Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 23, 2018 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Philip Morris International Inc. | |
Entity Central Index Key | 1,413,329 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 1,554,473,725 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
ASSETS | ||
Cash and cash equivalents | $ 7,200 | $ 8,447 |
Trade receivables (less allowances of $25 in 2018 and $25 in 2017) | 3,373 | 3,194 |
Other receivables | 521 | 544 |
Inventories: | ||
Leaf tobacco | 2,737 | 2,606 |
Other raw materials | 1,481 | 1,563 |
Finished product | 4,374 | 4,637 |
Total inventory, net | 8,592 | 8,806 |
Other current assets | 907 | 603 |
Total current assets | 20,593 | 21,594 |
Property, plant and equipment, at cost | 15,056 | 14,566 |
Less: accumulated depreciation | 7,597 | 7,295 |
Total property, plant and equipment, net | 7,459 | 7,271 |
Goodwill | 7,667 | 7,666 |
Other intangible assets, net | 2,455 | 2,432 |
Investments in unconsolidated subsidiaries and equity securities | 1,395 | 1,074 |
Deferred income taxes | 1,150 | 1,007 |
Other assets | 2,351 | 1,924 |
TOTAL ASSETS | 43,070 | 42,968 |
LIABILITIES | ||
Short-term borrowings | 608 | 499 |
Current portion of long-term debt | 4,662 | 2,506 |
Accounts payable | 2,156 | 2,242 |
Accrued liabilities: | ||
Marketing and selling | 668 | 708 |
Taxes, except income taxes | 5,085 | 5,324 |
Employment costs | 770 | 856 |
Dividends payable | 1,675 | 1,669 |
Other | 1,556 | 1,346 |
Income taxes | 508 | 812 |
Total current liabilities | 17,688 | 15,962 |
Long-term debt | 29,578 | 31,334 |
Deferred income taxes | 822 | 799 |
Employment costs | 2,272 | 2,271 |
Income taxes and other liabilities | 3,192 | 2,832 |
Total liabilities | 53,552 | 53,198 |
Contingencies | ||
STOCKHOLDERS’ (DEFICIT) EQUITY | ||
Common stock, no par value (2,109,316,331 shares issued in 2018 and 2017) | 0 | 0 |
Additional paid-in capital | 1,856 | 1,972 |
Earnings reinvested in the business | 29,985 | 29,859 |
Accumulated other comprehensive losses | (8,883) | (8,535) |
Total stockholders' equity before treasury stock | 22,958 | 23,296 |
Less: cost of repurchased stock (554,850,007 and 556,098,569 shares in 2018 and 2017, respectively) | 35,308 | 35,382 |
Total PMI stockholders’ deficit | (12,350) | (12,086) |
Noncontrolling interests | 1,868 | 1,856 |
Total stockholders’ deficit | (10,482) | (10,230) |
TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY | $ 43,070 | $ 42,968 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Receivables, allowances | $ 25 | $ 25 |
Common stock, no par value (in dollars per share) | ||
Common stock, shares issued (in shares) | 2,109,316,331 | 2,109,316,331 |
Repurchased stock, shares (in shares) | 554,850,007 | 556,098,569 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Earnings - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||
Revenues including excise taxes | $ 18,426 | $ 16,556 |
Excise taxes on products | 11,530 | 10,492 |
Net revenues | 6,896 | 6,064 |
Cost of sales | 2,615 | 2,177 |
Gross profit | 4,281 | 3,887 |
Marketing, administration and research costs | 1,833 | 1,449 |
Amortization of intangibles | 22 | 22 |
Operating income | 2,426 | 2,416 |
Interest expense, net | 227 | 219 |
Pension and other employee benefit costs | 6 | 20 |
Earnings before income taxes | 2,193 | 2,177 |
Provision for income taxes | 559 | 541 |
Equity investments and securities (income)/loss, net | (13) | (22) |
Net earnings | 1,647 | 1,658 |
Net earnings attributable to noncontrolling interests | 91 | 68 |
Net earnings attributable to PMI | $ 1,556 | $ 1,590 |
Per share data: | ||
Basic earnings per share (in dollars per share) | $ 1 | $ 1.02 |
Diluted earnings per share (in dollars per share) | 1 | 1.02 |
Dividends declared (in dollars per share) | $ 1.07 | $ 1.04 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Earnings - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Net earnings | $ 1,647 | $ 1,658 |
Change in currency translation adjustments: | ||
Unrealized gains (losses), net of income taxes of $192 in 2018 and $156 in 2017 | (371) | 303 |
Change in net loss and prior service cost: | ||
Amortization of net losses, prior service costs and net transition costs, net of income taxes of ($11) in 2018 and ($9) in 2017 | 50 | 56 |
Change in fair value of derivatives accounted for as hedges: | ||
Gains (losses) recognized, net of income taxes of $10 in 2018 and $11 in 2017 | (64) | (75) |
(Gains) losses transferred to earnings, net of income taxes of ($1) in 2018 and $2 in 2017 | 2 | 5 |
Total other comprehensive earnings (losses) | (383) | 289 |
Total comprehensive earnings | 1,264 | 1,947 |
Less comprehensive earnings attributable to: | ||
Noncontrolling interests | 56 | 63 |
Comprehensive earnings attributable to PMI | $ 1,208 | $ 1,884 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Comprehensive Earnings (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Income taxes on currency translation adjustments | $ 192 | $ 156 |
