Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Fair value of derivative contracts

The fair value of PMI’s derivative contracts included in the condensed consolidated balance sheets as of June 30, 2022 and December 31, 2021, were as follows:

	Derivative Assets					Derivative Liabilities
		Fair Value					Fair Value
		At		At			At		At
(in millions)	Balance Sheet Classification	June 30, 2022		December 31, 2021		Balance Sheet Classification	June 30, 2022		December 31, 2021
Derivative contracts designated as hedging instruments	Other current assets	$	388	$	173	Other accrued liabilities	$	8	$	34
	Other assets	297		22		Income taxes and other liabilities	75		190
Derivative contracts not designated as hedging instruments	Other current assets	111		37		Other accrued liabilities	151		75
	Other assets	4		—		Income taxes and other liabilities	19		—
Total gross amount derivatives contracts presented in the condensed consolidated balance sheets		$	800	$	232		$	253	$	299
Gross amounts not offset in the condensed consolidated balance sheets
Financial instruments		(148)		(126)			(148)		(126)
Cash collateral received/pledged		(636)		(93)			(68)		(151)
Net amount		$	16	$	13		$	37	$	22

Derivative contracts impact on the condensed consolidated statements of earnings and other comprehensive earnings

For the six months ended June 30, 2022 and 2021, PMI's derivative contracts impacted the condensed consolidated statements of earnings and comprehensive earnings as follows:

(pre-tax, in millions)	For the Six Months Ended June 30,
	Amount of Gain/(Loss) Recognized in Other Comprehensive Earnings/(Losses) on Derivatives				Statement of Earnings Classification of Gain/(Loss) on Derivatives	Amount of Gain/(Loss) Reclassified from Other Comprehensive Earnings/(Losses) into Earnings				Amount of Gain/(Loss) Recognized in Earnings
	2022		2021			2022		2021		2022		2021
Derivative contracts designated as hedging instruments:
Cash flow hedges	$	355	$	89
					Net revenues	$	81	$	17
					Cost of sales	—		—
					Marketing, administration and research costs	(10)		(12)
					Interest expense, net	(7)		(7)
Fair value hedges					Interest expense, net					$	(57)	$	—
Net investment hedges (a)	530		192		Interest expense, net (b)					68		82
Derivative contracts not designated as hedging instruments:					Interest expense, net					43		25
					Marketing, administration and research costs (c)					65		196
Total	$	885	$	281		$	64	$	(2)	$	119	$	303

(a) Amount of gains (losses) on hedges of net investments principally related to changes in exchange and interest rates between the Euro and U.S. dollar.

(b) Represent the gains for amounts excluded from the effectiveness testing

(c) The gains (losses) from these contracts attributable to changes in foreign currency exchange rates are primarily offset by the (losses) and gains generated by the underlying intercompany and third-party loans being hedged

For the three months ended June 30, 2022 and 2021, PMI's derivative contracts impacted the condensed consolidated statements of earnings and comprehensive earnings as follows:

(pre-tax, in millions)	For the Three Months Ended June 30,
	Amount of Gain/(Loss) Recognized in Other Comprehensive Earnings/(Losses) on Derivatives				Statement of Earnings Classification of Gain/(Loss) on Derivatives	Amount of Gain/(Loss) Reclassified from Other Comprehensive Earnings/(Losses) into Earnings				Amount of Gain/(Loss) Recognized in Earnings
	2022		2021			2022		2021		2022		2021
Derivative contracts designated as hedging instruments:
Cash flow hedges	$	225	$	(1)
					Net revenues	$	64	$	17
					Cost of sales	—		—
					Marketing, administration and research costs	(7)		6
					Interest expense, net	(4)		(4)
Fair value hedges					Interest expense, net					$	(20)	$	—
Net investment hedges (a)	425		(126)		Interest expense, net (b)					35		40
Derivative contracts not designated as hedging instruments:					Interest expense, net					35		14
					Marketing, administration and research costs (c)					66		(91)
Total	$	650	$	(127)		$	53	$	19	$	116	$	(37)

(a) Amount of gains (losses) on hedges of net investments principally related to changes in exchange and interest rates between the Euro and U.S. dollar

(b) Represent the gains for amounts excluded from the effectiveness testing

(c) The gains (losses) from these contracts attributable to changes in foreign currency exchange rates are primarily offset by the (losses) and gains generated by the underlying intercompany and third-party loans being hedged

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 Six Months Ended June 30,				For the Three Months Ended June 30,
	2022		2021		2022		2021
Gain/(loss) as of beginning of period	$	4	$	(85)	$	105	$	12
Derivative (gains)/losses transferred to earnings	(55)		2		(46)		(19)
Change in fair value	301		77		191		1
Gain/(loss) as of June 30,	$	250	$	(6)	$	250	$	(6)