manufacturerplaintiff | May 27, 2015CAD ($)manufacturerplaintiff | Jun. 20, 2012cigarette | Jul. 10, 2009cigarette | Oct. 30, 2015USD ($) | Oct. 30, 2015CAD ($) | Apr. 30, 2004USD ($) | Apr. 30, 2004BRL (R$) | Mar. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Oct. 22, 2019litigation_case | Oct. 23, 2018litigation_case | Oct. 23, 2017litigation_case |
Brazil [Member] | The Smoker Health Defense Association (ADESF) [Member] | Smoking And Health Class Actions [Member] | |||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||
Smoking and health loss contingency interest rate | 1.00% | 1.00% | |||||||||||||
Brazil [Member] | The Smoker Health Defense Association (ADESF) [Member] | Award per smoker per year [Member] | Smoking And Health Class Actions [Member] | |||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||
Damages awarded | $ 243 | R$ 1000 | |||||||||||||
Canada [Member] | Cecilia Letourneau [Member] | Smoking And Health Class Actions [Member] | |||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||
Number of additional manufacturers found liable | manufacturer | 2 | 2 | |||||||||||||
Court-estimated number of members in class | plaintiff | 918,000 | 918,000 | |||||||||||||
Canada [Member] | Cecilia Letourneau [Member] | Judicial Ruling [Member] | Imperial Tobacco Ltd., Rothmans, Benson And Hedges Inc., And JTI Macdonald Corp. [Member] | Smoking And Health Class Actions [Member] | |||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||
Punitive damages awarded | $ 99,800,000 | $ 131,000,000 | |||||||||||||
Canada [Member] | Cecilia Letourneau [Member] | Judicial Ruling [Member] | RBH [Member] | Smoking And Health Class Actions [Member] | |||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||
Punitive damages awarded | $ 35,000,000 | $ 46,000,000 | |||||||||||||
Punitive damages awarded including interest | $ 43,400,000 | $ 57,000,000 | |||||||||||||
Payment period for awarded punitive damages to be deposited into trust | 60 days | 60 days | |||||||||||||
Canada [Member] | Conseil Quebecois Sur Le Tabac Et La Sante and Jean-Yves Blais [Member] | Smoking And Health Class Actions [Member] | |||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||
Number of additional manufacturers found liable | manufacturer | 2 | 2 | |||||||||||||
Court-estimated number of members in class | plaintiff | 99,957 | 99,957 | |||||||||||||
Canada [Member] | Conseil Quebecois Sur Le Tabac Et La Sante and Jean-Yves Blais [Member] | Judicial Ruling [Member] | Imperial Tobacco Ltd., Rothmans, Benson And Hedges Inc., And JTI Macdonald Corp. [Member] | Smoking And Health Class Actions [Member] | |||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||
Punitive damages awarded | $ 68,530 | $ 90,000 | |||||||||||||
Compensatory damages awarded | 11,800,000,000 | 15,500,000,000 | |||||||||||||
Damages awarded, reduced amount | 10,300,000,000 | 13,500,000,000 | |||||||||||||
Canada [Member] | Conseil Quebecois Sur Le Tabac Et La Sante and Jean-Yves Blais [Member] | Judicial Ruling [Member] | RBH [Member] | Smoking And Health Class Actions [Member] | |||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||
Punitive damages awarded | 22,840 | 30,000 | |||||||||||||
Compensatory damages awarded | $ 2,060,000,000 | $ 2,700,000,000 | $ 2,360,000,000 | $ 3,100,000,000 | |||||||||||
Damages allocated to subsidiary (percent) | 20.00% | 20.00% | 20.00% | 20.00% | |||||||||||
Canada [Member] | Cecilia Letourneau & Conseil Quebecois Sur La Tabac Et La Sante and Jean-Yves Blais Cases [Member] | Judicial Ruling [Member] | Imperial Tobacco Ltd., Rothmans, Benson And Hedges Inc., And JTI Macdonald Corp. [Member] | Smoking And Health Class Actions [Member] | |||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||
Damages awarded that are to be deposited into trust | $ 837,600,000 | $ 1,100,000,000 | |||||||||||||
Payment period for amount to be deposited into trust | 60 days | 60 days | |||||||||||||
Canada [Member] | Cecilia Letourneau & Conseil Quebecois Sur La Tabac Et La Sante and Jean-Yves Blais Cases [Member] | Appellate Ruling [Member] | RBH [Member] | Smoking And Health Class Actions [Member] | |||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||