Income taxes on amortization of net losses, prior service costs and net transition costs | (11) | (9) |
Income taxes on (loss)/gain recognized from fair value of derivatives accounted for as hedges | 10 | 11 |
Income taxes on loss/(gain) transferred to earnings from fair value of derivatives accounted for as hedges | $ (1) | $ 2 |
Condensed Consolidated Stateme7
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, 2016 | $ (10,900) | $ 0 | $ 1,964 | $ 30,397 | $ (9,559) | $ (35,490) | $ 1,788 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | 1,658 | 1,590 | 68 | ||||
Other comprehensive earnings (losses), net of income taxes | 289 | 294 | (5) | ||||
Issuance of stock awards | 33 | (71) | 104 | ||||
Dividends declared ($1.04 and $1.07 per share for the three months ended March 31, 2017 and 2018, respectively) | (1,620) | (1,620) | |||||
Payments to noncontrolling interests | (17) | (17) | |||||
Other | 0 | (1) | 1 | ||||
Ending balance at Mar. 31, 2017 | (10,557) | 0 | 1,892 | 30,367 | (9,265) | (35,386) | 1,835 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Cumulative effect of initial adoption of new accounting standards | 238 | 238 | |||||
Beginning balance at Dec. 31, 2017 | (10,230) | 0 | 1,972 | 29,859 | (8,535) | (35,382) | 1,856 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | 1,647 | 1,556 | 91 | ||||
Other comprehensive earnings (losses), net of income taxes | (383) | (344) | (39) | ||||
Issuance of stock awards | 45 | (29) | 74 | ||||
Dividends declared ($1.04 and $1.07 per share for the three months ended March 31, 2017 and 2018, respectively) | (1,668) | (1,668) | |||||
Payments to noncontrolling interests | (36) | (36) | |||||
Other | (95) | (87) | (4) | (4) | |||
Ending balance at Mar. 31, 2018 | $ (10,482) | $ 0 | $ 1,856 | $ 29,985 | $ (8,883) | $ (35,308) | $ 1,868 |
Condensed Consolidated Stateme8
Condensed Consolidated Statements of Stockholders' (Deficit) Equity (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Stockholders' Equity [Abstract] | ||
Dividends declared (in dollars per share) | $ 1.07 | $ 1.04 |
Condensed Consolidated Stateme9
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | |||
Net earnings | $ 1,647 | $ 1,658 | |
Adjustments to reconcile net earnings to operating cash flows: | |||
Depreciation and amortization | 242 | 197 | |
Deferred income tax provision | 26 | 27 | |
Cash effects of changes in: | |||
Receivables, net | (113) | 504 | |
Inventories | 338 | 1,243 | |
Accounts payable | (62) | 84 | |
Accrued liabilities and other current assets | (509) | (2,207) | |
Income taxes | (315) | (510) | |
Pension plan contributions | (25) | (18) | |
Other | 151 | (135) | |
Net cash provided by operating activities | 1,380 | 843 | |
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | |||
Capital expenditures | (365) | (292) | |
Investments in unconsolidated subsidiaries and equity securities | (18) | (5) | |
Net investment hedges | (665) | (254) | |
Other | 30 | 8 | |
Net cash used in investing activities | (1,018) | (543) | |
Short-term borrowing activity by original maturity: | |||
Net issuances - maturities of 90 days or less | 103 | 374 | |
Long-term debt proceeds | 0 | 2,482 | |
Long-term debt repaid | 0 | (814) | |
Dividends paid | (1,659) | (1,618) | |
Sale (purchase) of subsidiary shares to/(from) noncontrolling interests | (91) | 0 | |
Other | (91) | (83) | |
Net cash provided by (used in) financing activities | (1,738) | 341 | |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 131 | 234 | |
Cash, cash equivalents and restricted cash: | |||
Increase (Decrease) | [1] | (1,245) | 875 |
Balance at beginning of period | [1] | 8,476 | 4,331 |
Balance at end of period | [1] | $ 7,231 | $ 5,206 |
[1] | Following the adoption of Financial Accounting Standards Update ASU 2016-18, "Statement of Cash Flows: Restricted Cash," the amounts for cash and cash equivalents shown above include restricted cash of $31 million and $130 million as of March 31, 2018 and 2017, respectively, and $29 million and $92 million as of December 31, 2017, and 2016, respectively, which were included in other current assets in the condensed consolidated balance sheets. |
Condensed Consolidated Statem10
Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Statement of Cash Flows [Abstract] | ||||
Restricted cash | $ 31 | $ 29 | $ 130 | $ 92 |
Background and Basis of Present
Background and Basis of Presentation | 3 Months Ended |
Mar. 31, 2018 | |
