Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 22, 2020 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
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 | 2020 | |
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 | 1,557,315,937 | |
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 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, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
Revenues including excise taxes | $ 20,444 | $ 20,380 | $ 56,516 | $ 58,072 |
Excise taxes on products | 12,998 | 12,738 | 35,266 | 35,980 |
Net revenues | 7,446 | 7,642 | 21,250 | 22,092 |
Cost of sales | 2,416 | 2,605 | 6,997 | 7,735 |
Gross profit | 5,030 | 5,037 | 14,253 | 14,357 |
Marketing, administration and research costs (Notes 8, 18 & 19) | 1,769 | 2,234 | 5,435 | 6,282 |
Amortization of intangibles | 18 | 15 | 55 | 50 |
Operating income | 3,243 | 2,788 | 8,763 | 8,025 |
Interest expense, net | 163 | 132 | 454 | 434 |
Pension and other employee benefit costs (Note 3) | 23 | 20 | 68 | 61 |
Earnings before income taxes | 3,057 | 2,636 | 8,241 | 7,530 |
Provision for income taxes | 640 | 635 | 1,764 | 1,670 |
Equity investments and securities (income)/loss, net | (20) | (45) | 4 | (86) |
Net earnings | 2,437 | 2,046 | 6,473 | 5,946 |
Net earnings attributable to noncontrolling interests | 130 | 150 | 393 | 377 |
Net earnings attributable to PMI | $ 2,307 | $ 1,896 | $ 6,080 | $ 5,569 |
Per share data: | ||||
Basic earnings per share (in dollars per share) | $ 1.48 | $ 1.22 | $ 3.90 | $ 3.57 |
Diluted earnings per share (in dollars per share) | $ 1.48 | $ 1.22 | $ 3.90 | $ 3.57 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Earnings - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Net earnings | $ 2,437 | $ 2,046 | $ 6,473 | $ 5,946 |
Change in currency translation adjustments: | ||||
Unrealized gains (losses), net of income taxes | (588) | 12 | (1,373) | 363 |
Change in net loss and prior service cost: | ||||
Net gains (losses) and prior service costs, net of income taxes | 0 | (2) | 0 | 133 |
Amortization of net losses, prior service costs and net transition costs and (Gains)/losses transferred to earnings – deconsolidation of RBH, net of income taxes | 74 | 61 | 223 | 180 |
Change in fair value of derivatives accounted for as hedges: | ||||
Gains (losses) recognized, net of income taxes | (31) | (14) | (37) | (34) |
(Gains) losses transferred to earnings, net of income taxes | (2) | 13 | (17) | (12) |
Total other comprehensive earnings (losses) | (547) | 70 | (1,204) | 1,159 |
Total comprehensive earnings | 1,890 | 2,116 | 5,269 | 7,105 |
Less comprehensive earnings attributable to: | ||||
Noncontrolling interests | 141 | 135 | 393 | 391 |
Comprehensive earnings attributable to PMI | $ 1,749 | $ 1,981 | 4,876 | 6,714 |
Deconsolidation of RBH [Member] | ||||
Change in currency translation adjustments: | ||||
(Gains)/losses transferred to earnings - deconsolidation of RBH, net of income taxes (Note 19) | 0 | 502 | ||
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 | $ 0 | $ 27 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Earnings (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income taxes on currency translation adjustments | $ 78 | $ (163) | $ 38 | $ (230) |
Income taxes on gains (losses) and prior service costs | 0 | (2) | 0 | 133 |
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) | (13) | (49) | (43) |
Income taxes on gain (losses) recognized on derivatives accounted for as hedges | 7 | 2 | 8 | 5 |
Income taxes on gain (losses) transferred to earnings on derivatives accounted for as hedges | $ (1) | $ 0 | 1 | 3 |
Deconsolidation of RBH [Member] | ||||
Income taxes on currency translation adjustments | 0 | 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 | $ 0 | $ (15) |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
ASSETS | ||
Cash and cash equivalents | $ 4,821 | $ 6,861 |
Trade receivables (less allowances of $21 in 2020 and $20 in 2019) | 3,080 | 3,080 |
Other receivables | 632 | 637 |
Inventories: | ||
Leaf tobacco | 1,996 | 2,052 |
Other raw materials | 1,757 | 1,596 |
Finished product | 4,407 | 5,587 |
Total inventory, net | 8,160 | 9,235 |
Other current assets | 760 | 701 |
Total current assets | 17,453 | 20,514 |
Property, plant and equipment, at cost | 14,293 | 14,446 |
Less: accumulated depreciation | 8,159 | 7,815 |
Total property, plant and equipment, net | 6,134 | 6,631 |
Goodwill (Note 4) | 5,647 | 5,858 |
Other intangible assets, net (Note 4) | 1,926 | 2,113 |
Investments in unconsolidated subsidiaries and equity securities (Notes 11&14) | 4,579 | 4,635 |
Deferred income taxes | 1,225 | 1,153 |
Other assets | 2,165 | 1,971 |
TOTAL ASSETS | 39,129 | 42,875 |
LIABILITIES | ||
Short-term borrowings (Note 10) | 152 | 338 |
Current portion of long-term debt (Note 10) | 1,992 | 4,051 |
Accounts payable | 2,155 | 2,299 |
Accrued liabilities: | ||
Marketing and selling | 752 | 666 |
Taxes, except income taxes | 4,870 | 5,837 |
Employment costs | 981 | 1,042 |
Dividends payable | 1,879 | 1,831 |
Other | 1,897 | 1,973 |
Income taxes | 847 | 796 |
Total current liabilities | 15,525 | 18,833 |
Long-term debt (Note 10) | 27,346 | 26,656 |
Deferred income taxes | 661 | 908 |
Employment costs | 3,589 | 3,634 |
Income taxes and other liabilities | 2,253 | 2,443 |
Total liabilities | 49,374 | 52,474 |
Contingencies (Note 8) | ||
STOCKHOLDERS’ (DEFICIT) EQUITY | ||
Common stock, no par value (2,109,316,331 shares issued in 2020 and 2019) | 0 | 0 |
Additional paid-in capital | 2,071 | 2,019 |
Earnings reinvested in the business | 31,537 | 30,987 |
Accumulated other comprehensive losses | (10,567) | (9,363) |
Total stockholders' equity before treasury stock | 23,041 | 23,643 |
Less: cost of repurchased stock (552,016,777 and 553,421,668 shares in 2020 and 2019, respectively) | 35,133 | 35,220 |
Total PMI stockholders’ deficit | (12,092) | (11,577) |
Noncontrolling interests | 1,847 | 1,978 |
Total stockholders’ deficit | (10,245) | (9,599) |
TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY | $ 39,129 | $ 42,875 |
Repurchased stock, shares (in shares) | 552,016,777 | 553,421,668 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Receivables, allowances | $ 21 | $ 20 |
Common stock, shares issued (in shares) | 2,109,316,331 | 2,109,316,331 |
Repurchased stock, shares (in shares) | 552,016,777 | 553,421,668 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | |||
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | ||||
Net earnings | $ 6,473 | $ 5,946 | ||
Adjustments to reconcile net earnings to operating cash flows: | ||||
Depreciation and amortization | 709 | 709 | ||
Deferred income tax (benefit) provision | (187) | (124) | ||
Asset impairment and exit costs, net of cash paid (Note 18) | (44) | 42 | ||
Cash effects of changes in: | ||||
Receivables, net | (141) | (506) | ||
Inventories | 823 | (64) | ||
Accounts payable | (22) | (31) | ||
Accrued liabilities and other current assets | (1,026) | 292 | ||
Income taxes | (181) | (6) | ||
Pension plan contributions | (62) | (89) | ||
Other | 308 | 597 | [1] | |
Net cash provided by operating activities | 6,650 | 6,766 | ||
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | ||||
Capital expenditures | (462) | (696) | ||
Investments in unconsolidated subsidiaries and equity securities | (3) | (31) | ||
Deconsolidation of RBH (Note 19) | 0 | (1,346) | [2] | |
Net investment hedges | (138) | 429 | ||
Other | 35 | 17 | ||
Net cash used in investing activities | (568) | (1,627) | ||
Short-term borrowing activity by original maturity: | ||||
Net issuances (repayments) - maturities of 90 days or less | (159) | (340) | ||
Issuances - maturities longer than 90 days | 45 | 989 | ||
Repayments - maturities longer than 90 days | (45) | (989) | ||
Long-term debt proceeds | 2,230 | 3,819 | ||
Long-term debt repaid | (3,999) | (2,971) | ||
Dividends paid | (5,485) | (5,336) | ||
Sale (purchase) of subsidiary shares to/(from) noncontrolling interests | 3 | 47 | ||
Other | (621) | (321) | ||
Net cash used in financing activities | (8,031) | (5,102) | ||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (89) | (146) | ||
Cash, cash equivalents and restricted cash: | ||||
Increase (Decrease) | [3] | (2,038) | (109) | |
Balance at beginning of period | [3] | 6,865 | 6,620 | |
Balance at end of period | [3] | $ 4,827 | $ 6,511 | |
[1] | Includes the Loss on Deconsolidation of RBH ($239 million) and the Canadian tobacco litigation-related charge ($194 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. 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 $6 million and $4 million as of September 30, 2020 and 2019, respectively, and $4 million and $27 million as of December 31, 2019, and 2018, respectively, which were included in other current assets in the condensed consolidated balance sheets. |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | ||
Asset impairment and exit costs | $ 0 | $ 22 | $ 65 | ||||
Cash divested from deconsolidation | $ 0 | 1,346 | [1] | ||||
Restricted cash | $ 6 | $ 4 | $ 6 | 4 | $ 4 | $ 27 | |
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 | ||||||
Marketing Administration And Research Costs [Member] | |||||||
Deconsolidation amount | $ 239 | ||||||
[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, 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 | 630 | 616 | 14 | ||||
Other comprehensive earnings (losses), net of income taxes | 1,159 | ||||||
Issuance of stock awards | 123 | 44 | 79 | ||||
Dividends declared | (5,386) | (5,386) | |||||
Payments to noncontrolling interests | (305) | (305) | |||||
Deconsolidation of RBH (Note 19) | 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) | ||||
Other comprehensive earnings (losses), net of income taxes | 70 | ||||||
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 |
Beginning balance at Dec. 31, 2019 | (9,599) | 0 | 2,019 | 30,987 | (9,363) | (35,220) | 1,978 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | 6,473 | 6,080 | 393 | ||||
Other comprehensive earnings (losses), net of income taxes | (1,204) | (1,204) | |||||
Issuance of stock awards | 122 | 35 | 87 | ||||
Dividends declared | (5,530) | (5,530) | |||||
Payments to noncontrolling interests | (510) | (510) | |||||
Other | 3 | 17 | (14) | ||||
Ending balance at Sep. 30, 2020 | (10,245) | 0 | 2,071 | 31,537 | (10,567) | (35,133) | 1,847 |
Beginning balance at Jun. 30, 2020 | (10,120) | 0 | 2,044 | 31,103 | (10,009) | (35,135) | 1,877 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | 2,437 | 2,307 | 130 | ||||
Other comprehensive earnings (losses), net of income taxes | (547) | (558) | 11 | ||||
Issuance of stock awards | 28 | 26 | 2 | ||||
Dividends declared | (1,873) | (1,873) | |||||
Payments to noncontrolling interests | (171) | (171) | |||||
Other | 1 | 1 | |||||
Ending balance at Sep. 30, 2020 | $ (10,245) | $ 0 | $ 2,071 | $ 31,537 | $ (10,567) | $ (35,133) | $ 1,847 |
Condensed Consolidated Statem_7
Condensed Consolidated Statements of Stockholders' (Deficit) Equity (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||||
Dividends declared (in dollars per share) | $ 1.20 | $ 1.17 | $ 3.54 | $ 3.45 |
Background and Basis of Present
Background and Basis of Presentation | 9 Months Ended |
Sep. 30, 2020 | |
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 U.S. Food and Drug Administration ("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. PMI has analyzed the impact of the Coronavirus pandemic ("COVID-19") on its financial statements as of September 30, 2020. PMI has determined that the changes to its significant judgments and estimates did not have a material impact with respect to goodwill, intangible assets, long-lived assets or its hedge accounting activities. 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 19. 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, 2019. |
Stock Plans
Stock Plans | 9 Months Ended |
Sep. 30, 2020 | |
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, 2020, shares available for grant under the 2017 Plan were 17,277,020. 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, 2020, shares available for grant under the plan were 934,372. Restricted share unit (RSU) awards During the nine months ended September 30, 2020 and 2019, shares granted to eligible employees and the weighted-average grant date fair value per share related to RSU awards were as follows: Number of Weighted-Average Grant Date Fair Value Per RSU Award Granted 2020 1,712,750 $ 85.81 2019 1,717,230 $ 77.25 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, 2020 $ 98 $ 30 2019 $ 91 $ 27 As of September 30, 2020, PMI had $164 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, 2020, 1,128,308 RSU awards vested. The grant date fair value of all the vested awards was approximately $110 million. The total fair value of RSU awards that vested during the nine months ended September 30, 2020 was approximately $97 million. Performance share unit (PSU) awards During the nine months ended September 30, 2020 and 2019, 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. The performance metrics for such PSU's granted during the nine months ended September 30, 2020 consisted of PMI's Total Shareholder Return ("TSR") relative to a predetermined peer group and on an absolute basis (40% weight), PMI’s currency-neutral compound annual adjusted diluted earnings per share growth rate (30% weight), and PMI’s performance against specific measures of PMI’s transformation, defined as net revenues from PMI's RRPs and any other non-combustible products as a percentage of PMI's total net revenues in the last year of the performance cycle (30% weight). The performance metrics for such PSUs granted during the nine months ended September 30, 2019 consisted of PMI’s 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 in each such PSU award 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, 2020 and 2019, 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 2020 671,220 $ 86.04 $ 80.36 2019 647,700 $ 77.23 $ 83.59 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: 2020 2019 Risk-free interest rate (a) 1.4 % 2.4 % Expected volatility (b) 23.5 % 21.4 % (a) Based on the U.S. Treasury yield curve. (b) Determined using the observed historical 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, 2020 $ 30 ($ 2) 2019 $ 43 $ 10 As of September 30, 2020, PMI had $47 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, 2020, 343,806 PSU awards vested. The grant date fair value of all the vested awards was approximately $35 million. The total fair value of PSU awards that vested during the nine months ended September 30, 2020 was approximately $30 million. |