Amount of security ordered to be furnished and paid | $ 172,100,000 | $ 226,000,000 | |||||||||||||
Amount of security ordered, funded by defendant | $ 195,700,000 | $ 257,000,000 | |||||||||||||
Amount of litigation charge | $ | $ 194,000,000 | $ 194,000,000 | |||||||||||||
Amount of litigation charge net of tax | $ | $ 142,000,000 | ||||||||||||||
Canada [Member] | Cecilia Letourneau & Conseil Quebecois Sur La Tabac Et La Sante and Jean-Yves Blais Cases [Member] | Appellate Ruling [Member] | Imperial Tobacco Ltd. [Member] | Smoking And Health Class Actions [Member] | |||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||
Loss Contingency, Motion for Security Ordered by Appeals Court | $ 577,200,000 | $ 758,000,000 | |||||||||||||
Canada [Member] | Adams [Member] | Pending Litigation [Member] | |||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||
Plaintiff requirement, Minimum number of cigarettes smoked | cigarette | 25,000 | ||||||||||||||
Canada [Member] | Suzanne Jacklin [Member] | Pending Litigation [Member] | |||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||
Plaintiff requirement, Minimum number of cigarettes smoked | cigarette | 25,000 | ||||||||||||||
Combustible Products [Member] | Individual Smoking And Health Cases [Member] | |||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||
Cases brought against PM | 63 | 65 | |||||||||||||
Combustible Products [Member] | Smoking And Health Class Actions [Member] | |||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||
Cases brought against PM | 10 | 11 | |||||||||||||
Combustible Products [Member] | Subsequent Event [Member] | Individual Smoking And Health Cases [Member] | |||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||
Cases brought against PM | 49 | ||||||||||||||
Combustible Products [Member] | Subsequent Event [Member] | Smoking And Health Class Actions [Member] | |||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||
Cases brought against PM | 10 | ||||||||||||||
Combustible Products [Member] | Subsequent Event [Member] | Argentina [Member] | Individual Smoking And Health Cases [Member] | |||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||
Cases brought against PM | 31 | ||||||||||||||
Combustible Products [Member] | Subsequent Event [Member] | Brazil [Member] | Individual Smoking And Health Cases [Member] | |||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||
Cases brought against PM | 5 | ||||||||||||||
Combustible Products [Member] | Subsequent Event [Member] | Brazil [Member] | Smoking And Health Class Actions [Member] | |||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||
Cases brought against PM | 1 | ||||||||||||||
Combustible Products [Member] | Subsequent Event [Member] | Canada [Member] | Individual Smoking And Health Cases [Member] | |||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||
Cases brought against PM | 2 | ||||||||||||||
Combustible Products [Member] | Subsequent Event [Member] | Canada [Member] | Smoking And Health Class Actions [Member] | |||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||
Cases brought against PM | 9 | ||||||||||||||
Combustible Products [Member] | Subsequent Event [Member] | Chile [Member] | Individual Smoking And Health Cases [Member] | |||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||
Cases brought against PM | 4 | ||||||||||||||
Combustible Products [Member] | Subsequent Event [Member] | Costa Rica [Member] | Individual Smoking And Health Cases [Member] | |||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||
Cases brought against PM | 1 | ||||||||||||||
Combustible Products [Member] | Subsequent Event [Member] | Italy [Member] | Individual Smoking And Health Cases [Member] | |||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||
Cases brought against PM | 1 | ||||||||||||||
Combustible Products [Member] | Subsequent Event [Member] | Philippines [Member] | Individual Smoking And Health Cases [Member] | |||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||