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. 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 continued smoking. PMI has a range of RRPs in various stages of development, scientific assessment and commercialization. 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 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. To provide a greater focus on both parts of PMI's business -- combustible and reduced-risk products -- and to support PMI's transformation towards a smoke-free future, effective January 1, 2018, PMI began managing its business in six reportable segments as follows: European Union; Eastern Europe; Middle East & Africa; South & Southeast Asia; East Asia & Australia; and Latin America & Canada. For further details, see Note 7. Segment Reporting . Certain prior years' amounts have been reclassified to conform with the current year's presentation, due primarily to new accounting guidance related to revenue recognition, pension costs and restricted cash and PMI’s decision to reorganize its reportable segments. For further details, see the condensed consolidated statements of cash flows, Note 3. Benefit Plans , Note 7. Segment Reporting and Note 18. New Accounting Standards . The changes did not have a material impact on PMI's consolidated financial position, results of operations or cash flows in any of the periods presented. 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, 2017 . |
Stock Plans
Stock Plans | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Plans | Stock Plans: In May 2017, PMI’s shareholders approved the Philip Morris International Inc. 2017 Performance Incentive Plan (the “2017 Plan”). The 2017 Plan replaced the 2012 Performance Incentive Plan, and there will be no additional grants under the replaced 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 March 31, 2018 , shares available for grant under the 2017 Plan were 22,939,200 . 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”). The 2017 Non-Employee Directors Plan replaced the 2008 Stock Compensation Plan for Non-Employee Directors, and there will be no additional grants under the replaced 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 March 31, 2018 , shares available for grant under the plan were 1,000,000 . Restricted share unit (RSU) awards During the three months ended March 31, 2018 and 2017 , shares granted to eligible employees, the weighted-average grant date fair value per share and the recorded compensation expense related to RSU awards were as follows: Number of Shares Granted Weighted-Average Grant Date Fair Value Per RSU Award Granted Compensation Expense Related to RSU Awards (in millions) 2018 1,249,650 $ 100.70 $ 38 2017 1,202,060 $ 98.47 $ 35 As of March 31, 2018 , PMI had $196 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 three months ended March 31, 2018 , 1,378,550 RSU awards vested. The grant date fair value of all the vested awards was approximately $114 million . The total fair value of RSU awards that vested during the three months ended March 31, 2018 was approximately $143 million . Performance share unit (PSU) awards During the three months ended March 31, 2018 and 2017 , 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, over a three -year performance cycle. PMI’s performance metrics consist of PMI’s Total Shareholder Return (TSR) relative to a predetermined peer group and on an absolute basis ( 50% weight), PMI’s currency-neutral compound annual adjusted operating income growth rate, excluding acquisitions ( 30% weight), and PMI’s performance against specific measures of PMI’s transformation ( 20% weight). The aggregate of the weighted performance factors for the three metrics determines the percentage of PSUs that will vest at the end of the three -year performance cycle. The minimum percentage of PSUs that can vest is zero , with a target percentage of 100 and a maximum percentage of 200 . Each 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 three months ended March 31, 2018 and 2017 , shares granted to eligible employees, the grant date fair value per share and the recorded compensation expense related to PSU awards were as follows: Number of Shares Granted PSU Grant Date Fair Value Subject to TSR Performance Factor Per Share (a) PSU Grant Date Fair Value Subject to Other Performance Factors Per Share (b) Compensation Expense Related to PSU Awards (in millions) 2018 401,500 $ 118.98 $ 100.69 $ 21 2017 393,460 $ 128.72 $ 98.29 $ 17 (a) 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. (b) 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 grant. As of March 31, 2018 , PMI had $57 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 three months ended March 31, 2018 , there were no PSU awards that vested. |
Benefit Plans
Benefit Plans | 3 Months Ended |
Mar. 31, 2018 | |