Benefit Plans
Benefit Plans | 9 Months Ended |
Sep. 30, 2020 | |
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) 2020 2019 2020 2019 Net pension costs (income) $ (13) $ (16) $ (5) $ (6) Net postemployment costs 75 72 26 25 Net postretirement costs 6 5 2 1 Total pension and other employee benefit costs $ 68 $ 61 $ 23 $ 20 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) 2020 2019 2020 2019 Service cost $ 198 $ 161 $ 68 $ 54 Interest cost 54 89 19 29 Expected return on plan assets (265) (247) (92) (82) Amortization: Net loss 197 142 68 47 Prior service cost 1 — — — Net periodic pension cost $ 185 $ 145 $ 63 $ 48 (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 $62 million were made to the pension plans during the nine months ended September 30, 2020. Currently, PMI anticipates making additional contributions during the remainder of 2020 of approximately $49 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, 2020 | |
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, 2019 $ 1,338 $ 300 $ 89 $ 2,898 $ 551 $ 682 $ 5,858 Changes due to: Currency 18 3 (15) (116) (13) (88) (211) Balances, September 30, 2020 $ 1,356 $ 303 $ 74 $ 2,782 $ 538 $ 594 $ 5,647 At September 30, 2020, goodwill primarily reflects PMI’s acquisitions in Colombia, Greece, Indonesia, Mexico, Pakistan and Serbia, as well as the business combination in the Philippines. Details of other intangible assets were as follows: September 30, 2020 December 31, 2019 (in millions) Weighted-Average Remaining Useful Life Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Non-amortizable intangible assets $ 1,199 $ 1,199 $ 1,319 $ 1,319 Amortizable intangible assets: Trademarks 13 years 1,197 $ 562 635 1,217 $ 526 691 Distribution networks 8 years 109 73 36 113 72 41 Other* 8 years 104 48 56 106 44 62 Total other intangible assets $ 2,609 $ 683 $ 1,926 $ 2,755 $ 642 $ 2,113 * Primarily includes intellectual property rights Non-amortizable intangible assets substantially consist of trademarks from PMI’s acquisitions in Indonesia and Mexico. The decrease since December 31, 2019 was due to currency movements of ($120 million). The decrease in the gross carrying amount of amortizable intangible assets from December 31, 2019, was mainly due to currency movements of ($27 million). The change in the accumulated amortization from December 31, 2019, was mainly due to the 2020 amortization of $55 million, partially offset by currency movements of ($14 million). Amortization expense for each of the next five years is estimated to be $73 million or less, assuming no additional transactions occur that require the amortization of intangible assets. |
Financial Instruments
Financial Instruments | 9 Months Ended |
Sep. 30, 2020 | |
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, Indonesian rupiah, Japanese yen, Mexican peso, Philippine peso, Russian ruble and Swiss franc. At September 30, 2020, PMI had contracts with aggregate notional amounts of $24.1 billion of which $5.8 billion related to cash flow hedges, $8.3 billion related to hedges of net investments in foreign operations and $10.0 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, 2020 and December 31, 2019, were as follows: Derivative Assets Derivative Liabilities Fair Value Fair Value At At At At (in millions) Balance Sheet Classification September 30, 2020 December 31, 2019 Balance Sheet Classification September 30, 2020 December 31, 2019 Derivative contracts designated as hedging instruments Other current assets $ 164 $ 319 Other accrued liabilities $ 89 $ 23 Other assets 35 21 Income taxes and other liabilities 351 301 Derivative contracts not designated as hedging instruments Other current assets 55 50 Other accrued liabilities 90 70 Other assets — — Income taxes and other liabilities 35 25 Total derivatives $ 254 $ 390 $ 565 $ 419 For the nine months and three months ended September 30, 2020 and 2019, PMI's cash flow and net investment hedging instruments impacted the condensed consolidated statements of earnings and comprehensive earnings as follows: (pre-tax, in millions) For the Nine Months Ended September 30, Amount of Gain/(Loss) Recognized in Other Comprehensive Earnings/(Losses) on Derivatives Statement of Earnings Amount of Gain/(Loss) Reclassified from Other Comprehensive Earnings/(Losses) into Earnings 2020 2019 2020 2019 Derivatives in Cash Flow Hedging Relationship Derivative contracts $ (45) $ (39) Net revenues $ 4 $ 22 Cost of sales 7 — Marketing, administration and research costs 15 (3) Interest expense, net (8) (4) Derivatives in Net Investment Hedging Relationship Derivative contracts (52) 564 Total $ (97) $ 525 $ 18 $ 15 (pre-tax, in millions) For the Three Months Ended September 30, Amount of Gain/(Loss) Recognized in Other Comprehensive Earnings/(Losses) on Derivatives Statement of Earnings Amount of Gain/(Loss) Reclassified from Other Comprehensive Earnings/(Losses) into Earnings 2020 2019 2020 2019 Derivatives in Cash Flow Hedging Relationship Derivative contracts $ (38) $ (16) Net revenues $ — $ (7) Cost of sales — — Marketing, administration and research costs 4 (4) Interest expense, net (3) (2) Derivatives in Net Investment Hedging Relationship Derivative contracts (321) 419 Total $ (359) $ 403 $ 1 $ (13) 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 are deferred as components of accumulated other comprehensive losses until the underlying hedged transactions are reported in PMI’s condensed consolidated statements of earnings. As of September 30, 2020, PMI has hedged forecasted transactions for periods not exceeding the next twenty-one 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, 2020 and 2019, these hedges of net investments resulted in gains (losses), net of income taxes, of $(276) million and $771 million, respectively, principally related to changes in the exchange and interest rates between the Euro and U.S. dollar. For the three months ended September 30, 2020 and 2019, these hedges of net investments resulted in gains (losses), net of income taxes, of $(402) million and $598 million, respectively, principally related to changes in the exchange and interest 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. Gains (losses) attributable to changes in foreign currency exchange rates substantially offset the losses and gains generated on the underlying assets. For the nine months ended September 30, 2020 and 2019, the gains for amounts excluded from the effectiveness testing recognized in earnings were $150 million and $171 million, respectively. For the three months ended September 30, 2020 and 2019, the gains for amounts excluded from the effectiveness testing recognized in earnings were $46 million and $54 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, 2020 and 2019, the gains (losses) from contracts for which PMI did not apply hedge accounting were $(105) million and $25 million, respectively. For the three months ended September 30, 2020 and 2019, the gains (losses) from contracts for which PMI did not apply hedge accounting were $(79) million and $86 million, respectively. The gains (losses) from these contracts attributable to changes in foreign currency exchange rates 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, 2020 and 2019, these items impacted the condensed consolidated statement of earnings as follows: (pre-tax, in millions) Derivatives not Designated Statement of Earnings Amount of Gain/(Loss) For the Nine Months Ended September 30, For the Three Months Ended September 30, 2020 2019 2020 2019 Derivative contracts Interest expense, net $ 59 $ 79 $ 11 $ 31 Total $ 59 $ 79 $ 11 $ 31 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, 2020 2019 2020 2019 Gain/(loss) at beginning of period, $ 3 $ 35 $ (18) $ (10) Derivative (gains)/losses transferred to earnings (17) (12) (2) 13 Change in fair value (37) (34) (31) (14) Gain/(loss) as of September 30, $ (51) $ (11) $ (51) $ (11) At September 30, 2020, PMI expects $12 million of derivative losses that are included in accumulated other comprehensive losses to be reclassified to the condensed consolidated statement of earnings within the next 12 months. These losses 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, 2020 | |
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, 2020 2019 2020 2019 Net earnings attributable to PMI $ 6,080 $ 5,569 $ 2,307 $ 1,896 Less distributed and undistributed earnings attributable to share-based payment awards 15 13 5 5 Net earnings for basic and diluted EPS $ 6,065 $ 5,556 $ 2,302 $ 1,891 Weighted-average shares for basic EPS 1,557 1,556 1,558 1,556 Plus contingently issuable performance stock units (PSUs) — — — — Weighted-average shares for diluted EPS 1,557 1,556 1,558 1,556 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 2020 and 2019 computations, there were no antidilutive stock awards. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2020 | |
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. Operating 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 operating 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 Platform 1 devices, 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 operating 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, 2020 2019 2020 2019 Net revenues: European Union $ 7,960 $ 7,381 $ 2,950 $ 2,645 Eastern Europe 2,470 2,300 899 899 Middle East & Africa 2,348 3,058 768 1,127 South & Southeast Asia 3,211 3,607 1,071 1,246 East Asia & Australia 4,045 4,094 1,358 1,252 Latin America & Canada (1) 1,216 1,652 400 473 Net revenues $ 21,250 $ 22,092 $ 7,446 $ 7,642 Operating income (loss): European Union $ 3,924 $ 3,346 $ 1,588 $ 1,255 Eastern Europe 610 284 245 (101) Middle East & Africa 819 1,304 261 519 South & Southeast Asia 1,290 1,471 402 539 East Asia & Australia 1,792 1,520 637 451 Latin America & Canada (1) 328 100 110 125 Operating income $ 8,763 $ 8,025 $ 3,243 $ 2,788 (1) 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 19. Deconsolidation of RBH . 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. • Canadian tobacco litigation-related expense - See Note 8. Contingencies and Note 19. 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 19. 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. • Asset impairment and exit costs - See Note 18. Asset Impairment and Exit Costs for a breakdown of these costs by segment for the nine months and three months ended September 30, 2020 and 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, 2020 2019 2020 2019 Net revenues: Combustible products: European Union $ 6,099 $ 6,139 $ 2,244 $ 2,178 Eastern Europe 1,681 1,774 636 664 Middle East & Africa 2,296 2,810 768 1,064 South & Southeast Asia 3,211 3,607 1,071 1,246 East Asia & Australia 1,876 2,074 605 680 Latin America & Canada 1,196 1,634 393 466 Total combustible products $ 16,360 $ 18,039 $ 5,716 $ 6,298 Reduced-risk products: European Union $ 1,861 $ 1,242 $ 706 $ 467 Eastern Europe 789 526 263 235 Middle East & Africa 52 248 — 63 South & Southeast Asia — — — — East Asia & Australia 2,169 2,020 753 572 Latin America & Canada 20 18 7 7 Total reduced-risk products $ 4,890 $ 4,053 $ 1,730 $ 1,344 Total PMI net revenues $ 21,250 $ 22,092 $ 7,446 $ 7,642 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, 2020 | |
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, 2019 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 19. 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 31, 2021 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 in a confidential mediation, 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 $2.4 billion)). In addition, the trial court awarded CAD 90,000 (approximately $68,440) in punitive damages, allocating CAD 30,000 (approximately $22,810) 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 $171.9 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 $576 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 $2.05 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 $836 million), into trust accounts within 60 days. RBH’s share of the deposit is approximately CAD 257 million (approximately $194 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 $99.6 million) in punitive damages, allocating CAD 46 million (approximately $35 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 19. 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 23, 2020, October 22, 2019 and October 23, 2018:¹ Type of Case Number of Cases Pending as of October 23, 2020 Number of Cases Pending as of October 22, 2019 Number of Cases Pending as of October 23, 2018 Individual Smoking and Health Cases 43 49 63 Smoking and Health Class Actions 9 10 10 Health Care Cost Recovery Actions 17 17 16 Label-Related Class Actions — — 1 Individual Label-Related Cases 5 5 1 Public Civil Actions 2 2 2 Since 1995, when the first tobacco-related litigation was filed against a PMI entity, 509 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. Ten of these cases have subsequently reached final resolution in our favor and three remain on appeal. The table below lists the verdict and significant post-trial developments in the three pending cases where a verdict was returned in favor of the plaintiff: ______ 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 $2.4 billion)). The trial court awarded CAD 90,000 (approximately $68,440) in punitive damages, allocating CAD 30,000 (approximately $22,810) to our subsidiary. The trial court ordered defendants to pay CAD 1 billion (approximately $760 million) of the compensatory damage award, CAD 200 million (approximately $152.1 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 $99.6 million) in punitive damages, allocating CAD 46 million (approximately $35 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 $1,414), 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 23, 2020, there were a number of smoking and health cases pending against us, our subsidiaries or indemnitees, as follows: • 43 cases brought by individual plaintiffs in Argentina (31), Brazil (3), Canada (2), Chile (3), Italy (1), the Philippines (1), Turkey (1) and Scotland (1), compared with 49 such cases on October 22, 2019, and 63 cases on October 23, 2018; and • 9 cases brought on behalf of classes of individual plaintiffs in Canada, compared with 10 such cases on October 22, 2019 and 10 such cases on October 23, 2018. The class actions pending in Canada are described above under the caption “ Smoking and Health Litigation — Canada. ” In a class action 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, sought 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 $179) 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 Court of Justice denied plaintiff's appeal. Plaintiff filed a further appeal. In August 2020, the Superior Court of Justice confirmed the denial of plaintiff's appeal finally dismissing the plaintiff's claim. Health Care Cost Recovery Litigation: These cases, brought by governmental and non-governmental plaintiffs, seek reimbursement of health care cost expenditures allegedly caused by tobacco products. Plaintiffs' allegations of liability in these cases are based on various theories of recovery including unjust enrichment, negligence, negligent design, strict liability, breach of express and implied warranties, violation of a voluntary undertaking or special duty, fraud, negligent misrepresentation, conspiracy, public nuisance, defective product, failure to warn, sale of cigarettes to minors, and claims under statutes governing competition and deceptive trade practices. 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 lack of proximate cause, remoteness of injury, failure to state a claim, adequate remedy at law, “unclean hands” (namely, that plaintiffs cannot o |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2020 | |