Cases brought against PM | 1 | ||||||||||||||
Combustible Products [Member] | Subsequent Event [Member] | Poland [Member] | Individual Smoking And Health Cases [Member] | |||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||
Cases brought against PM | 2 | ||||||||||||||
Combustible Products [Member] | Subsequent Event [Member] | Turkey [Member] | Individual Smoking And Health Cases [Member] | |||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||
Cases brought against PM | 1 | ||||||||||||||
Combustible Products [Member] | Subsequent Event [Member] | Scotland [Member] | Individual Smoking And Health Cases [Member] | |||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||
Cases brought against PM | 1 |
Contingencies (Health Care Cost
Contingencies (Health Care Cost Recovery Litigation) (Details) - Health Care Cost Recovery Actions [Member] | Apr. 14, 2014patient | Oct. 17, 2008 | Mar. 13, 2008 | Feb. 26, 2008 | May 25, 2007 | May 09, 2007 | Oct. 22, 2019litigation_case | Oct. 23, 2018litigation_case | Oct. 23, 2017litigation_case |
Korea [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Damages sought, number of patients | patient | 3,484 | ||||||||
Nigeria [Member] | Pending Litigation [Member] | The Attorney General Of Lagos State [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Damages sought, period of past reimbursements | 20 years | ||||||||
Damages sought, period of future reimbursements | 20 years | ||||||||
Nigeria [Member] | Pending Litigation [Member] | The Attorney General Of Kano State [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Damages sought, period of past reimbursements | 20 years | ||||||||
Damages sought, period of future reimbursements | 20 years | ||||||||
Nigeria [Member] | Pending Litigation [Member] | The Attorney General Of Gombe State [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Damages sought, period of past reimbursements | 20 years | ||||||||
Damages sought, period of future reimbursements | 20 years | ||||||||
Nigeria [Member] | Pending Litigation [Member] | The Attorney General Of Oyo State [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Damages sought, period of past reimbursements | 20 years | ||||||||
Damages sought, period of future reimbursements | 20 years | ||||||||
Nigeria [Member] | Pending Litigation [Member] | The Attorney General Of Ogun State [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Damages sought, period of past reimbursements | 20 years | ||||||||
Damages sought, period of future reimbursements | 20 years | ||||||||
Combustible Products [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Cases brought against PM | 16 | 16 | |||||||
Combustible Products [Member] | Subsequent Event [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Cases brought against PM | 17 | ||||||||
Combustible Products [Member] | Subsequent Event [Member] | Canada [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Cases brought against PM | 10 | ||||||||
Combustible Products [Member] | Subsequent Event [Member] | Brazil [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Cases brought against PM | 1 | ||||||||
Combustible Products [Member] | Subsequent Event [Member] | Korea [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Cases brought against PM | 1 | ||||||||
Combustible Products [Member] | Subsequent Event [Member] | Nigeria [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Cases brought against PM | 5 |
Contingencies (Label-Related Ca
Contingencies (Label-Related Cases) (Details) plaintiff in Millions | Jul. 18, 2017plaintiff | Oct. 22, 2019litigation_case | Oct. 23, 2018litigation_case | Oct. 23, 2017litigation_case |
Purported Label Related Class Action [Member] | Aharon Ringer V. Philip Morris Ltd. And Globrands Ltd. [Member] | ||||
Loss Contingencies [Line Items] | ||||
Estimated number of members in purported class | plaintiff | 7 | |||
Combustible Products [Member] | Individual Label Related Cases [Member] | ||||
Loss Contingencies [Line Items] | ||||
Cases brought against PM | 1 | 1 | ||
Combustible Products [Member] | Individual Label Related Cases [Member] | Subsequent Event [Member] | ||||