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. PMI adopted ASU 2017-07 "Compensation - Retirement Benefits" on January 1, 2018, retrospectively for all periods. Following adoption, the service cost component of net periodic benefit cost continues to be included within operating income, while all other cost components are included below operating income, within pension and other employee benefit costs, including $19 million and $22 million related to net postemployment costs for the three months ended March 31, 2018 and 2017 , respectively, and $3 million and $4 million related to net postretirement costs for the three months ended March 31, 2018 and 2017 , respectively. Pension Plans Components of Net Periodic Benefit Cost Net periodic pension cost consisted of the following: Pension (1) For the Three Months Ended March 31, (in millions) 2018 2017 Service cost $ 53 $ 51 Interest cost 28 26 Expected return on plan assets (87 ) (79 ) Amortization: Net loss 43 44 Prior service cost — 3 Net periodic pension cost $ 37 $ 45 (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 $25 million were made to the pension plans during the three months ended March 31, 2018 . Currently, PMI anticipates making additional contributions during the remainder of 2018 of approximately $46 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 | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets, net | Goodwill and Other Intangible Assets, net: Goodwill and other intangible assets, net, by segment were as follows: Goodwill Other Intangible Assets, net (in millions) March 31, December 31, March 31, December 31, European Union $ 1,474 $ 1,419 $ 439 $ 458 Eastern Europe 334 321 22 16 Middle East & Africa 107 102 185 178 South & Southeast Asia 2,938 3,010 987 1,004 East Asia & Australia 561 567 59 44 Latin America & Canada 2,253 2,247 763 732 Total $ 7,667 $ 7,666 $ 2,455 $ 2,432 Goodwill primarily reflects PMI’s acquisitions in Canada, Colombia, Greece, Indonesia, Mexico, Pakistan and Serbia, as well as the business combination in the Philippines. The movements in goodwill from December 31, 2017 , 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, 2017 $ 1,419 $ 321 $ 102 $ 3,010 $ 567 $ 2,247 $ 7,666 Changes due to: Currency 55 13 5 (72 ) (6 ) 6 1 Balances, March 31, 2018 $ 1,474 $ 334 $ 107 $ 2,938 $ 561 $ 2,253 $ 7,667 Additional details of other intangible assets were as follows: March 31, 2018 December 31, 2017 (in millions) Gross Accumulated Gross Accumulated Non-amortizable intangible assets $ 1,341 $ 1,323 Amortizable intangible assets 1,818 $ 704 1,798 $ 689 Total other intangible assets $ 3,159 $ 704 $ 3,121 $ 689 Non-amortizable intangible assets substantially consist of trademarks from PMI’s acquisitions in Indonesia in 2005 and Mexico in 2007. Amortizable intangible assets primarily consist of certain trademarks and distribution networks associated with business combinations. The gross carrying amount, the range of useful lives as well as the weighted-average remaining useful life of amortizable intangible assets at March 31, 2018 , were as follows: (dollars in millions) Gross Carrying Amount Initial Estimated Weighted-Average Trademarks $ 1,555 2 - 40 years 19 years Distribution networks 151 5 - 30 years 9 years Other (including farmer contracts 112 4 - 17 years 11 years $ 1,818 Pre-tax amortization expense for intangible assets during the three months ended March 31, 2018 and 2017 was $22 million and $22 million , respectively. Amortization expense for each of the next five years is estimated to be $84 million or less, assuming no additional transactions occur that require the amortization of intangible assets. The increase in the gross carrying amount of other intangible assets from December 31, 2017 , was due primarily to the purchase of additional intellectual property rights related to PMI's reduced-risk products, as well as currency movements. |
Financial Instruments
Financial Instruments | 3 Months Ended |
Mar. 31, 2018 | |
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. The primary currencies to which PMI is exposed include the Australian dollar, Canadian dollar, Euro, Indonesian rupiah, Japanese yen, Mexican peso, Philippine peso, Russian ruble, Swiss franc and Turkish lira. At March 31, 2018 , PMI had contracts with aggregate notional amounts of $33.4 billion of which $7.1 billion related to cash flow hedges, $11.3 billion related to hedges of net investments in foreign operations and $15.0 billion related to other derivatives that primarily offset currency exposures on intercompany financing. Effective January 1, 2018, PMI elected to early adopt Accounting Standard Update 2017-12 “Derivatives and Hedging (Topic 815) Targeted Improvements to Accounting for Hedging Activities,” which did not have a material impact on PMI’s consolidated financial position or results of operations. The fair value of PMI’s foreign exchange contracts included in the condensed consolidated balance sheets as of March 31, 2018 and December 31, 2017 , were as follows: Derivative Assets Derivative Liabilities Fair Value Fair Value (in millions) Balance Sheet Classification At March 31, 2018 At December 31, 2017 Balance Sheet Classification At March 31, 2018 At December 31, 2017 Foreign exchange contracts designated as hedging instruments Other current assets $ 48 $ 84 Other accrued liabilities $ 433 $ 197 Other assets 6 34 Other liabilities 1,237 880 Foreign exchange contracts not designated as hedging instruments Other current assets 60 22 Other accrued liabilities 20 37 Other assets — — Other liabilities 67 14 Total derivatives $ 114 $ 140 $ 1,757 $ 1,128 For the three months ended March 31, 2018 and 2017 , 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 Three