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. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law in the U.S. to provide certain relief as a result of the COVID-19 pandemic. In addition, governments around the world have enacted or implemented various forms of tax relief measures in response to the economic conditions in the wake of COVID-19. As of September 30, 2020, PMI has determined that neither the CARES Act nor changes to income tax laws or regulations in other jurisdictions had a significant impact on PMI’s effective tax rate, with the exception of the corporate income tax rate reduction in Indonesia. On July 20, 2020, the U.S. Department of the Treasury and the Internal Revenue Service released final and proposed regulations under the Global Intangible Low-Taxed Income (“GILTI”) and other provisions of the Internal Revenue Code. PMI has analyzed these elective regulations and recorded the impact in its condensed consolidated financial statements, as described below. PMI’s effective tax rates for the nine months and three months ended September 30, 2020 were 21.4% and 20.9%, respectively. PMI’s effective tax rates for the nine months and three months ended September 30, 2019 were 22.2% and 24.1%, respectively. The effective tax rate for the nine months ended September 30, 2020 was favorably impacted by a reduction of estimated U.S. federal and state income tax liabilities for years 2018 and 2019 mostly due to the GILTI regulations mentioned above ($93 million), a decrease in deferred tax liabilities related to the fair value adjustment of equity securities held by PMI (for further details, see Note 11. Fair Value Measurements ) and a decrease in deferred tax liabilities related to the corporate income tax rate reduction in Indonesia, partially offset by a decrease in deductions related to foreign-derived intangible income for the years 2018 and 2019. The effective tax rate for the nine months ended September 30, 2019 was favorably impacted by the reversal of a deferred tax liability on the unremitted earnings of PMI's Canadian subsidiary, RBH ($49 million), a reduction of estimated U.S. federal income tax on dividend repatriation for the years 2015-2018 ($67 million) and by the Tax Cuts and Jobs Act. PMI estimates that its full-year 2020 effective tax rate will be 22% to 23%, excluding the discrete tax events mentioned above. 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 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, 2020 | |
Debt Disclosure [Abstract] | |
Indebtedness | Indebtedness: Short-term Borrowings: PMI's short-term borrowings, consisting of bank loans to certain PMI subsidiaries at September 30, 2020 and December 31, 2019, had a carrying value of $152 million and $338 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, 2020 and December 31, 2019, PMI’s long-term debt consisted of the following: (in millions) September 30, 2020 December 31, 2019 U.S. dollar notes, 1.125% to 6.375% (average interest rate 3.342%), due through 2044 $ 19,732 $ 19,783 Foreign currency obligations: Euro notes, 0.125% to 3.125% (average interest rate 1.983%), due through 2039 8,811 9,822 Swiss franc notes, 1.625% to 2.000% (average interest rate 1.830%), due through 2024 597 899 Other (average interest rate 3.019%), due through 2025 198 203 29,338 30,707 Less current portion of long-term debt 1,992 4,051 $ 27,346 $ 26,656 Other foreign currency debt above includes mortgage debt in Switzerland and finance lease obligations at September 30, 2020 and December 31, 2019. PMI's debt issuances in the first nine months of 2020 were as follows: (in millions) Type Face Value Interest Rate Issuance Maturity U.S. dollar notes (a) $750 1.125% May 2020 May 2023 U.S. dollar notes (a) $750 1.500% May 2020 May 2025 U.S. dollar notes (a) $750 2.100% May 2020 May 2030 (a) Interest on these notes is payable semi-annually in arrears beginning in November 2020. Credit Facilities: On January 31, 2020, PMI entered into an agreement to amend and extend the term of its $2.0 billion 364-day revolving credit facility from February 4, 2020, to February 2, 2021. On February 10, 2020, PMI entered into a new $2.0 billion multi-year revolving credit facility, expiring on February 10, 2025. The new credit facility replaced the $2.5 billion multi-year revolving credit facility, which was terminated effective February 10, 2020. PMI had no borrowings outstanding under the terminated facility, which was due to expire on February 28, 2021. At September 30, 2020, PMI's total committed credit facilities were as follows: (in billions) Type Committed 364-day revolving credit, expiring February 2, 2021 $ 2.0 Multi-year revolving credit, expiring October 1, 2022 3.5 Multi-year revolving credit, expiring February 10, 2025 2.0 Total facilities $ 7.5 At September 30, 2020, 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, 2020 | |
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, foreign currency swaps and interest rate 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 $45 million of finance leases, was $29,293 million at September 30, 2020. 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, 2020, were as follows: (in millions) Fair Value at September 30, 2020 Quoted Prices Significant Significant Assets: Equity securities (1) $ 244 $ 244 $ — $ — Derivative contracts 254 — 254 — Total assets $ 498 $ 244 $ 254 $ — Liabilities: Debt $ 32,934 $ 32,763 $ 171 $ — Derivative contracts 565 — 565 — Total liabilities $ 33,499 $ 32,763 $ 736 $ — (1) Unrealized pre-tax loss of $78 million ($62 million net of tax) on equity securities was recorded in the condensed consolidated statements of earnings for the nine months ended September 30, 2020. During the three months ended September 30, 2020, PMI did not record any unrealized gains or losses on equity securities in the condensed consolidated statements of earnings. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Losses | 9 Months Ended |
Sep. 30, 2020 | |
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: At At At (in millions) September 30, 2020 December 31, 2019 September 30, 2019 Currency translation adjustments $ (6,910) $ (5,537) $ (5,649) Pension and other benefits (3,606) (3,829) (3,306) Derivatives accounted for as hedges (51) 3 (11) Total accumulated other comprehensive losses $ (10,567) $ (9,363) $ (8,966) 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, 2020 and 2019. 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 19. Deconsolidation of RBH for disclosures related to the deconsolidation of RBH. |
Balance Sheet Offsetting
Balance Sheet Offsetting | 9 Months Ended |
Sep. 30, 2020 | |
Offsetting [Abstract] | |
Balance Sheet Offsetting | Balance Sheet Offsetting: Derivative Financial Instruments PMI uses foreign exchange contracts and interest rate contracts to mitigate its exposure to changes in exchange and interest rates from third-party and intercompany actual and forecasted transactions. Substantially all of PMI's derivative financial instruments are subject to master netting arrangements, whereby the right to offset occurs in the event of default by a participating party. While these contracts contain the enforceable right to offset through close-out netting rights, PMI elects to present them on a gross basis in the condensed consolidated balance sheets. Collateral associated with these arrangements is in the form of cash and is unrestricted. See Note 5. Financial Instruments for disclosures related to PMI's derivative financial instruments. The effects of these derivative financial instrument assets and liabilities on PMI's condensed consolidated balance sheets were as follows: (in millions) Gross Amounts Recognized Gross Amount Offset in the Condensed Consolidated Balance Sheet Net Amounts Presented in the Condensed Consolidated Balance Sheet Gross Amounts Not Offset in the Financial Instruments Cash Collateral Received/Pledged Net Amount At September 30, 2020 Assets Derivative contracts $ 254 $ — $ 254 $ (185) $ (54) $ 15 Liabilities Derivative contracts $ 565 $ — $ 565 $ (185) $ (368) $ 12 At December 31, 2019 Assets Derivative contracts $ 390 $ — $ 390 $ (297) $ (91) $ 2 Liabilities Derivative contracts $ 419 $ — $ 419 $ (297) $ (59) $ 63 |
Related Parties - Investments i
Related Parties - Investments in Unconsolidated Subsidiaries, Equity Securities and Other | 9 Months Ended |
Sep. 30, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Related Parties - Investments in Unconsolidated Subsidiaries, Equity Securities and Other | Related Parties - Investments in Unconsolidated Subsidiaries, Equity Securities and Other: Investments in unconsolidated subsidiaries: At September 30, 2020 and December 31, 2019, PMI had total investments in unconsolidated subsidiaries of $918 million and $1,053 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, 2020 and December 31, 2019 exceeded our share of the unconsolidated subsidiaries' book value by $762 million and $901 million, respectively. The difference between the investment carrying value and the amount of underlying equity in net assets, excluding $733 million and $863 million attributable to goodwill as of September 30, 2020 and December 31, 2019, respectively, is being amortized on a straight-line basis over the underlying assets' estimated useful lives of 10 to 20 years. At September 30, 2020 and December 31, 2019, PMI received year-to-date dividends from unconsolidated subsidiaries of $53 million and $100 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"), 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 on March 22, 2019, PMI recorded the continuing investment in RBH, PMI's wholly owned subsidiary in Canada, 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 19. 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. Godfrey Phillips India Ltd ("GPI") is one of the non-controlling interest holders in IPM India, which is a 56.3% owned PMI consolidated subsidiary in the South & Southeast Asia segment. GPI also acts as contract manufacturer and distributor for IPM India. Amounts in the tables below include transactions between these related parties. Financial activity with the above related parties: PMI’s net revenues and expenses with the above related parties were as follows: For the Nine Months Ended September 30, For the Three Months Ended September 30, (in millions) 2020 2019 2020 2019 Net revenues: Megapolis Group $ 1,609 $ 1,537 $ 583 $ 622 Other 813 770 290 279 Net revenues (a) $ 2,422 $ 2,307 $ 873 $ 901 Expenses: Other $ 38 $ 41 $ 11 $ 14 Expenses $ 38 $ 41 $ 11 $ 14 (a) Net revenues exclude excise taxes and VAT billed to customers. PMI’s balance sheet activity with the above related parties was as follows: (in millions) At September 30, 2020 At December 31, 2019 Receivables: Megapolis Group $ 534 $ 375 Other 239 148 Receivables $ 773 $ 523 Payables: Other $ 19 $ 20 Payables $ 19 $ 20 |
Sale of Accounts Receivable
Sale of Accounts Receivable | 9 Months Ended |
Sep. 30, 2020 | |
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, 2020 and September 30, 2019. 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, 2020 and 2019, were $8.4 billion and $7.8 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, 2020 and September 30, 2019, 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, 2020 and 2019, the loss on sale of trade receivables was immaterial. |
Product Warranty
Product Warranty | 9 Months Ended |
Sep. 30, 2020 | |
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 device version mix, product failure rates, logistics and service delivery costs, and warranty policies. PMI accounts for its product warranties within other accrued liabilities. At September 30, 2020 and December 31, 2019, these amounts were as follows: (in millions) At September 30, 2020 At December 31, 2019 Balance at beginning of period $ 140 $ 67 Changes due to: Warranties issued 204 303 Settlements (189) (230) Currency 4 — Balance at end of period $ 159 $ 140 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Leases | Leases: The components of PMI’s lease cost were as follows for the nine months and three months ended September 30, 2020 and 2019: For the Nine Months Ended September 30, For the Three Months Ended September 30, (in millions) 2020 2019 2020 2019 Operating lease cost $ 177 $ 180 $ 60 $ 61 Short-term lease cost 37 45 12 15 Variable lease cost 23 20 8 10 Total lease cost $ 237 $ 245 $ 80 $ 86 |