Loss Contingencies [Line Items] | ||||
Cases brought against PM | 5 | |||
Combustible Products [Member] | Individual Label Related Cases [Member] | Subsequent Event [Member] | Italy [Member] | ||||
Loss Contingencies [Line Items] | ||||
Cases brought against PM | 1 | |||
Combustible Products [Member] | Individual Label Related Cases [Member] | Subsequent Event [Member] | Chile [Member] | ||||
Loss Contingencies [Line Items] | ||||
Cases brought against PM | 4 |
Contingencies (Public Civil Act
Contingencies (Public Civil Actions) (Details) - Combustible Products [Member] - Public Civil Actions [Member] - litigation_case | Oct. 22, 2019 | Oct. 23, 2018 | Oct. 23, 2017 |
Loss Contingencies [Line Items] | |||
Cases brought against PM | 2 | 2 | |
Subsequent Event [Member] | |||
Loss Contingencies [Line Items] | |||
Cases brought against PM | 2 | ||
Subsequent Event [Member] | Argentina [Member] | |||
Loss Contingencies [Line Items] | |||
Cases brought against PM | 1 | ||
Subsequent Event [Member] | Venezuela [Member] | |||
Loss Contingencies [Line Items] | |||
Cases brought against PM | 1 |
Contingencies (Other Litigation
Contingencies (Other Litigation) (Details) - Other Litigation [Member] $ in Millions, ₽ in Billions, ₩ in Billions, ฿ in Billions | Jan. 26, 2017USD ($) | Jan. 26, 2017THB (฿) | Jan. 18, 2016USD ($)defendant | Jan. 18, 2016THB (฿)defendant | Sep. 30, 2019USD ($) | Sep. 30, 2019RUB (₽) | Mar. 31, 2017USD ($) | Mar. 31, 2017KRW (₩) | Mar. 31, 2017USD ($) | Mar. 31, 2017KRW (₩) | Sep. 30, 2019USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2016KRW (₩) |
Thailand [Member] | The Department of Special Investigations of the Government of Thailand [Member] | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Loss contingency, damages sought, value | $ 650 | ฿ 19.8 | |||||||||||
Thailand [Member] | The Department of Special Investigations of the Government of Thailand [Member] | Pending Litigation [Member] | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Number of defendants | defendant | 8 | 8 | |||||||||||
Loss contingency, damages sought, value | $ 2,650 | ฿ 80.8 | |||||||||||
Korea [Member] | The South Korean Board Of Audit And Inspection [Member] | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Amounts paid | $ 146 | ₩ 172 | $ 231 | ₩ 272 | $ 85 | ₩ 100 | |||||||
Eastern Europe [Member] | The Moscow Tax Inspectorate for Major Taxpayers Audit [Member] | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Amount of alleged underpayment of excise taxes and VAT claimed by tax authority, including penalties and interest | $ 374 | ₽ 24.3 | |||||||||||
Amount of pre-tax charge related to alleged underpayment of excise taxes and VAT claimed by tax authority, including penalties and interest | $ 374 | $ 374 | |||||||||||
Amount of after-tax charge related to alleged underpayment of excise taxes and VAT claimed by tax authority, including penalties and interest | $ 315 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2019 | |
Income Taxes [Line Items] | |||||
Effective tax rate | 24.10% | 23.00% | 22.20% | 23.30% | |
Forecast [Member] | |||||
Income Taxes [Line Items] | |||||
Effective tax rate | 23.00% | ||||
Tax Years 2015-2018 [Member] | |||||
Income Taxes [Line Items] | |||||
Tax adjustments | $ 67 | ||||
RBH [Member] | |||||
Income Taxes [Line Items] | |||||
Tax adjustments | $ 49 |
Indebtedness (Narrative) (Detai
Indebtedness (Narrative) (Details) - USD ($) | Sep. 30, 2019 | Jan. 28, 2019 | Dec. 31, 2018 |
Line of Credit Facility [Line Items] | |||
Short-term borrowings, carrying value | $ 355,000,000 | $ 730,000,000 | |
Committed credit facilities | 8,000,000,000 | ||
Borrowings under committed credit facilities | 0 | ||
364-day revolving credit expiring February 4, 2020 [Member] | |||
Line of Credit Facility [Line Items] | |||
Committed credit facilities | $ 2,000,000,000 | $ 2,000,000,000 | |
2.000% Notes [Member] | US Dollar Notes [Member] | |||
Line of Credit Facility [Line Items] | |||
Interest rate | 2.00% | ||
1.750% Notes [Member] | Euro Notes [Member] | |||
Line of Credit Facility [Line Items] | |||