Months Ended March 31, Amount of Gain/(Loss) Recognized in Other Comprehensive Earnings/(Losses) on Derivatives Statement of Earnings Classification of Gain/(Loss) Reclassified from Other Comprehensive Earnings/(Losses) into Earnings Amount of Gain/(Loss) Reclassified from Other Comprehensive Earnings/(Losses) into Earnings 2018 2017 2018 2017 Derivatives in Cash Flow Hedging Relationship Foreign exchange contracts $ (74 ) $ (86 ) Net revenues $ (9 ) $ 9 Cost of sales — — Marketing, administration and research costs 8 (9 ) Interest expense, net (2 ) (3 ) Derivatives in Net Investment Hedging Relationship Foreign exchange contracts (608 ) (249 ) Total $ (682 ) $ (335 ) $ (3 ) $ (3 ) Cash Flow Hedges PMI has entered into foreign exchange contracts to hedge the foreign currency exchange and interest rate risks related to certain forecasted transactions. Gains and losses associated with qualifying cash flow hedge contracts is deferred as a component of accumulated other comprehensive losses until the underlying hedged transactions are reported in PMI’s condensed consolidated statements of earnings. As of March 31, 2018 , PMI has hedged forecasted transactions for periods not exceeding the next fifteen months with the exception of one foreign exchange 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 foreign exchange contracts as net investment hedges, primarily of its Euro net assets. For the three months ended March 31, 2018 and 2017 , these hedges of net investments resulted in losses, net of income taxes, of $757 million and $294 million , respectively, principally related to changes in the exchange rates between the Euro and U.S. dollar. These losses were reported as a component of accumulated other comprehensive losses within currency translation adjustments, and were substantially offset by the gains generated on the underlying assets. For the three months ended March 31, 2018 , the gains for amounts excluded from the effectiveness testing recognized in earnings based on the changes in fair value were $67 million and 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 foreign exchange 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 three months ended March 31, 2018 and 2017 , the gains (losses) from contracts for which PMI did not apply hedge accounting were $95 million and $(39) million , respectively. The gains (losses) from these contracts substantially offset the losses and gains generated by the underlying intercompany and third-party loans being hedged. For the three months ended March 31, 2018 and 2017 , the net impact of these contracts on the condensed consolidated statements of earnings was not material. 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 Three Months Ended March 31, 2018 2017 Gain as of January 1, $ 42 $ 97 Derivative (gains)/losses transferred to earnings 2 5 Change in fair value (64 ) (75 ) Gain/(loss) as of March 31, $ (20 ) $ 27 At March 31, 2018 , PMI expects $30 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 | 3 Months Ended |
Mar. 31, 2018 | |
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 Three Months Ended March 31, 2018 2017 Net earnings attributable to PMI $ 1,556 $ 1,590 Less distributed and undistributed earnings attributable to share-based payment awards 3 3 Net earnings for basic and diluted EPS $ 1,553 $ 1,587 Weighted-average shares for basic EPS 1,553 1,552 Plus contingently issuable performance stock units (PSUs) 1 1 Weighted-average shares for diluted EPS 1,554 1,553 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 2018 and 2017 computations, there were no antidilutive stock awards. |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2018 | |
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. Reportable segments for PMI are organized by geographic region and managed by segment managers who are responsible for the operating and financial results of the regions inclusive of all product categories sold in the region. Effective January 1, 2018, PMI began managing its business in six reportable segments. PMI’s reportable segments are the European Union; Eastern Europe; Middle East & Africa; South & Southeast Asia; East Asia & Australia; and Latin America & Canada. PMI records net revenues and operating income to its segments based upon the geographic area in which the customer resides. 