Asset Impairment and Exit Costs
Asset Impairment and Exit Costs | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Asset Impairment and Exit Costs | Asset Impairment and Exit Costs: Organizational Design Optimization As part of PMI’s transformation to a smoke-free future, PMI seeks to optimize its organizational design, which includes the elimination, relocation and outsourcing of certain operations center and centralized activities. In January 2020, PMI commenced the first phase of a multi-phase restructuring project in Switzerland. PMI initiated the employee consultation procedure, as required under Swiss law, for the impacted employees in the first phase. This consultation was completed in April 2020; however, in light of the COVID-19 pandemic, PMI management temporarily suspended its restructuring plans. Additionally, in February 2020, PMI launched a voluntary separation program in Switzerland for certain eligible employees. In June 2020, PMI resumed its restructuring activities in Switzerland and additionally, announced the outsourcing of certain activities in New York, U.S.A. These activities are expected to impact approximately 240 positions that will be either eliminated, relocated or outsourced. For the nine months ended September 30, 2020, PMI recorded pre-tax asset impairment and exit costs of $71 million. During the three months ended September 30, 2020, PMI did not record any pre-tax asset impairment and exit costs. In August 2020, PMI commenced the second phase of a multi-phase restructuring project in Switzerland. This second phase is expected to impact approximately 200 existing positions that will be either eliminated or relocated. PMI initiated the employee consultation procedure, as required under Swiss law, for the impacted employees in the second phase. The third phase is expected to commence in the beginning of 2021. Until the consultation process for the respective phase is concluded, such phase is not considered probable (under U.S. GAAP), and the total potential costs cannot be determined. As a result, no related costs were recorded for the nine months ended September 30, 2020 related to the second and third phases of the restructuring project. Additionally, the amounts related to the pension accounting impacts of the restructuring, which could be significant, have not been reflected in the third quarter of 2020 as the thresholds for accounting for any related pension curtailment or settlement were not exceeded by September 30, 2020. 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. During 2019, PMI recorded asset impairment and exit costs related to plant closures in Argentina, Colombia, Germany and Pakistan as part of its global manufacturing infrastructure optimization. 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 cigarette plant closures 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. 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, 2020 2019 2020 2019 Separation programs: (1) European Union $ 24 $ — $ — $ — Eastern Europe 6 — — — Middle East & Africa 8 — — — South & Southeast Asia 10 3 — — East Asia & Australia 12 — — — Latin America & Canada 4 37 — 22 Total separation programs 64 40 — 22 Asset impairment charges: (1) European Union 3 — — — Eastern Europe 1 — — — Middle East & Africa 1 — — — South & Southeast Asia 1 17 — — East Asia & Australia 1 — — — Latin America & Canada — 8 — — Total asset impairment charges 7 25 — — Asset impairment and exit costs $ 71 $ 65 $ — $ 22 (1) Organizational design optimization pre-tax charges were allocated across all operating segments. 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, 2020 was as follows: (in millions) Liability balance, January 1, 2020 $ 191 Charges, net 64 Cash spent (115) Currency/other 4 Liability balance, September 30,2020 $ 144 |
Deconsolidation of RBH
Deconsolidation of RBH | 9 Months Ended |
Sep. 30, 2020 | |
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 the 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. Related Parties - Investments in Unconsolidated Subsidiaries, Equity Securities and Other . 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. |
Stock Plans (Tables)
Stock Plans (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Disclosure of share-based compensation arrangements by payment award | During the nine months ended September 30, 2020 and 2019, shares granted to eligible employees and the weighted-average grant date fair value per share related to RSU awards were as follows: Number of Weighted-Average Grant Date Fair Value Per RSU Award Granted 2020 1,712,750 $ 85.81 2019 1,717,230 $ 77.25 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, 2020 $ 98 $ 30 2019 $ 91 $ 27 During the nine months ended September 30, 2020 and 2019, 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 2020 671,220 $ 86.04 $ 80.36 2019 647,700 $ 77.23 $ 83.59 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, 2020 $ 30 ($ 2) 2019 $ 43 $ 10 |
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: 2020 2019 Risk-free interest rate (a) 1.4 % 2.4 % Expected volatility (b) 23.5 % 21.4 % (a) Based on the U.S. Treasury yield curve. (b) Determined using the observed historical volatility. |
Benefit Plans (Tables)
Benefit Plans (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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) 2020 2019 2020 2019 Net pension costs (income) $ (13) $ (16) $ (5) $ (6) Net postemployment costs 75 72 26 25 Net postretirement costs 6 5 2 1 Total pension and other employee benefit costs $ 68 $ 61 $ 23 $ 20 |
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) 2020 2019 2020 2019 Service cost $ 198 $ 161 $ 68 $ 54 Interest cost 54 89 19 29 Expected return on plan assets (265) (247) (92) (82) Amortization: Net loss 197 142 68 47 Prior service cost 1 — — — Net periodic pension cost $ 185 $ 145 $ 63 $ 48 (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, 2020 | |
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, 2019 $ 1,338 $ 300 $ 89 $ 2,898 $ 551 $ 682 $ 5,858 Changes due to: Currency 18 3 (15) (116) (13) (88) (211) Balances, September 30, 2020 $ 1,356 $ 303 $ 74 $ 2,782 $ 538 $ 594 $ 5,647 |
Schedule of amortizable intangible assets | Details of other intangible assets were as follows: September 30, 2020 December 31, 2019 (in millions) Weighted-Average Remaining Useful Life Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Non-amortizable intangible assets $ 1,199 $ 1,199 $ 1,319 $ 1,319 Amortizable intangible assets: Trademarks 13 years 1,197 $ 562 635 1,217 $ 526 691 Distribution networks 8 years 109 73 36 113 72 41 Other* 8 years 104 48 56 106 44 62 Total other intangible assets $ 2,609 $ 683 $ 1,926 $ 2,755 $ 642 $ 2,113 |
Schedule of non-amortizable intangible assets | Details of other intangible assets were as follows: September 30, 2020 December 31, 2019 (in millions) Weighted-Average Remaining Useful Life Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Non-amortizable intangible assets $ 1,199 $ 1,199 $ 1,319 $ 1,319 Amortizable intangible assets: Trademarks 13 years 1,197 $ 562 635 1,217 $ 526 691 Distribution networks 8 years 109 73 36 113 72 41 Other* 8 years 104 48 56 106 44 62 Total other intangible assets $ 2,609 $ 683 $ 1,926 $ 2,755 $ 642 $ 2,113 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives Not Designated as Hedging Instruments | For the nine months and three months ended September 30, 2020 and 2019, these items impacted the condensed consolidated statement of earnings as follows: (pre-tax, in millions) Derivatives not Designated Statement of Earnings Amount of Gain/(Loss) For the Nine Months Ended September 30, For the Three Months Ended September 30, 2020 2019 2020 2019 Derivative contracts Interest expense, net $ 59 $ 79 $ 11 $ 31 Total $ 59 $ 79 $ 11 $ 31 |
Fair Value of Derivative Contracts | The fair value of PMI’s derivative contracts included in the condensed consolidated balance sheets as of September 30, 2020 and December 31, 2019, were as follows: Derivative Assets Derivative Liabilities Fair Value Fair Value At At At At (in millions) Balance Sheet Classification September 30, 2020 December 31, 2019 Balance Sheet Classification September 30, 2020 December 31, 2019 Derivative contracts designated as hedging instruments Other current assets $ 164 $ 319 Other accrued liabilities $ 89 $ 23 Other assets 35 21 Income taxes and other liabilities 351 301 Derivative contracts not designated as hedging instruments Other current assets 55 50 Other accrued liabilities 90 70 Other assets — — Income taxes and other liabilities 35 25 Total derivatives $ 254 $ 390 $ 565 $ 419 |
Cash Flow and Net Investment Hedging Activities Effect on Condensed Consolidated Statements of Earnings and Other Comprehensive Earnings | For the nine months and three months ended September 30, 2020 and 2019, PMI's cash flow and net investment hedging instruments impacted the condensed consolidated statements of earnings and comprehensive earnings as follows: (pre-tax, in millions) For the Nine Months Ended September 30, Amount of Gain/(Loss) Recognized in Other Comprehensive Earnings/(Losses) on Derivatives Statement of Earnings Amount of Gain/(Loss) Reclassified from Other Comprehensive Earnings/(Losses) into Earnings 2020 2019 2020 2019 Derivatives in Cash Flow Hedging Relationship Derivative contracts $ (45) $ (39) Net revenues $ 4 $ 22 Cost of sales 7 — Marketing, administration and research costs 15 (3) Interest expense, net (8) (4) Derivatives in Net Investment Hedging Relationship Derivative contracts (52) 564 Total $ (97) $ 525 $ 18 $ 15 (pre-tax, in millions) For the Three Months Ended September 30, Amount of Gain/(Loss) Recognized in Other Comprehensive Earnings/(Losses) on Derivatives Statement of Earnings Amount of Gain/(Loss) Reclassified from Other Comprehensive Earnings/(Losses) into Earnings 2020 2019 2020 2019 Derivatives in Cash Flow Hedging Relationship Derivative contracts $ (38) $ (16) Net revenues $ — $ (7) Cost of sales — — Marketing, administration and research costs 4 (4) Interest expense, net (3) (2) Derivatives in Net Investment Hedging Relationship Derivative contracts (321) 419 Total $ (359) $ 403 $ 1 $ (13) |
Qualifying Hedging Activity Reported in Accumulated Other Comprehensive Earnings (Losses), Net of Income Taxes | Hedging activity affected accumulated other comprehensive losses, net of income taxes, as follows: (in millions) For the Nine Months Ended September 30, For the Three Months Ended September 30, 2020 2019 2020 2019 Gain/(loss) at beginning of period, $ 3 $ 35 $ (18) $ (10) Derivative (gains)/losses transferred to earnings (17) (12) (2) 13 Change in fair value (37) (34) (31) (14) Gain/(loss) as of September 30, $ (51) $ (11) $ (51) $ (11) |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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, 2020 2019 2020 2019 Net earnings attributable to PMI $ 6,080 $ 5,569 $ 2,307 $ 1,896 Less distributed and undistributed earnings attributable to share-based payment awards 15 13 5 5 Net earnings for basic and diluted EPS $ 6,065 $ 5,556 $ 2,302 $ 1,891 Weighted-average shares for basic EPS 1,557 1,556 1,558 1,556 Plus contingently issuable performance stock units (PSUs) — — — — Weighted-average shares for diluted EPS 1,557 1,556 1,558 1,556 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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, 2020 2019 2020 2019 Net revenues: European Union $ 7,960 $ 7,381 $ 2,950 $ 2,645 Eastern Europe 2,470 2,300 899 899 Middle East & Africa 2,348 3,058 768 1,127 South & Southeast Asia 3,211 3,607 1,071 1,246 East Asia & Australia 4,045 4,094 1,358 1,252 Latin America & Canada (1) 1,216 1,652 400 473 Net revenues $ 21,250 $ 22,092 $ 7,446 $ 7,642 Operating income (loss): European Union $ 3,924 $ 3,346 $ 1,588 $ 1,255 Eastern Europe 610 284 245 (101) Middle East & Africa 819 1,304 261 519 South & Southeast Asia 1,290 1,471 402 539 East Asia & Australia 1,792 1,520 637 451 Latin America & Canada (1) 328 100 110 125 Operating income $ 8,763 $ 8,025 $ 3,243 $ 2,788 (1) 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 19. Deconsolidation of RBH . 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. • Canadian tobacco litigation-related expense - See Note 8. Contingencies and Note 19. 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 19. 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. • Asset impairment and exit costs - See Note 18. Asset Impairment and Exit Costs for a breakdown of these costs by segment for the nine months and three months ended September 30, 2020 and 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, 2020 2019 2020 2019 Net revenues: Combustible products: European Union $ 6,099 $ 6,139 $ 2,244 $ 2,178 Eastern Europe 1,681 1,774 636 664 Middle East & Africa 2,296 2,810 768 1,064 South & Southeast Asia 3,211 3,607 1,071 1,246 East Asia & Australia 1,876 2,074 605 680 Latin America & Canada 1,196 1,634 393 466 Total combustible products $ 16,360 $ 18,039 $ 5,716 $ 6,298 Reduced-risk products: European Union $ 1,861 $ 1,242 $ 706 $ 467 Eastern Europe 789 526 263 235 Middle East & Africa 52 248 — 63 South & Southeast Asia — — — — East Asia & Australia 2,169 2,020 753 572 Latin America & Canada 20 18 7 7 Total reduced-risk products $ 4,890 $ 4,053 $ 1,730 $ 1,344 Total PMI net revenues $ 21,250 $ 22,092 $ 7,446 $ 7,642 |
Contingencies (Tables)
Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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 23, 2020, October 22, 2019 and October 23, 2018:¹ Type of Case Number of Cases Pending as of October 23, 2020 Number of Cases Pending as of October 22, 2019 Number of Cases Pending as of October 23, 2018 Individual Smoking and Health Cases 43 49 63 Smoking and Health Class Actions 9 10 10 Health Care Cost Recovery Actions 17 17 16 Label-Related Class Actions — — 1 Individual Label-Related Cases 5 5 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 three pending cases where a verdict was returned in favor of the plaintiff: ______ 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 $2.4 billion)). The trial court awarded CAD 90,000 (approximately $68,440) in punitive damages, allocating CAD 30,000 (approximately $22,810) to our subsidiary. The trial court ordered defendants to pay CAD 1 billion (approximately $760 million) of the compensatory damage award, CAD 200 million (approximately $152.1 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 $99.6 million) in punitive damages, allocating CAD 46 million (approximately $35 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 $1,414), 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, 2020 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | At September 30, 2020 and December 31, 2019, PMI’s long-term debt consisted of the following: (in millions) September 30, 2020 December 31, 2019 U.S. dollar notes, 1.125% to 6.375% (average interest rate 3.342%), due through 2044 $ 19,732 $ 19,783 Foreign currency obligations: Euro notes, 0.125% to 3.125% (average interest rate 1.983%), due through 2039 8,811 9,822 Swiss franc notes, 1.625% to 2.000% (average interest rate 1.830%), due through 2024 597 899 Other (average interest rate 3.019%), due through 2025 198 203 29,338 30,707 Less current portion of long-term debt 1,992 4,051 $ 27,346 $ 26,656 |
Schedule of Committed Credit Facilities | At September 30, 2020, PMI's total committed credit facilities were as follows: (in billions) Type Committed 364-day revolving credit, expiring February 2, 2021 $ 2.0 Multi-year revolving credit, expiring October 1, 2022 3.5 Multi-year revolving credit, expiring February 10, 2025 2.0 Total facilities $ 7.5 |
Schedule Of Debt Issuances During Current Period | PMI's debt issuances in the first nine months of 2020 were as follows: (in millions) Type Face Value Interest Rate Issuance Maturity U.S. dollar notes (a) $750 1.125% May 2020 May 2023 U.S. dollar notes (a) $750 1.500% May 2020 May 2025 U.S. dollar notes (a) $750 2.100% May 2020 May 2030 (a) Interest on these notes is payable semi-annually in arrears beginning in November 2020. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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, 2020, were as follows: (in millions) Fair Value at September 30, 2020 Quoted Prices Significant Significant Assets: Equity securities (1) $ 244 $ 244 $ — $ — Derivative contracts 254 — 254 — Total assets $ 498 $ 244 $ 254 $ — Liabilities: Debt $ 32,934 $ 32,763 $ 171 $ — Derivative contracts 565 — 565 — Total liabilities $ 33,499 $ 32,763 $ 736 $ — (1) Unrealized pre-tax loss of $78 million ($62 million net of tax) on equity securities was recorded in the condensed consolidated statements of earnings for the nine months ended September 30, 2020. During the three months ended September 30, 2020, PMI did not record any unrealized gains or losses on equity securities in the condensed consolidated statements of earnings. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Losses (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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: At At At (in millions) September 30, 2020 December 31, 2019 September 30, 2019 Currency translation adjustments $ (6,910) $ (5,537) $ (5,649) Pension and other benefits (3,606) (3,829) (3,306) Derivatives accounted for as hedges (51) 3 (11) Total accumulated other comprehensive losses $ (10,567) $ (9,363) $ (8,966) |
Balance Sheet Offsetting (Table
Balance Sheet Offsetting (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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 Financial Instruments Cash Collateral Received/Pledged Net Amount At September 30, 2020 Assets Derivative contracts $ 254 $ — $ 254 $ (185) $ (54) $ 15 Liabilities Derivative contracts $ 565 $ — $ 565 $ (185) $ (368) $ 12 At December 31, 2019 Assets Derivative contracts $ 390 $ — $ 390 $ (297) $ (91) $ 2 Liabilities Derivative contracts $ 419 $ — $ 419 $ (297) $ (59) $ 63 |
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 Financial Instruments Cash Collateral Received/Pledged Net Amount At September 30, 2020 Assets Derivative contracts $ 254 $ — $ 254 $ (185) $ (54) $ 15 Liabilities Derivative contracts $ 565 $ — $ 565 $ (185) $ (368) $ 12 At December 31, 2019 Assets Derivative contracts $ 390 $ — $ 390 $ (297) $ (91) $ 2 Liabilities Derivative contracts $ 419 $ — $ 419 $ (297) $ (59) $ 63 |
Related Parties - Investments_2
Related Parties - Investments in Unconsolidated Subsidiaries, Equity Securities and Other (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Earnings and Balance Sheet Activities with Related Parties - Investments in Unconsolidated Subsidiaries, equity securities and Other | PMI’s net revenues and expenses with the above related parties were as follows: For the Nine Months Ended September 30, For the Three Months Ended September 30, (in millions) 2020 2019 2020 2019 Net revenues: Megapolis Group $ 1,609 $ 1,537 $ 583 $ 622 Other 813 770 290 279 Net revenues (a) $ 2,422 $ 2,307 $ 873 $ 901 Expenses: Other $ 38 $ 41 $ 11 $ 14 Expenses $ 38 $ 41 $ 11 $ 14 (a) Net revenues exclude excise taxes and VAT billed to customers. PMI’s balance sheet activity with the above related parties was as follows: (in millions) At September 30, 2020 At December 31, 2019 Receivables: Megapolis Group $ 534 $ 375 Other 239 148 Receivables $ 773 $ 523 Payables: Other $ 19 $ 20 Payables $ 19 $ 20 |
Product Warranty (Tables)
Product Warranty (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Guarantees and Product Warranties [Abstract] | |
Schedule of Accrued Product Warranties | At September 30, 2020 and December 31, 2019, these amounts were as follows: (in millions) At September 30, 2020 At December 31, 2019 Balance at beginning of period $ 140 $ 67 Changes due to: Warranties issued 204 303 Settlements (189) (230) Currency 4 — Balance at end of period $ 159 $ 140 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Lease cost components | The components of PMI’s lease cost were as follows for the nine months and three months ended September 30, 2020 and 2019: For the Nine Months Ended September 30, For the Three Months Ended September 30, (in millions) 2020 2019 2020 2019 Operating lease cost $ 177 $ 180 $ 60 $ 61 Short-term lease cost 37 45 12 15 Variable lease cost 23 20 8 10 Total lease cost $ 237 $ 245 $ 80 $ 86 |
Asset Impairment and Exit Cos_2
Asset Impairment and Exit Costs (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Pre-Tax 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, 2020 2019 2020 2019 Separation programs: (1) European Union $ 24 $ — $ — $ — Eastern Europe 6 — — — Middle East & Africa 8 — — — South & Southeast Asia 10 3 — — East Asia & Australia 12 — — — Latin America & Canada 4 37 — 22 Total separation programs 64 40 — 22 Asset impairment charges: (1) European Union 3 — — — Eastern Europe 1 — — — Middle East & Africa 1 — — — South & Southeast Asia 1 17 — — East Asia & Australia 1 — — — Latin America & Canada — 8 — — Total asset impairment charges 7 25 — — Asset impairment and exit costs $ 71 $ 65 $ — $ 22 (1) Organizational design optimization pre-tax charges were allocated across all operating segments. |
Movement in Exit Cost Liabilities | The movement in exit cost liabilities for the nine months ended September 30, 2020 was as follows: (in millions) Liability balance, January 1, 2020 $ 191 Charges, net 64 Cash spent (115) Currency/other 4 Liability balance, September 30,2020 $ 144 |
Stock Plans (Additional Informa
Stock Plans (Additional Information) (Details) - shares | Sep. 30, 2020 | May 31, 2017 |
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) | 17,277,020 | |
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) | 934,372 | |
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] $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)year$ / sharesshares | Sep. 30, 2019USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of Shares Granted (in shares) | shares | 1,712,750 | 1,717,230 | ||
Weighted-Average Grant Date Fair Value Per RSU Award Granted (in dollars per share) | $ / shares | $ 85.81 | $ 77.25 | ||
Compensation Expense Related to Awards | $ 30 | $ 27 | $ 98 | $ 91 |
Unrecognized compensation cost related to non-vested stock awards | $ 164 | $ 164 | ||
Award requisite service period | 3 years | |||
Minimum retirement age | year | 58 | |||
Stock awards vested during period (in shares) | shares | 1,128,308 | |||
Grant Date Fair Value [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value of vested stock awards | $ 110 | |||
Total Fair Value [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value of vested stock awards | $ 97 |
Stock Plans (PSU Awards) (Detai
Stock Plans (PSU Awards) (Details) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)performance_metricyear$ / sharesshares | Sep. 30, 2019USD ($)$ / sharesshares | |
Performance Shares [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Length of performance cycle period | 3 years | |||
Absolute basis | 40.00% | 50.00% | 40.00% | 50.00% |
Currency-neutral compound annual adjusted diluted earnings per share growth rate | 30.00% | 30.00% | ||
Performance against specific measures of transformation | 30.00% | 20.00% | 30.00% | 20.00% |
Annual adjusted operating income growth rate, excluding acquisitions | 30.00% | 30.00% | ||
Performance metrics predefined at time of grant | performance_metric | 3 | |||
Aggregate weighted performance factor | 100.00% | |||
Number of shares of common stock issued for each vested PSU (in shares) | shares | 1 | |||
Number of Shares Granted (in shares) | shares | 671,220 | 647,700 | ||
Risk-free interest rate | 1.40% | 2.40% | ||
Expected volatility | 23.50% | 21.40% | ||
Compensation Expense Related to Awards | $ (2) | $ 10 | $ 30 | $ 43 |
Unrecognized compensation cost related to non-vested stock awards | $ 47 | $ 47 | ||
Minimum retirement age | year | 58 | |||
Stock awards vested during period (in shares) | shares | 343,806 | |||
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 | $ 35 | |||
Performance Shares [Member] | Total Fair Value [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value of vested stock awards | $ 30 | |||
Performance Shares [Member] | Minimum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting rights, percentage | 0.00% | |||
Performance Shares [Member] | Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting rights, percentage | 200.00% | |||
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) | $ / shares | $ 86.04 | $ 77.23 | ||
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) | $ / shares | $ 80.36 | $ 83.59 |
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, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Total pension and other employee benefit costs | $ 23 | $ 20 | $ 68 | $ 61 |
Pension Plan [Member] | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Total pension and other employee benefit costs | (5) | (6) | (13) | (16) |
Postemployment Benefit Plans [Member] | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Total pension and other employee benefit costs | 26 | 25 | 75 | 72 |
Postretirement Benefit Costs [Member] | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Total pension and other employee benefit costs | $ 2 | $ 1 | $ 6 | $ 5 |
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, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 68 | $ 54 | $ 198 | $ 161 |
Interest cost | 19 | 29 | 54 | 89 |
Expected return on plan assets | (92) | (82) | (265) | (247) |
Amortization: | ||||
Net loss | 68 | 47 | 197 | 142 |
Prior service cost | 0 | 0 | 1 | 0 |
Net periodic pension cost | $ 63 | $ 48 | $ 185 | $ 145 |
Benefit Plans (Narrative) (Deta
Benefit Plans (Narrative) (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Retirement Benefits [Abstract] | |
Employer contributions | $ 62 |
Anticipated additional employer contributions during the remainder of the current fiscal year | $ 49 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets, net (Movement in Goodwill) (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Goodwill [Roll Forward] | |
Beginning Balance | $ 5,858 |
Changes due to: | |
Currency | (211) |
Ending Balance | 5,647 |
European Union [Member] | |
Goodwill [Roll Forward] | |
Beginning Balance | 1,338 |
Changes due to: | |
Currency | 18 |
Ending Balance | 1,356 |
Eastern Europe [Member] | |
Goodwill [Roll Forward] | |
Beginning Balance | 300 |
Changes due to: | |
Currency | 3 |
Ending Balance | 303 |
Middle East & Africa [Member] | |
Goodwill [Roll Forward] | |
Beginning Balance | 89 |
Changes due to: | |
Currency | (15) |
Ending Balance | 74 |
South & Southeast Asia [Member] | |
Goodwill [Roll Forward] | |
Beginning Balance | 2,898 |
Changes due to: | |
Currency | (116) |
Ending Balance | 2,782 |
East Asia & Australia [Member] | |
Goodwill [Roll Forward] | |
Beginning Balance | 551 |
Changes due to: | |
Currency | (13) |
Ending Balance | 538 |
Latin America & Canada [Member] | |
Goodwill [Roll Forward] | |
Beginning Balance | 682 |
Changes due to: | |
Currency | (88) |
Ending Balance | $ 594 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets, net (Other Intangible Assets) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Non-amortizable intangible assets | $ 1,199 | $ 1,319 |
Finite-Lived Intangible Assets [Line Items] | ||
Amortizable intangible assets, Accumulated Amortization | 683 | 642 |
Total other intangible assets, gross | 2,609 | 2,755 |
Total other intangible assets, net | $ 1,926 | 2,113 |
Trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-average remaining useful life | 13 years | |
Amortizable intangible assets, Gross Carrying Amount | $ 1,197 | 1,217 |
Amortizable intangible assets, Accumulated Amortization | 562 | 526 |
Amortizable intangible assets, Net | $ 635 | 691 |
Distribution Networks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-average remaining useful life | 8 years | |
Amortizable intangible assets, Gross Carrying Amount | $ 109 | 113 |
Amortizable intangible assets, Accumulated Amortization | 73 | 72 |
Amortizable intangible assets, Net | $ 36 | 41 |
Other [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-average remaining useful life | 8 years | |
Amortizable intangible assets, Gross Carrying Amount | $ 104 | 106 |
Amortizable intangible assets, Accumulated Amortization | 48 | 44 |