Interest rate | 1.75% |
Indebtedness (Long-Term Debt) (
Indebtedness (Long-Term Debt) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | ||
Long-term Debt and Lease Obligation, Including Current Maturities | $ 31,461 | $ 31,029 |
Less current portion of long-term debt | 5,035 | 4,054 |
Long-term Debt | 26,426 | 26,975 |
US Dollar Notes [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt and Lease Obligation, Including Current Maturities | $ 20,526 | 20,819 |
Interest rate, average | 3.461% | |
US Dollar Notes [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 1.875% | |
US Dollar Notes [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 6.375% | |
Euro Notes [Member] | Foreign Currency Obligations [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt and Lease Obligation, Including Current Maturities | $ 9,594 | 8,656 |
Interest rate, average | 1.95% | |
Euro Notes [Member] | Foreign Currency Obligations [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 0.125% | |
Euro Notes [Member] | Foreign Currency Obligations [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 3.125% | |
Swiss Franc Notes [Member] | Foreign Currency Obligations [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt and Lease Obligation, Including Current Maturities | $ 1,159 | 1,374 |
Interest rate, average | 1.337% | |
Swiss Franc Notes [Member] | Foreign Currency Obligations [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 0.75% | |
Swiss Franc Notes [Member] | Foreign Currency Obligations [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 2.00% | |
Other [Member] | Foreign Currency Obligations [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt and Lease Obligation, Including Current Maturities | $ 182 | $ 180 |
Interest rate, average | 3.283% |
Indebtedness (Credit Facilities
Indebtedness (Credit Facilities) (Details) - USD ($) $ in Billions | Jan. 28, 2019 | Sep. 30, 2019 |
Line of Credit Facility [Line Items] | ||
Committed credit facilities | $ 8 | |
Multi-year revolving credit, expiring February 28, 2021 [Member] | ||
Line of Credit Facility [Line Items] | ||
Committed credit facilities | 2.5 | |
Multi-year revolving credit, expiring October 1, 2022 [Member] | ||
Line of Credit Facility [Line Items] | ||
Committed credit facilities | 3.5 | |
364-day revolving credit expiring February 4, 2020 [Member] | ||
Line of Credit Facility [Line Items] | ||
Committed credit facilities | $ 2 | $ 2 |
Debt term | 364 days |
Indebtedness (Debt Issuances Du
Indebtedness (Debt Issuances During Current Period) (Details) | Sep. 30, 2019USD ($) | Sep. 30, 2019EUR (€) |
US Dollar Notes [Member] | 2.875% US Dollar Notes Due May 2024 [Member] | ||
Debt Instrument [Line Items] | ||
Face Value | $ 900,000,000 | |
Interest Rate | 2.875% | 2.875% |
US Dollar Notes [Member] | 3.375% US Dollar Notes Due August 2029 [Member] | ||
Debt Instrument [Line Items] | ||
Face Value | $ 750,000,000 | |
Interest Rate | 3.375% | 3.375% |
Euro Notes [Member] | 0.125% Euro Notes Due August 2026 [Member] | ||
Debt Instrument [Line Items] | ||
Face Value | $ 557,000,000 | € 500,000,000 |
Interest Rate | 0.125% | 0.125% |
Euro Notes [Member] | 0.800% Euro Notes Due August 2031 [Member] | ||
Debt Instrument [Line Items] | ||
Face Value | $ 835,000,000 | € 750,000,000 |
Interest Rate | 0.80% | 0.80% |
Euro Notes [Member] | 1.450% Euro Notes Due August 2039 [Member] | ||
Debt Instrument [Line Items] | ||
Face Value | $ 835,000,000 | € 750,000,000 |
Interest Rate | 1.45% | 1.45% |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) $ in Millions | Sep. 30, 2019USD ($) |
Fair Value Disclosures [Abstract] | |
Finance lease obligations, carrying value | $ 38 |
Debt excluding short-term borrowings and capital lease obligations, carrying value | $ 31,423 |
Fair Value Measurements (Aggreg
Fair Value Measurements (Aggregate Fair Value of Derivative Financial Instruments, Equity Securities and Debt (Details) $ in Millions | Sep. 30, 2019USD ($) |
Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) [Member] | |
Assets: | |
Equity securities | $ 282 |
Derivative contracts | 0 |
Total assets | 282 |