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. Effective January 1, 2018, PMI began using operating income to evaluate business segment performance and allocate resources, replacing operating companies income used previously. On January 1, 2018, PMI adopted Financial Accounting Standards Update ASU 2014-09, "Revenue from Contracts with Customers." PMI adopted this standard retrospectively to each prior period presented. For further details on this standard and its impact on PMI, see Note 18. New Accounting Standards . The amounts presented for the reportable segments reflect this adoption. PMI disaggregates its net revenue from contracts with customers by both geographic location and product category for each of PMI's six reportable segments, as PMI believes this best depicts how the nature, amount, timing and uncertainty of its revenue and cash flows are affected by economic factors. Segment data were as follows: (in millions) For the Three Months Ended March 31, 2018 2017 Net revenues: European Union $ 1,988 $ 1,740 Eastern Europe 567 516 Middle East & Africa 961 961 South & Southeast Asia 1,081 1,031 East Asia & Australia 1,591 1,210 Latin America & Canada 708 606 Net revenues $ 6,896 $ 6,064 Operating income: European Union $ 740 $ 748 Eastern Europe 151 159 Middle East & Africa 374 491 South & Southeast Asia 429 370 East Asia & Australia 515 472 Latin America & Canada 217 176 Operating income $ 2,426 $ 2,416 PMI's net revenues by product category were as follows: (in millions) For the Three Months Ended March 31, 2018 2017 Net revenues: Combustible products: European Union $ 1,836 $ 1,709 Eastern Europe 527 513 Middle East & Africa 884 957 South & Southeast Asia 1,081 1,031 East Asia & Australia 737 813 Latin America & Canada 704 605 Total combustible products $ 5,769 $ 5,629 Reduced-risk products: European Union $ 152 $ 31 Eastern Europe 40 3 Middle East & Africa 77 4 South & Southeast Asia — — East Asia & Australia 854 396 Latin America & Canada 4 — Total reduced-risk products $ 1,127 $ 435 Total PMI net revenues $ 6,896 $ 6,064 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 our e-vapor products. PMI recognizes revenue, when control is transferred to the customer, typically either upon shipment or delivery of goods. |
Contingencies
Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
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, 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. To date, no tobacco-related case has been finally resolved in favor of a plaintiff against us, our subsidiaries or indemnitees. The table below lists the number of tobacco-related cases pending against us and/or our subsidiaries or indemnitees as of April 24, 2018 , April 25, 2017 and April 22, 2016 : Type of Case Number of Cases Pending as of April 24, 2018 Number of Cases Pending as of April 25, 2017 Number of Cases Pending as of April 22, 2016 Individual Smoking and Health Cases 62 63 66 Smoking and Health Class Actions 11 11 11 Health Care Cost Recovery Actions 16 16 16 Label-Related Class Actions 1 — — Individual Label-Related Cases 1 1 3 Public Civil Actions 2 2 3 Since 1995, when the first tobacco-related litigation was filed against a PMI entity, 476 Smoking and Health, Label-Related, Health Care Cost Recovery, and Public Civil Actions in which we and/or one of our subsidiaries and/or indemnitees were a defendant have been terminated in our favor. Thirteen cases have had decisions in favor of plaintiffs. Nine of these cases have subsequently reached final resolution in our favor and four remain on appeal. The table below lists the verdict and significant post-trial developments in the four pending cases where a verdict was returned in favor of the plaintiff: Date Location of Type of Verdict Post-Trial February 2004 Brazil/The Smoker Health Defense Association Class Action The Civil Court of São Paulo found defendants liable without hearing evidence. In April 2004, the court awarded “moral damages” of R$1,000 (approximately $293) per smoker per full year of smoking plus interest at the rate of 1% per month, as of the date of the ruling. The court did not assess actual damages, which were to be assessed in a second phase of the case. The size of the class was not defined in the ruling. Defendants appealed to the São Paulo Court of Appeals, which annulled the ruling in November 2008, finding that the trial court had inappropriately ruled without hearing evidence and returned the case to the trial court for further proceedings. In May 2011, the trial court dismissed the claim. Plaintiff appealed the decision. In February 2015, the appellate court unanimously dismissed plaintiff's appeal. In September 2015, plaintiff appealed to the Superior Court of Justice. In addition, the defendants filed a constitutional appeal to the Federal Supreme Tribunal on the basis that plaintiff did not have standing to bring the lawsuit. This appeal is still pending. 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 $103 million) in punitive damages, allocating CAD 46 million (approximately $36 million) to our subsidiary. 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, our subsidiary commenced the appellate process with the Court of Appeal of Quebec. Our subsidiary also filed a motion to cancel the trial court’s order for payment into a trust notwithstanding appeal. In July 2015, the Court of Appeal granted the motion to cancel and overturned the trial court’s ruling that our subsidiary make the payment into a trust. In August 2015, plaintiffs filed a motion for security with the Court of Appeal covering both the Létourneau case and the Blais case described below. In October 2015, the Court of Appeal granted the motion and ordered our subsidiary to furnish security totaling CAD 226 million (approximately $177 million) to cover both the Létourneau and Blais cases. The hearing for the merits appeal took place in November 2016. (See below for further detail.) 