Amortizable intangible assets, Net | $ 56 | $ 62 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets, net (Additional Information) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Non-amortizable intangible assets, currency movements | $ 120,000,000 | ||||
Finite-lived intangible assets, currency movements | 27,000,000 | ||||
Amortization of intangibles | $ 18,000,000 | $ 15,000,000 | 55,000,000 | $ 50,000,000 | |
Estimated amortization expense, year one, assuming no additional transactions occur that require the amortization of intangible assets | 73,000,000 | 73,000,000 | |||
Estimated amortization expense, year two, assuming no additional transactions occur that require the amortization of intangible assets | 73,000,000 | 73,000,000 | |||
Estimated amortization expense, year three, assuming no additional transactions occur that require the amortization of intangible assets | 73,000,000 | 73,000,000 | |||
Estimated amortization expense, year four, assuming no additional transactions occur that require the amortization of intangible assets | 73,000,000 | 73,000,000 | |||
Estimated amortization expense, year five, assuming no additional transactions occur that require the amortization of intangible assets | $ 73,000,000 | 73,000,000 | |||
Goodwill, impairment loss | $ 0 | ||||
Trademarks and Distribution Networks [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization of intangibles | 55,000,000 | ||||
Change in accumulated amortization, currency movements | $ 14,000,000 |
Financial Instruments (Narrativ
Financial Instruments (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Derivative [Line Items] | ||||
Unrealized gain (loss) on hedges of net investments | $ (588) | $ 12 | $ (1,373) | $ 363 |
Gain on amounts excluded from effectiveness testing | 46 | 54 | 150 | 171 |
Derivative Contract [Member] | ||||
Derivative [Line Items] | ||||
Notional amount | 24,100 | 24,100 | ||
Derivative instruments, losses to be reclassified to earnings | 12 | $ 12 | ||
Derivative Contract [Member] | Maximum [Member] | ||||
Derivative [Line Items] | ||||
Maximum length of time hedged in a cash flow hedge | 21 months | |||
Derivative Contract [Member] | Not Designated as Hedging Instrument [Member] | ||||
Derivative [Line Items] | ||||
Notional amount | 10,000 | $ 10,000 | ||
Gains (losses) on derivatives not designated as hedging instruments | (79) | 86 | (105) | 25 |
Derivative Contract [Member] | Cash Flow Hedging [Member] | ||||
Derivative [Line Items] | ||||
Notional amount | 5,800 | 5,800 | ||
Derivative Contract [Member] | Net Investment Hedging [Member] | ||||
Derivative [Line Items] | ||||
Notional amount | 8,300 | 8,300 | ||
Unrealized gain (loss) on hedges of net investments | $ (402) | $ 598 | $ (276) | $ 771 |
Financial Instruments (Fair Val
Financial Instruments (Fair Value of Derivative Contracts) (Details) - Derivative Contract [Member] - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Derivatives, Fair Value [Line Items] | ||
Derivative asset fair value | $ 254 | $ 390 |
Derivative liability fair value | 565 | 419 |
Designated as Hedging Instrument [Member] | Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset fair value | 164 | 319 |
Designated as Hedging Instrument [Member] | Other Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset fair value | 35 | 21 |
Designated as Hedging Instrument [Member] | Other Accrued Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability fair value | 89 | 23 |
Designated as Hedging Instrument [Member] | Income Taxes and Other Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability fair value | 351 | 301 |
Not Designated as Hedging Instrument [Member] | Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset fair value | 55 | 50 |
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 | 90 | 70 |
Not Designated as Hedging Instrument [Member] | Income Taxes and Other Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability fair value | $ 35 | $ 25 |
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, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain/(Loss) Recognized in Other Comprehensive Earnings/(Losses) on Derivatives in Cash Flow Hedging Relationship | $ (38) | $ (16) | $ (45) | $ (39) |
Amount of Gain/(Loss) Recognized in Other Comprehensive Earnings/(Losses) on Derivatives in Net Investment Hedging Relationship | (321) | 419 | (52) | 564 |
Total Amount of Gain/(Loss) Recognized in Other Comprehensive Earnings/(Losses) on Derivatives | (359) | 403 | (97) | 525 |
Amount of Gain/(Loss) Reclassified from Other Comprehensive Earnings/(Losses) into Earnings | 1 | (13) | 18 | 15 |
Not Designated as Hedging Instrument [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain/(Loss) Recognized in Earnings | 11 | 31 | 59 | 79 |
Net Revenue [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain/(Loss) Reclassified from Other Comprehensive Earnings/(Losses) into Earnings | 0 | (7) | 4 | 22 |
Cost of Sales [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain/(Loss) Reclassified from Other Comprehensive Earnings/(Losses) into Earnings | 0 | 0 | 7 | 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 | (4) | 15 | (3) |
Interest Expense, Net [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain/(Loss) Reclassified from Other Comprehensive Earnings/(Losses) into Earnings | (3) | (2) | (8) | (4) |
Interest Income Expense Net [Member] | Not Designated as Hedging Instrument [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain/(Loss) Recognized in Earnings | $ 11 | $ 31 | $ 59 | $ 79 |
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, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Hedging Activity, Affecting Accumulated Other Comprehensive Income [Roll Forward] | ||||
Derivative (gains)/losses transferred to earnings | $ (2) | $ 13 | $ (17) | $ (12) |
Change in fair value | (31) | (14) | (37) | (34) |
Derivative Contract [Member] | Other Comprehensive Income (Loss) [Member] | ||||
Hedging Activity, Affecting Accumulated Other Comprehensive Income [Roll Forward] | ||||
Gain/(loss) at beginning of period, | (18) | (10) | 3 | 35 |
Derivative (gains)/losses transferred to earnings | (2) | 13 | (17) | (12) |
Change in fair value | (31) | (14) | (37) | (34) |
Gain/(loss) as of September 30, | $ (51) | $ (11) | $ (51) | $ (11) |
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, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Earnings Per Share [Abstract] | ||||
Net earnings attributable to PMI | $ 2,307 | $ 1,896 | $ 6,080 | $ 5,569 |
Less distributed and undistributed earnings attributable to share-based payment awards | 5 | 5 | 15 | 13 |
Net earnings for basic and diluted EPS | $ 2,302 | $ 1,891 | $ 6,065 | $ 5,556 |
Weighted-average shares for basic EPS (in shares) | 1,558,000,000 | 1,556,000,000 | 1,557,000,000 | 1,556,000,000 |
Plus contingently issuable performance stock units (PSUs) (in shares) | 0 | 0 | 0 | 0 |
Weighted-average shares for diluted EPS (in shares) | 1,558,000,000 | 1,556,000,000 | 1,557,000,000 | 1,556,000,000 |
Antidilutive stock awards (in shares) | 0 | 0 |
Segment Reporting (Details)
Segment Reporting (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Sep. 30, 2020USD ($)segment | Sep. 30, 2019USD ($) | |
Segment Reporting Information [Line Items] | |||||
Number of reportable segments | segment | 6 | ||||
Number of operating segments | segment | 6 | ||||
Total PMI net revenues | $ 7,446 | $ 7,642 | $ 21,250 | $ 22,092 | |
Operating income | 3,243 | 2,788 | 8,763 | 8,025 | |
Combustible Products [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total PMI net revenues | 5,716 | 6,298 | 18,039 | ||
Reduced-Risk Products [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total PMI net revenues | 1,730 | 1,344 | 4,053 | ||
Marketing Administration And Research Costs [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Deconsolidation amount | 239 | ||||
Operating Segments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total PMI net revenues | 21,250 | ||||
Operating Segments [Member] | Combustible Products [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total PMI net revenues | 16,360 | ||||
Operating Segments [Member] | Reduced-Risk Products [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total PMI net revenues | 4,890 | ||||
European Union [Member] | Operating Segments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total PMI net revenues | 2,950 | 2,645 | 7,960 | 7,381 | |
Operating income | 1,588 | 1,255 | 3,924 | 3,346 | |
European Union [Member] | Operating Segments [Member] | Combustible Products [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total PMI net revenues | 2,244 | 2,178 | 6,099 | 6,139 | |
European Union [Member] | Operating Segments [Member] | Reduced-Risk Products [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total PMI net revenues | 706 | 467 | 1,861 | 1,242 | |
Eastern Europe [Member] | Other Litigation [Member] | The Moscow Tax Inspectorate for Major Taxpayers Audit [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 | |||
Eastern Europe [Member] | Operating Segments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total PMI net revenues | 899 | 899 | 2,470 | 2,300 | |
Operating income | 245 | (101) | 610 | 284 | |
Eastern Europe [Member] | Operating Segments [Member] | Combustible Products [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total PMI net revenues | 636 | 664 | 1,681 | 1,774 | |
Eastern Europe [Member] | Operating Segments [Member] | Reduced-Risk Products [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total PMI net revenues | 263 | 235 | 789 | 526 | |
Middle East & Africa [Member] | Operating Segments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total PMI net revenues | 768 | 1,127 | 2,348 | 3,058 | |
Operating income | 261 | 519 | 819 | 1,304 | |
Middle East & Africa [Member] | Operating Segments [Member] | Combustible Products [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total PMI net revenues | 768 | 1,064 | 2,296 | 2,810 | |
Middle East & Africa [Member] | Operating Segments [Member] | Reduced-Risk Products [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total PMI net revenues | 0 | 63 | 52 | 248 | |
South & Southeast Asia [Member] | Operating Segments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total PMI net revenues | 1,071 | 1,246 | 3,211 | 3,607 | |
Operating income | 402 | 539 | 1,290 | 1,471 | |
South & Southeast Asia [Member] | Operating Segments [Member] | Combustible Products [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total PMI net revenues | 1,071 | 1,246 | 3,211 | 3,607 | |
South & Southeast Asia [Member] | Operating Segments [Member] | Reduced-Risk Products [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total PMI net revenues | 0 | 0 | 0 | 0 | |
East Asia & Australia [Member] | Operating Segments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total PMI net revenues | 1,358 | 1,252 | 4,045 | 4,094 | |
Operating income | 637 | 451 | 1,792 | 1,520 | |
East Asia & Australia [Member] | Operating Segments [Member] | Combustible Products [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total PMI net revenues | 605 | 680 | 1,876 | 2,074 | |
East Asia & Australia [Member] | Operating Segments [Member] | Reduced-Risk Products [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total PMI net revenues | 753 | 572 | 2,169 | 2,020 | |
Latin America & Canada [Member] | Operating Segments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total PMI net revenues | 400 | 473 | 1,216 | 1,652 | |
Operating income | 110 | 125 | 328 | 100 | |
Latin America & Canada [Member] | Operating Segments [Member] | Combustible Products [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total PMI net revenues | 393 | 466 | 1,196 | 1,634 | |
Latin America & Canada [Member] | Operating Segments [Member] | Reduced-Risk Products [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total PMI net revenues | $ 7 | $ 7 | $ 20 | 18 | |
Canada [Member] | Appellate Ruling [Member] | RBH [Member] | Smoking And Health Class Actions [Member] | Cecilia Letourneau & Conseil Quebecois Sur La Tabac Et La Sante and Jean-Yves Blais Cases [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Amount of litigation charge | $ 194 | $ 194 |
Contingencies (Tobacco-Related
Contingencies (Tobacco-Related Litigation) (Details) | Mar. 01, 2019USD ($)litigation_case | Mar. 01, 2019CAD ($)litigation_case | May 27, 2015USD ($)plaintiffmanufacturer | May 27, 2015CAD ($)plaintiffmanufacturer | Jun. 20, 2012cigarette | Jul. 10, 2009cigarette | Oct. 30, 2015USD ($) | Oct. 30, 2015CAD ($) | Mar. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020litigation_case |
Loss Contingencies [Line Items] | |||||||||||
Number of cases decided in favor of PM | 509 | ||||||||||
Number of cases decided in favor of plaintiff | 13 | ||||||||||
Cases Remaining On Appeal [Member] | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Cases on appeal | 3 | ||||||||||
Case Decided In Favor Of Plaintiff [Member] | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Number of cases that reached final resolution in favor of PM | 10 | ||||||||||
Canada [Member] | Adams [Member] | Pending Litigation [Member] | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Minimum number of cigarettes smoked | cigarette | 25,000 | ||||||||||
Canada [Member] | Suzanne Jacklin [Member] | Pending Litigation [Member] | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Minimum number of cigarettes smoked | cigarette | 25,000 | ||||||||||
Canada [Member] | Smoking And Health Class Actions [Member] | Conseil Quebecois Sur Le Tabac Et La Sante and Jean-Yves Blais [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] | 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] | |||||||||||
Compensatory damages awarded | $ 11,800,000,000 | $ 15,500,000,000 | |||||||||
Punitive damages awarded | 68,440 | 90,000 | |||||||||
Damages, reduced amount | $ 10,300,000,000 | $ 13,500,000,000 | |||||||||
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] | |||||||||||
Compensatory damages awarded | $ 2,050,000,000 | $ 2,700,000,000 | $ 2,400,000,000 | $ 3,100,000,000 | |||||||
Damages allocated to subsidiary (percent) | 20.00% | 20.00% | 20.00% | 20.00% | |||||||