Liabilities: | |
Debt | 33,663 |
Derivative contracts | 0 |
Total liabilities | 33,663 |
Significant Other Observable Inputs (Level 2) [Member] | |
Assets: | |
Equity securities | 0 |
Derivative contracts | 453 |
Total assets | 453 |
Liabilities: | |
Debt | 165 |
Derivative contracts | 280 |
Total liabilities | 445 |
Significant Unobservable Inputs (Level 3) [Member] | |
Assets: | |
Equity securities | 0 |
Derivative contracts | 0 |
Total assets | 0 |
Liabilities: | |
Debt | 0 |
Derivative contracts | 0 |
Total liabilities | 0 |
Fair Value [Member] | |
Assets: | |
Equity securities | 282 |
Derivative contracts | 453 |
Total assets | 735 |
Liabilities: | |
Debt | 33,828 |
Derivative contracts | 280 |
Total liabilities | $ 34,108 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Losses (Components of Accumulated Other Comprehensive Earnings (Losses), Net of Tax) (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||||
Total accumulated other comprehensive losses | $ (9,155) | $ (9,409) | $ (10,739) | $ (9,942) | $ (10,168) | $ (10,230) |
Currency translation adjustments [Member] | ||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||||
Total accumulated other comprehensive losses | (5,649) | (6,500) | (6,595) | |||
Pension and other benefits [Member] | ||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||||
Total accumulated other comprehensive losses | (3,306) | (3,646) | (2,666) | |||
Derivatives accounted for as hedges [Member] | ||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||||
Total accumulated other comprehensive losses | (11) | 35 | 62 | |||
Accumulated Other Comprehensive Losses [Member] | ||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||||
Total accumulated other comprehensive losses | $ (8,966) | $ (9,051) | $ (10,111) | $ (9,199) | $ (8,908) | $ (8,535) |
Balance Sheet Offsetting (Detai
Balance Sheet Offsetting (Details) - Derivative Contract [Member] - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Assets | ||
Gross Amounts Recognized | $ 453 | $ 220 |
Gross Amount Offset in the Condensed Consolidated Balance Sheet | 0 | 0 |
Net Amounts Presented in the Condensed Consolidated Balance Sheet | 453 | 220 |
Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet, Financial Instruments | (260) | (124) |
Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet, Cash Collateral Received/Pledged | (141) | (80) |
Net Amount | 52 | 16 |
Liabilities | ||
Gross Amounts Recognized | 280 | 631 |
Gross Amount Offset in the Condensed Consolidated Balance Sheet | 0 | 0 |
Net Amounts Presented in the Condensed Consolidated Balance Sheet | 280 | 631 |
Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet, Financial Instruments | (260) | (124) |
Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet, Cash Collateral Received/Pledged | (15) | (427) |
Net Amount | $ 5 | $ 80 |
Investments in Unconsolidated_3
Investments in Unconsolidated Subsidiaries, Equity Securities and Other Related Parties (Narrative) (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | Mar. 22, 2019 | |
Schedule of Equity Method Investments [Line Items] | |||
Equity method investments | $ 1,036 | $ 981 | |
Difference between equity method investment carrying value and book value | 877 | 835 | |
Dividends from unconsolidated subsidiaries | $ 83 | 118 | |
PMM [Member] | TTI [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership percentage | 33.00% | ||
STAEM [Member] | EITA [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership percentage | 51.00% | ||
STAEM [Member] | Management Et Developpement Des Actifs Et Des Ressources Holding (MADAR Holding) [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership percentage | 49.00% | ||
Godfrey Phillips India Ltd [Member] | IPM India [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership percentage | 43.70% | ||
Minimum [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Difference between equity method investment carrying value and book value, amortization period | 10 years | ||
Maximum [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Difference between equity method investment carrying value and book value, amortization period | 20 years | ||