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 $12.1 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 $70,500) in punitive damages, allocating CAD 30,000 (approximately $23,500) to our subsidiary. The trial court ordered defendants to pay CAD 1 billion (approximately $783 million) of the compensatory damage award, CAD 200 million (approximately $157 million) of which is our subsidiary’s portion, into a trust within 60 days. In June 2015, our subsidiary commenced the appellate process with the Court of Appeal of Quebec. Our subsidiary also filed a motion to cancel the trial court’s order for payment into a trust notwithstanding appeal. In July 2015, the Court of Appeal granted the motion to cancel and overturned the trial court’s ruling that our subsidiary make the payment into a trust. In August 2015, plaintiffs filed a motion for security with the Court of Appeal. In October 2015, the Court of Appeal granted the motion and ordered our subsidiary to furnish security totaling, together with the Létourneau case, CAD 226 million (approximately $177 million). The hearing for the merits appeal took place in November 2016. (See below 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 $5,446), 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 April 24, 2018 , there were a number of smoking and health cases pending against us, our subsidiaries or indemnitees, as follows: • 62 cases brought by individual plaintiffs in Argentina ( 34 ), Brazil ( 10 ), Canada ( 4 ), Chile ( 6 ), Costa Rica ( 1 ), Italy ( 3 ), the Philippines ( 1 ), Russia ( 1 ), Turkey ( 1 ) and Scotland ( 1 ), compared with 63 such cases on April 25, 2017 , and 66 cases on April 22, 2016 ; and • 11 cases brought on behalf of classes of individual plaintiffs in Brazil ( 2 ) and Canada ( 9 ), compared with 11 such cases on April 25, 2017 and 11 such cases on April 22, 2016 . In the first class action pending in Brazil, The Smoker Health Defense Association (ADESF) v. Souza Cruz, S.A. and Philip Morris Marketing, S.A., Nineteenth Lower Civil Court of the Central Courts of the Judiciary District of São Paulo, Brazil , filed July 25, 1995, our subsidiary and another member of the industry are defendants. The plaintiff, a consumer organization, is seeking damages for all addicted smokers and former smokers, and injunctive relief. In 2004, the trial court found defendants liable without hearing evidence and awarded “moral damages” of R$1,000 (approximately $293 ) 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 Supreme Court of Justice denied plaintiff's appeal. In March 2017, plaintiff filed an en banc appeal to the Supreme Court of Justice. In addition, the defendants filed a constitutional appeal to the Federal Supreme Tribunal on the basis that plaintiff did not have standing to bring the lawsuit. Both appeals are still pending. In the second class action pending in Brazil , Public Prosecutor of São Paulo v. Philip Morris Brasil Industria e Comercio Ltda., Civil Court of the City of São Paulo, Brazil, filed August 6, 2007, our subsidiary is a defendant. The plaintiff, the Public Prosecutor of the State of São Paulo, is seeking (i) damages on behalf of all smokers nationwide, former smokers, and their relatives; (ii) damages on behalf of people exposed to environmental tobacco smoke nationwide, and their relatives; and (iii) reimbursement of the health care costs allegedly incurred for the treatment of tobacco-related diseases by all Brazilian States and Municipalities, and the Federal District. In an interim ruling issued in December 2007, the trial court limited the scope of this claim to the State of São Paulo only. In December 2008, the Seventh Civil Court of São Paulo issued a decision declaring that it lacked jurisdiction because the case involved issues similar to the ADESF case discussed above and should be transferred to the Nineteenth Lower Civil Court in São Paulo where the ADESF case is pending. The court further stated that these cases should be consolidated for the purposes of judgment. In April 2010, the São Paulo Court of Appeals reversed the Seventh Civil Court's decision that consolidated the cases, finding that they are based on different legal claims and are progressing at different stages of proceedings. This case was returned to the Seventh Civil Court of São Paulo, and our subsidiary filed its closing arguments in December 2010. In March 2012, the trial court dismissed the case on the merits. In January 2014, the São Paulo Court of Appeals rejected plaintiff’s appeal and affirmed the trial court decision. In July 2014, plaintiff appealed to the Superior Court of Justice. In the first 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, our subsidiary 