Punitive damages awarded | $ 22,810 | $ 30,000 | |||||||||
Canada [Member] | Smoking And Health Class Actions [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] | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Amount to be deposited into trust | $ 836,000,000 | $ 1,100,000,000 | |||||||||
Payment period | 60 days | 60 days | |||||||||
Canada [Member] | Smoking And Health Class Actions [Member] | Cecilia Letourneau & Conseil Quebecois Sur La Tabac Et La Sante and Jean-Yves Blais Cases [Member] | Appellate Ruling [Member] | RBH [Member] | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Motion for security ordered by appeals court, paid by defendant | $ 171,900,000 | $ 226,000,000 | |||||||||
Amount of security ordered, funded by defendant | $ 194,000,000 | $ 257,000,000 | |||||||||
Amount of litigation charge | $ | $ 194,000,000 | $ 194,000,000 | |||||||||
Amount of litigation charge net of tax | $ | $ 142,000,000 | ||||||||||
Number of cases decided in favor of plaintiff | 2 | 2 | |||||||||
Canada [Member] | Smoking And Health Class Actions [Member] | Cecilia Letourneau & Conseil Quebecois Sur La Tabac Et La Sante and Jean-Yves Blais Cases [Member] | Appellate Ruling [Member] | Imperial Tobacco Ltd. [Member] | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Motion for security ordered by appeals court | $ 576,000,000 | $ 758,000,000 | |||||||||
Canada [Member] | Smoking And Health Class Actions [Member] | Cecilia Letourneau [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] | 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 | $ 99,600,000 | $ 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 | |||||||||
Punitive damages, value | $ 43,400,000 | $ 57,000,000 |
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. 23, 2020 | Oct. 22, 2019 | Oct. 23, 2018 |
Individual Smoking And Health Cases [Member] | |||
Loss Contingencies [Line Items] | |||
Cases brought against PM | 49 | 63 | |
Smoking And Health Class Actions [Member] | |||
Loss Contingencies [Line Items] | |||
Cases brought against PM | 10 | 10 | |
Health Care Cost Recovery Actions [Member] | |||
Loss Contingencies [Line Items] | |||
Cases brought against PM | 17 | 16 | |
Label Related Class Action [Member] | |||
Loss Contingencies [Line Items] | |||
Cases brought against PM | 0 | 1 | |
Individual Label Related Cases [Member] | |||
Loss Contingencies [Line Items] | |||
Cases brought against PM | 5 | 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 | 43 | ||
Subsequent Event [Member] | Smoking And Health Class Actions [Member] | |||
Loss Contingencies [Line Items] | |||
Cases brought against PM | 9 | ||
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 (Verdicts and Pos
Contingencies (Verdicts and Post-Trial Developments) (Details) | Mar. 01, 2019CAD ($) | Mar. 01, 2019USD ($) | Aug. 05, 2016USD ($) | Aug. 05, 2016ARS ($) | May 27, 2015CAD ($) | May 27, 2015USD ($) | 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 | $ 179 | 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 | $ 131,000,000 | $ 99,600,000 | ||||||
Canada [Member] | Smoking And Health Class Actions [Member] | Cecilia Letourneau [Member] | Judicial Ruling [Member] | RBH [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Punitive damages awarded | $ 46,000,000 | $ 35,000,000 | ||||||
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 | $ 90,000 | $ 68,440 | ||||||
Compensatory damages awarded | 15,500,000,000 | 11,800,000,000 | ||||||
Awarded compensatory damages that are to be deposited into trust | 1,000,000,000 | 760,000,000 | ||||||
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 | 30,000 | 22,810 | ||||||
Compensatory damages awarded | $ 2,700,000,000 | $ 2,050,000,000 | $ 3,100,000,000 | $ 2,400,000,000 | ||||
Damages allocated to subsidiary (percent) | 20.00% | 20.00% | 20.00% | 20.00% | ||||
Awarded compensatory damages that are to be deposited into trust | $ 200,000,000 | $ 152,100,000 | ||||||
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 | $ 1,414 | $ 110,000 |
Contingencies (Smoking and Heal
Contingencies (Smoking and Health Litigation) (Details) | 1 Months Ended | ||||
Apr. 30, 2004BRL (R$) | Apr. 30, 2004USD ($) | Oct. 23, 2020litigation_case | Oct. 22, 2019litigation_case | Oct. 23, 2018litigation_case | |
Individual Smoking And Health Cases [Member] | Combustible Products [Member] | |||||
Loss Contingencies [Line Items] | |||||
Cases brought against PM | 49 | 63 | |||
Smoking And Health Class Actions [Member] | Brazil [Member] | The Smoker Health Defense Association (ADESF) [Member] | |||||
Loss Contingencies [Line Items] | |||||
Smoking and health loss contingency interest rate | 1.00% | 1.00% | |||
Smoking And Health Class Actions [Member] | Brazil [Member] | Award per smoker per year [Member] | The Smoker Health Defense Association (ADESF) [Member] | |||||
Loss Contingencies [Line Items] | |||||
Damages awarded | R$ 1000 | $ 179 | |||
Smoking And Health Class Actions [Member] | Combustible Products [Member] | |||||
Loss Contingencies [Line Items] | |||||
Cases brought against PM | 10 | 10 | |||
Subsequent Event [Member] | Individual Smoking And Health Cases [Member] | Combustible Products [Member] | |||||
Loss Contingencies [Line Items] | |||||
Cases brought against PM | 43 | ||||
Subsequent Event [Member] | Individual Smoking And Health Cases [Member] | Combustible Products [Member] | Argentina [Member] | |||||
Loss Contingencies [Line Items] | |||||
Cases brought against PM | 31 | ||||
Subsequent Event [Member] | Individual Smoking And Health Cases [Member] | Combustible Products [Member] | Brazil [Member] | |||||
Loss Contingencies [Line Items] | |||||
Cases brought against PM | 3 | ||||
Subsequent Event [Member] | Individual Smoking And Health Cases [Member] | Combustible Products [Member] | Canada [Member] | |||||
Loss Contingencies [Line Items] | |||||
Cases brought against PM | 2 | ||||
Subsequent Event [Member] | Individual Smoking And Health Cases [Member] | Combustible Products [Member] | Chile [Member] | |||||
Loss Contingencies [Line Items] | |||||
Cases brought against PM | 3 | ||||
Subsequent Event [Member] | Individual Smoking And Health Cases [Member] | Combustible Products [Member] | Italy [Member] | |||||
Loss Contingencies [Line Items] | |||||
Cases brought against PM | 1 | ||||
Subsequent Event [Member] | Individual Smoking And Health Cases [Member] | Combustible Products [Member] | Philippines [Member] | |||||
Loss Contingencies [Line Items] | |||||
Cases brought against PM | 1 | ||||
Subsequent Event [Member] | Individual Smoking And Health Cases [Member] | Combustible Products [Member] | Turkey [Member] | |||||
Loss Contingencies [Line Items] | |||||
Cases brought against PM | 1 | ||||
Subsequent Event [Member] | Individual Smoking And Health Cases [Member] | Combustible Products [Member] | Scotland [Member] | |||||
Loss Contingencies [Line Items] | |||||
Cases brought against PM | 1 | ||||
Subsequent Event [Member] | Smoking And Health Class Actions [Member] | Combustible Products [Member] | |||||
Loss Contingencies [Line Items] | |||||
Cases brought against PM | 9 |
Contingencies (Health Care Cost
Contingencies (Health Care Cost Recovery Litigation) (Details) - Health Care Cost Recovery Actions [Member] | May 21, 2019 | Apr. 14, 2014patient | Oct. 17, 2008 | Mar. 13, 2008 | Feb. 26, 2008 | May 25, 2007 | May 09, 2007 | Oct. 23, 2020litigation_case | Oct. 22, 2019litigation_case | Oct. 23, 2018litigation_case |
Brazil [Member] | Pending Litigation [Member] | The Attorney General of Brazil [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Damages sought, period of past reimbursements | 6 years | |||||||||
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 | 17 | 16 | ||||||||
Subsequent Event [Member] | Combustible Products [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Cases brought against PM | 17 | |||||||||
Subsequent Event [Member] | Combustible Products [Member] | Brazil [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Cases brought against PM | 1 | |||||||||
Subsequent Event [Member] | Combustible Products [Member] | Canada [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Cases brought against PM | 10 | |||||||||
Subsequent Event [Member] | Combustible Products [Member] | Korea [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Cases brought against PM | 1 | |||||||||
Subsequent Event [Member] | Combustible Products [Member] | Nigeria [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Cases brought against PM | 5 |
Contingencies (Label-Related Ca
Contingencies (Label-Related Cases) (Details) - Individual Label Related Cases [Member] - Combustible Products [Member] - litigation_case | Oct. 23, 2020 | Oct. 22, 2019 | Oct. 23, 2018 |
Loss Contingencies [Line Items] | |||
Cases brought against PM | 5 | 1 | |
Subsequent Event [Member] | |||
Loss Contingencies [Line Items] | |||
Cases brought against PM | 5 | ||
Subsequent Event [Member] | Italy [Member] | |||
Loss Contingencies [Line Items] | |||
Cases brought against PM | 1 | ||
Subsequent Event [Member] | Chile [Member] | |||
Loss Contingencies [Line Items] | |||
Cases brought against PM | 4 |
Contingencies (Public Civil Act
Contingencies (Public Civil Actions) (Details) - Public Civil Actions [Member] - Combustible Products [Member] - litigation_case | Oct. 23, 2020 | Oct. 22, 2019 | Oct. 23, 2018 |
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) ฿ in Millions, $ in Millions, ₽ in Billions, ₩ in Billions, ر.س in Billions | Jan. 26, 2017USD ($) | Jan. 26, 2017THB (฿) | Jan. 18, 2016USD ($)defendant | Jan. 18, 2016THB (฿)defendant | Jun. 30, 2020USD ($) | Jun. 30, 2020KRW (₩) | Mar. 31, 2020USD ($) | Mar. 31, 2020THB (฿) | Jan. 31, 2020USD ($) | Jan. 31, 2020KRW (₩) | Nov. 30, 2019USD ($) | Nov. 30, 2019THB (฿) | Sep. 30, 2019USD ($) | Sep. 30, 2019RUB (₽) | Dec. 31, 2016USD ($) | Dec. 31, 2016KRW (₩) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Mar. 31, 2017USD ($) | Mar. 31, 2017KRW (₩) | Mar. 31, 2017USD ($) | Mar. 31, 2017KRW (₩) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020SAR (ر.س) |
Loss Contingencies [Line Items] | |||||||||||||||||||||||||
Tax benefit | $ (640) | $ (635) | $ (1,764) | $ (1,670) | |||||||||||||||||||||
Thailand [Member] | Other Litigation [Member] | The Department of Special Investigations of the Government of Thailand [Member] | |||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||
Loss contingency, damages sought, value | $ 632 | ฿ 19,800 | |||||||||||||||||||||||
Amount of fine imposed by trial court | $ 4.1 | ฿ 130 | $ 38.3 | ฿ 1,200 | |||||||||||||||||||||
Korea [Member] | Other Litigation [Member] | The South Korean Board Of Audit And Inspection [Member] | |||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||
Amounts paid | $ 88.1 | ₩ 100 | $ 151.5 | ₩ 172 | $ 240 | ₩ 272 | |||||||||||||||||||
Amount of taxes not underpaid as ruled by trial court | $ 192 | ₩ 218 | |||||||||||||||||||||||
Amount of alleged underpayments not underpaid as ruled by court | $ 48 | ₩ 54 | |||||||||||||||||||||||
Eastern Europe [Member] | Other Litigation [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 | ||||||||||||||||||||||||
Tax benefit | $ 59 | ||||||||||||||||||||||||
SAUDI ARABIA | Other Litigation [Member] | Saudi Arabia Customs General Authority Case [Member] | |||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||
Additional customs duties ordered to be paid | $ 396 | $ 396 | ر.س 1.5 | ||||||||||||||||||||||
Percent to be paid by subsidiary | 80.00% | 80.00% | 80.00% | ||||||||||||||||||||||
Pending Litigation [Member] | Thailand [Member] | Other Litigation [Member] | The Department of Special Investigations of the Government of Thailand [Member] | |||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||
Number of defendants | defendant | 8 | 8 | |||||||||||||||||||||||
Loss contingency, damages sought, value | $ 2,600 | ฿ 80,800 |
Contingencies (Third-Party Guar
Contingencies (Third-Party Guarantees) (Details) - Philip Morris Investment B.V. [Member] $ in Millions, $ in Millions | Oct. 17, 2020CAD ($) | Oct. 17, 2020USD ($) | Sep. 30, 2020 |
Medicago Inc. [Member] | |||
Loss Contingencies [Line Items] | |||
Ownership percentage | 32.00% | ||
Subsequent Event [Member] | Financial Guarantee [Member] | |||
Loss Contingencies [Line Items] | |||
Value of financial guarantee | $ 173 | $ 131 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2020 | |
Income Taxes [Line Items] | |||||
Effective tax rate | 20.90% | 24.10% | 21.40% | 22.20% | |
Change in regulations | $ 93 | ||||
Minimum [Member] | |||||
Income Taxes [Line Items] | |||||
Statue of limitations | 3 years | ||||
Maximum [Member] | |||||
Income Taxes [Line Items] | |||||
Statue of limitations | 5 years | ||||
Tax Years 2015-2018 [Member] | |||||
Income Taxes [Line Items] | |||||
Dividend repatriation reduction | $ 67 | ||||
Forecast [Member] | Minimum [Member] | |||||
Income Taxes [Line Items] | |||||
Effective tax rate | 22.00% | ||||
Forecast [Member] | Maximum [Member] | |||||
Income Taxes [Line Items] | |||||
Effective tax rate | 23.00% | ||||
RBH [Member] | |||||
Income Taxes [Line Items] | |||||
Tax adjustments | $ 49 |
Indebtedness (Narrative) (Detai
Indebtedness (Narrative) (Details) - USD ($) | Jan. 31, 2020 | Sep. 30, 2020 | Feb. 10, 2020 | Feb. 09, 2020 | Dec. 31, 2019 |
Line of Credit Facility [Line Items] | |||||
Short-term borrowings, carrying value | $ 152,000,000 | $ 338,000,000 | |||
Committed credit facilities | 7,500,000,000 | ||||
Borrowings under committed credit facilities | 0 | ||||
364-day revolving credit expiring February 2, 2021 [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Committed credit facilities | $ 2,000,000,000 | 2,000,000,000 | |||
Debt instrument, term | 364 days | ||||
Multi-year Revolving Credit Facility, Expiring February 10, 2025 [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Committed credit facilities | $ 2,000,000,000 | $ 2,000,000,000 | |||
Multi-year Revolving Credit Facility, Expiring February 10, 2020 [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Committed credit facilities | $ 2,500,000,000 | ||||
Borrowings under committed credit facilities | $ 0 |
Indebtedness (Long-Term Debt) (
Indebtedness (Long-Term Debt) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | ||