Equity Method Investment Goodwill [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Investments in unconsolidated subsidiaries and equity securities | $ 837 | $ 793 | |
EITA [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership percentage | 49.00% | ||
STAEM [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership percentage | 25.00% | ||
Megapolis Group | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership percentage | 23.00% | ||
RBH [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity securities | $ 3,280 |
Investments in Unconsolidated_4
Investments in Unconsolidated Subsidiaries, Equity Securities and Other Related Parties (Balance Sheet and Earnings Activity) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Schedule of Equity Method Investments [Line Items] | |||||
Net revenues | $ 901 | $ 743 | $ 2,307 | $ 1,936 | |
Expenses | 14 | 6 | 41 | 16 | |
Receivables | 651 | 651 | $ 308 | ||
Payables | 16 | 16 | 8 | ||
Megapolis Group | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Net revenues | 622 | 533 | 1,537 | 1,411 | |
Receivables | 467 | 467 | 172 | ||
Other | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Net revenues | 279 | 210 | 770 | 525 | |
Expenses | 14 | $ 6 | 41 | $ 16 | |
Receivables | 184 | 184 | 136 | ||
Payables | $ 16 | $ 16 | $ 8 |
Sale of Accounts Receivable (De
Sale of Accounts Receivable (Details) - USD ($) $ in Billions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Sale of Accounts Receivable [Abstract] | |||||
Servicing liability | $ 0 | $ 0 | $ 0 | $ 0 | |
Trade receivables sold and derecognized from the Consolidated Balance Sheets | 7.8 | 8 | |||
Trade receivables sold and derecognized that remain uncollected | 0.6 | 0.6 | $ 0.6 | ||
Loss on sale of trade receivables | $ 0 | $ 0 | $ 0 | $ 0 |
Product Warranty (Narrative) (D
Product Warranty (Narrative) (Details) | 9 Months Ended |
Sep. 30, 2019 | |
Guarantees and Product Warranties [Abstract] | |
Standard product warranty term | 12 months |
Product Warranty (Movement in P
Product Warranty (Movement in Product Warranty Obligations) (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Balance at beginning of period | $ 67 | $ 71 |
Changes due to: | ||
Warranties issued | 236 | 179 |
Settlements | (153) | (183) |
Currency | 0 | 0 |
Balance at end of period | $ 150 | $ 67 |
Acquisitions (Narrative) (Detai
Acquisitions (Narrative) (Details) - Tabacalera Costarricense, S.A. And Mendiola Y Campania, S.A. Purchase Of Noncontrolling Interest [Member] $ in Millions | Mar. 21, 2018USD ($) |
Business Acquisition [Line Items] | |
Interest acquired | 49.00% |
Net purchase price | $ 95 |
Contingent consideration | $ 2 |
Ownership percentage | 100.00% |
Decrease to additional paid-in capital | $ 86 |
Leases (Details)
Leases (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2019 | Dec. 31, 2018 | |
Lessee, Lease, Description [Line Items] | |||
Other assets | $ 716 | $ 716 | |
Accrued liabilities - Other | 183 | 183 | |
Income taxes and other liabilities | 529 | 529 | |
Total lease liabilities | 712 | 712 | |
Operating lease cost | 61 | 180 | |
Short-term lease cost | 15 | 45 | |
Variable lease cost | 10 | 20 | |
Total lease cost | 86 | 245 | |
2019 | 63 | 63 | |
2020 | 191 | 191 | |
2021 | 139 | 139 | |
2022 | 105 | 105 | |
2023 | 79 | 79 | |
Thereafter | 330 | 330 | |
Total lease payments | 907 | 907 | |
Less: Interest | 195 | 195 | |
Present value of lease liabilities | $ 712 | 712 | |
2019 | $ 147 | ||
2020 | 103 | ||
2021 | 73 | ||
2022 | 52 | ||
2023 | 43 | ||
Thereafter | 354 | ||
Minimum rental commitments | $ 772 | ||
Cash paid for amounts included in the measurement of lease liabilities in Operating cash flows | 178 | ||
Leased assets obtained in exchange for new operating lease liabilities | $ 169 | ||
Weighted-average remaining lease term (years) | 10 years 1 month 6 days | 10 years 1 month 6 days | |
Weighted-average discount rate | 4.70% | 4.70% | |
Cost of Sales [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Total lease cost | $ 21 | $ 59 | |