Long-term debt, including current maturities | $ 29,338 | $ 30,707 |
Less current portion of long-term debt | 1,992 | 4,051 |
Long-term debt | $ 27,346 | 26,656 |
US Dollar Notes [Member] | ||
Debt Instrument [Line Items] | ||
Average interest rate | 3.342% | |
Long-term debt, including current maturities | $ 19,732 | 19,783 |
US Dollar Notes [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate, stated percentage | 1.125% | |
US Dollar Notes [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate, stated percentage | 6.375% | |
Euro Notes [Member] | Foreign Currency Obligations [Member] | ||
Debt Instrument [Line Items] | ||
Average interest rate | 1.983% | |
Long-term debt, including current maturities | $ 8,811 | 9,822 |
Euro Notes [Member] | Foreign Currency Obligations [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate, stated percentage | 0.125% | |
Euro Notes [Member] | Foreign Currency Obligations [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate, stated percentage | 3.125% | |
Swiss Franc Notes [Member] | Foreign Currency Obligations [Member] | ||
Debt Instrument [Line Items] | ||
Average interest rate | 1.83% | |
Long-term debt, including current maturities | $ 597 | 899 |
Swiss Franc Notes [Member] | Foreign Currency Obligations [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate, stated percentage | 1.625% | |
Swiss Franc Notes [Member] | Foreign Currency Obligations [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate, stated percentage | 2.00% | |
Other [Member] | Foreign Currency Obligations [Member] | ||
Debt Instrument [Line Items] | ||
Average interest rate | 3.019% | |
Long-term debt, including current maturities | $ 198 | $ 203 |
Indebtedness Indebtedness (Issu
Indebtedness Indebtedness (Issuances) (Details) - US Dollar Notes [Member] | Sep. 30, 2020USD ($) |
1.125% Notes due May 2023 [Member] | |
Debt Instrument [Line Items] | |
Face Value | $ 750,000,000 |
Interest Rate | 1.125% |
1.500% Notes due May 2025 [Member] | |
Debt Instrument [Line Items] | |
Face Value | $ 750,000,000 |
Interest Rate | 1.50% |
2.100% Notes due May 2030 [Member] | |
Debt Instrument [Line Items] | |
Face Value | $ 750,000,000 |
Interest Rate | 2.10% |
Indebtedness (Credit Facilities
Indebtedness (Credit Facilities) (Details) - USD ($) | Sep. 30, 2020 | Feb. 10, 2020 | Jan. 31, 2020 |
Line of Credit Facility [Line Items] | |||
Committed credit facilities | $ 7,500,000,000 | ||
364-day revolving credit expiring February 2, 2021 [Member] | |||
Line of Credit Facility [Line Items] | |||
Committed credit facilities | 2,000,000,000 | $ 2,000,000,000 | |
Multi-year revolving credit, expiring October 1, 2022 [Member] | |||
Line of Credit Facility [Line Items] | |||
Committed credit facilities | 3,500,000,000 | ||
Multi-year Revolving Credit Facility, Expiring February 10, 2025 [Member] | |||
Line of Credit Facility [Line Items] | |||
Committed credit facilities | $ 2,000,000,000 | $ 2,000,000,000 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) $ in Millions | Sep. 30, 2020USD ($) |
Fair Value Disclosures [Abstract] | |
Finance lease, liability, noncurrent | $ 45 |
Debt excluding short-term borrowings and capital lease obligations, carrying value | $ 29,293 |
Fair Value Measurements (Aggreg
Fair Value Measurements (Aggregate Fair Value of Derivative Financial Instruments, Equity Securities and Debt (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Liabilities: | |
Equity securities, unrealized gain (loss) | $ (78) |
Equity securities, unrealized gain (loss), net | (62) |
Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) [Member] | |
Assets: | |
Equity securities | 244 |
Derivative contracts | 0 |
Total assets | 244 |
Liabilities: | |
Debt | 32,763 |
Derivative contracts | 0 |
Total liabilities | 32,763 |
Significant Other Observable Inputs (Level 2) [Member] | |
Assets: | |
Equity securities | 0 |
Derivative contracts | 254 |
Total assets | 254 |
Liabilities: | |
Debt | 171 |
Derivative contracts | 565 |
Total liabilities | 736 |
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 | 244 |
Derivative contracts | 254 |
Total assets | 498 |
Liabilities: | |
Debt | 32,934 |
Derivative contracts | 565 |
Total liabilities | $ 33,499 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Losses (Components of Accumulated Other Comprehensive Earnings (Losses), Net of Tax) (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||||
Total accumulated other comprehensive losses | $ (10,245) | $ (10,120) | $ (9,599) | $ (9,155) | $ (9,409) | $ (10,739) |
Currency translation adjustments [Member] | ||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||||
Total accumulated other comprehensive losses | (6,910) | (5,537) | (5,649) | |||
Pension and other benefits [Member] | ||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||||
Total accumulated other comprehensive losses | (3,606) | (3,829) | (3,306) | |||
Derivatives accounted for as hedges [Member] | ||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||||
Total accumulated other comprehensive losses | (51) | 3 | (11) | |||
Accumulated Other Comprehensive Losses [Member] | ||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||||
Total accumulated other comprehensive losses | $ (10,567) | $ (10,009) | $ (9,363) | $ (8,966) | $ (9,051) | $ (10,111) |
Balance Sheet Offsetting (Detai
Balance Sheet Offsetting (Details) - Derivative Contract [Member] - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Assets | ||
Gross Amounts Recognized | $ 254 | $ 390 |
Gross Amount Offset in the Condensed Consolidated Balance Sheet | 0 | 0 |
Net Amounts Presented in the Condensed Consolidated Balance Sheet | 254 | 390 |
Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet, Financial Instruments | (185) | (297) |
Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet, Cash Collateral Received/Pledged | (54) | (91) |
Net Amount | 15 | 2 |
Liabilities | ||
Gross Amounts Recognized | 565 | 419 |
Gross Amount Offset in the Condensed Consolidated Balance Sheet | 0 | 0 |
Net Amounts Presented in the Condensed Consolidated Balance Sheet | 565 | 419 |
Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet, Financial Instruments | (185) | (297) |
Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet, Cash Collateral Received/Pledged | (368) | (59) |
Net Amount | $ 12 | $ 63 |
Related Parties - Investments_3
Related Parties - Investments in Unconsolidated Subsidiaries, Equity Securities and Other (Narrative) (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | Mar. 22, 2019 | |
Schedule of Equity Method Investments [Line Items] | |||
Equity method investments | $ 918 | $ 1,053 | |
Difference between equity method investment carrying value and book value | 762 | 901 | |
Dividends from unconsolidated subsidiaries | $ 53 | 100 | |
IPM India [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Parent ownership percentage | 56.30% | ||
EITA [Member] | STAEM [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership percentage | 51.00% | ||
Management Et Developpement Des Actifs Et Des Ressources Holding (MADAR Holding) [Member] | STAEM [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership percentage | 49.00% | ||
TTI [Member] | PMM [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Noncontrolling ownership percentage | 33.00% | ||
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 | $ 733 | $ 863 | |
Megapolis Group | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership percentage | 23.00% | ||
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% | ||
RBH [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity securities | $ 3,280 |
Related Parties - Investments_4
Related Parties - Investments in Unconsolidated Subsidiaries, Equity Securities and Other (Balance Sheet and Earnings Activity) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Schedule of Equity Method Investments [Line Items] | |||||
Net revenues | $ 873 | $ 901 | $ 2,422 | $ 2,307 | |
Expenses | 11 | 14 | 38 | 41 | |
Receivables | 773 | 773 | $ 523 | ||
Payables | 19 | 19 | 20 | ||
Megapolis Group | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Net revenues | 583 | 622 | 1,609 | 1,537 | |
Receivables | 534 | 534 | 375 | ||
Other | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Net revenues | 290 | 279 | 813 | 770 | |
Expenses | 11 | $ 14 | 38 | $ 41 | |
Receivables | 239 | 239 | 148 | ||
Payables | $ 19 | $ 19 | $ 20 |
Sale of Accounts Receivable (De
Sale of Accounts Receivable (Details) - USD ($) $ in Billions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Sale of Accounts Receivable [Abstract] | ||||
Servicing liability | $ 0 | $ 0 | $ 0 | $ 0 |
Trade receivables sold and derecognized from the Consolidated Balance Sheets | 8.4 | 7.8 | ||
Trade receivables sold and derecognized that remain uncollected | 0.6 | 0.6 | 0.6 | $ 0.6 |
Loss on sale of trade receivables | $ 0 | $ 0 | $ 0 |
Product Warranty (Narrative) (D
Product Warranty (Narrative) (Details) | 9 Months Ended |
Sep. 30, 2020 | |
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, 2020 | Dec. 31, 2019 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Balance at beginning of period | $ 140 | $ 67 |
Changes due to: | ||
Warranties issued | 204 | 303 |
Settlements | (189) | (230) |
Currency | 4 | 0 |
Balance at end of period | $ 159 | $ 140 |
Leases (Details)
Leases (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Lessee, Lease, Description [Line Items] | ||||
Operating lease cost | $ 60 | $ 61 | $ 177 | $ 180 |
Short-term lease cost | 12 | 15 | 37 | 45 |
Variable lease cost | 8 | 10 | 23 | 20 |
Total lease cost | 80 | 86 | 237 | 245 |
Cost of Sales [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Total lease cost | 19 | 21 | 55 | 59 |
Marketing Administration And Research Costs [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Total lease cost | $ 61 | $ 65 | $ 182 | $ 186 |
Asset Impairment and Exit Cos_3
Asset Impairment and Exit Costs (Asset Impairment and Exit Costs by Segment) (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Aug. 31, 2020employee | Jun. 30, 2020employee | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | |
Restructuring Cost and Reserve [Line Items] | ||||||
Total separation programs | $ 0 | $ 22,000,000 | $ 64,000,000 | $ 40,000,000 | ||
Asset impairment charges | 0 | 0 | 7,000,000 | 25,000,000 | ||
Asset impairment and exit costs | 0 | 22,000,000 | 65,000,000 | |||
Switzerland Restructuring, Phase 1 [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Expected number of positions eliminated | employee | 240 | |||||
Asset impairment and exit costs | 0 | 71,000,000 | ||||
Switzerland Restructuring, Phase 2 [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Expected number of positions eliminated | employee | 200 | |||||
Asset impairment and exit costs | 0 | |||||
Pakistan [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Asset impairment and exit costs | 20,000,000 | |||||
Colombia [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Asset impairment and exit costs | 45,000,000 | |||||
European Union [Member] | Operating Segments [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Total separation programs | 0 | 0 | 24,000,000 | 0 | ||
Asset impairment charges | 0 | 0 | 3,000,000 | 0 | ||
Eastern Europe [Member] | Operating Segments [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Total separation programs | 0 | 0 | 6,000,000 | 0 | ||
Asset impairment charges | 0 | 0 | 1,000,000 | 0 | ||
Middle East & Africa [Member] | Operating Segments [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Total separation programs | 0 | 0 | 8,000,000 | 0 | ||
Asset impairment charges | 0 | 0 | 1,000,000 | 0 | ||
South & Southeast Asia [Member] | Operating Segments [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Total separation programs | 0 | 0 | 10,000,000 | 3,000,000 | ||
Asset impairment charges | 0 | 0 | 1,000,000 | 17,000,000 | ||
East Asia & Australia [Member] | Operating Segments [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Total separation programs | 0 | 0 | 12,000,000 | 0 | ||
Asset impairment charges | 0 | 0 | 1,000,000 | 0 | ||
Latin America & Canada [Member] | Operating Segments [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Total separation programs | 0 | 22,000,000 | 4,000,000 | 37,000,000 | ||
Asset impairment charges | $ 0 | $ 0 | $ 0 | $ 8,000,000 |
Asset Impairment and Exit Cos_4
Asset Impairment and Exit Costs (Movement in Exit Cost Liabilities) (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Movement in exit cost liabilities | |
Liability balance, January 1, 2020 | $ 191 |
Charges, net | 64 |
Cash spent | (115) |
Currency/other | 4 |
Liability balance, September 30,2020 | $ 144 |
Asset Impairment and Exit Cos_5
Asset Impairment and Exit Costs (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
Restructuring Cost and Reserve [Line Items] | ||
Future cash payments for exit costs expected to be paid | $ 115 | |
Forecast [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Future cash payments for exit costs expected to be paid | $ 31 |
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 ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020litigation_case | Mar. 22, 2019USD ($) |
Loss Contingencies [Line Items] | ||||||
Number of cases decided in favor of plaintiff | litigation_case | 13 | |||||
Marketing Administration And Research Costs [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Deconsolidation amount | $ 239 | |||||
Measurement Input, Discount Rate [Member] | Valuation Technique, Discounted Cash Flow [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Pending litigation liabilities measurement input | 0.08 | |||||
Measurement Input, Terminal Growth Rate [Member] | Valuation Technique, Discounted Cash Flow [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Pending litigation liabilities measurement input | 0.025 | |||||
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 | |||||
Canada [Member] | Appellate Ruling [Member] | RBH [Member] | Smoking And Health Class Actions [Member] | Cecilia Letourneau & Conseil Quebecois Sur La Tabac Et La Sante and Jean-Yves Blais Cases [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 | $ 194 | $ 257 |