Marketing Administration And Research Costs [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Total lease cost | $ 65 | $ 186 | |
Minimum [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Lease term | 1 year | 1 year | |
Maximum [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Lease term | 75 years | 75 years |
Asset Impairment and Exit Cos_3
Asset Impairment and Exit Costs (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||||
Asset impairment and exit costs | $ 22 | $ 0 | $ 65 | $ 0 |
Additional expected cost | 4 | 4 | ||
Severance Costs | 22 | 0 | 40 | 0 |
Asset Impairment Charges | 0 | 0 | 25 | 0 |
Movement in exit cost liabilities | ||||
Liability balance, January 1, 2019 | 0 | |||
Charges, net | 22 | 0 | 40 | 0 |
Cash spent | (13) | (21) | ||
Currency/other | (2) | |||
Liability balance, September 30, 2019 | 17 | 17 | ||
Pakistan [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Asset impairment and exit costs | 20 | |||
Colombia [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Asset impairment and exit costs | 45 | |||
South & Southeast Asia [Member] | Operating Segments [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Severance Costs | 0 | 0 | 3 | 0 |
Asset Impairment Charges | 0 | 0 | 17 | 0 |
Movement in exit cost liabilities | ||||
Charges, net | 0 | 0 | 3 | 0 |
Latin America & Canada [Member] | Operating Segments [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Severance Costs | 22 | 0 | 37 | 0 |
Asset Impairment Charges | 0 | 0 | 8 | 0 |
Movement in exit cost liabilities | ||||
Charges, net | $ 22 | $ 0 | $ 37 | $ 0 |
Deconsolidation of RBH (Details
Deconsolidation of RBH (Details) $ in Millions, $ in Millions | Mar. 01, 2019USD ($)litigation_case | Mar. 01, 2019CAD ($)litigation_case | Mar. 31, 2019USD ($) | Sep. 30, 2019USD ($)litigation_case | Mar. 22, 2019USD ($) |
Loss Contingencies [Line Items] | |||||
Number of cases decided in favor of plaintiff | litigation_case | 13 | ||||
Canada [Member] | Smoking And Health Class Actions [Member] | Appellate Ruling [Member] | Cecilia Letourneau & Conseil Quebecois Sur La Tabac Et La Sante and Jean-Yves Blais Cases [Member] | RBH [Member] | |||||
Loss Contingencies [Line Items] | |||||
Number of cases decided in favor of plaintiff | litigation_case | 2 | 2 | |||
Amount of litigation charge | $ 194 | $ 194 | |||
Amount of litigation charge net of tax | $ 142 | ||||
Amount of security ordered, funded by defendant | $ 195.7 | $ 257 | |||
Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Discount Rate [Member] | |||||
Loss Contingencies [Line Items] | |||||
Pending litigation liabilities measurement input | 0.08 | ||||
Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Terminal Growth Rate [Member] | |||||
Loss Contingencies [Line Items] | |||||
Pending litigation liabilities measurement input | 0.025 | ||||
Marketing Administration And Research Costs [Member] | |||||
Loss Contingencies [Line Items] | |||||
Deconsolidation amount | 239 | ||||
RBH [Member] | |||||
Loss Contingencies [Line Items] | |||||
Amount deconsolidated from balance sheet | $ 3,519 | ||||
Equity securities | 3,280 | ||||
Tax benefit for reversal of deferred tax liabilities | $ 49 | ||||
RBH [Member] | Cash [Member] | |||||
Loss Contingencies [Line Items] | |||||
Amount deconsolidated from balance sheet | 1,323 | ||||
RBH [Member] | Goodwill [Member] | |||||
Loss Contingencies [Line Items] | |||||
Amount deconsolidated from balance sheet | 1,463 | ||||
RBH [Member] | Other Comprehensive Earnings [Member] | |||||
Loss Contingencies [Line Items] | |||||
Amount deconsolidated from balance sheet | 529 | ||||
RBH [Member] | Other Assets and Liabilities [Member] | |||||
Loss Contingencies [Line Items] | |||||
Amount deconsolidated from balance sheet | $ 204 |
New Accounting Standards (Lease
New Accounting Standards (Leases) (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Jan. 01, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Lease assets | $ 716 | |
Total lease liabilities | $ 712 | |
Accounting Standards Update 2016-02 [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Lease assets | $ 700 | |
Total lease liabilities | $ 700 |