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. Trial began in March 2012 and concluded in December 2014. The trial court issued its judgment on May 27, 2015. The trial court found our subsidiary and two other Canadian manufacturers liable and awarded a total of CAD 131 million (approximately $103 million ) in punitive damages, allocating CAD 46 million (approximately $36 million ) to our subsidiary. The trial court found 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. The trial court also found that defendants conspired to prevent consumers from learning the dangers of smoking. The trial court further held that these civil faults were a cause of the class members’ addiction. The trial court rejected other grounds of fault advanced by the class, holding that: (i) the evidence was insufficient to show that defendants marketed to youth, (ii) defendants’ advertising did not convey false information about the characteristics of cigarettes, and (iii) defendants did not commit a fault by using the descriptors light or mild for cigarettes with a lower tar delivery. 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 ordered defendants to pay the full punitive damage award into a trust within 60 days and found that a claims process to allocate the awarded damages to individual class members would be too expensive and difficult to administer. The trial court ordered a briefing on the proposed process for the distribution of sums remaining from the punitive damage award after payment of attorneys’ fees and legal costs. In June 2015, our subsidiary commenced the appellate process by filing its inscription of appeal of the trial court’s judgment with the Court of Appeal of Quebec. Our subsidiary also filed a motion to cancel the trial court’s order for payment into a trust within 60 days notwithstanding appeal. In July 2015, the Court of Appeal granted the motion to cancel and overturned the trial court’s ruling that our subsidiary make the payment into a trust within 60 days . In August 2015, plaintiffs filed a motion with the Court of Appeal seeking security in both the Létourneau case and the Blais case described below. In October 2015, the Court of Appeal granted the motion and ordered our subsidiary to furnish security totaling CAD 226 million (approximately $177 million ), in the form of cash into a court trust or letters of credit, in six equal consecutive quarterly installments of approximately CAD 37.6 million (approximately $29.4 million ) beginning in December 2015 through March 2017. See the Blais description for further detail concerning the security order. The Court of Appeal heard oral arguments on the merits appeal in November 2016. Our subsidiary and PMI believe that the findings of liability and damages were incorrect and should ultimately be set aside on any one of many grounds, including the following: (i) holding that defendants violated Quebec law by failing to warn class members of the risks of smoking even after the court found that class members knew, or should have known, of the risks, (ii) finding that plaintiffs were not required to prove that defendants’ alleged misconduct caused injury to each class member in direct contravention of binding precedent, (iii) creating a factual presumption, without any evidence from class members or otherwise, that defendants’ alleged misconduct caused all smoking by all class members, (iv) holding that the addiction class members’ claims for punitive damages were not time-barred even though the case was filed more than three years after a prominent addiction warning appeared on all packages, and (v) awarding punitive damages to punish defendants without proper consideration as to whether punitive damages were necessary to deter future misconduct. In the second 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, our subsidiary 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. Trial began in March 2012 and concluded in December 2014. The trial court issued its judgment on May 27, 2015. The trial court found our subsidiary 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 $12.1 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 $70,500 ) in punitive damages, allocating CAD 30,000 (approximately $23,500 ) to our subsidiary and found 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. The trial court also found that defendants conspired to prevent consumers from learning the dangers of smoking. The trial court further held that these civil faults were a cause of the class members’ diseases. The trial court rejected other grounds of fault advanced by the class, holding that: (i) the evidence was insufficient to show that defendants marketed to youth, (ii) defendants’ advertising did not convey false information about the characteristics of cigarettes, and (iii) defendants did not commit a fault by using the descriptors light or mild for cigarettes with a lower tar delivery. The trial court estimated the disease class at 99,957 members. The trial court ordered defendants to pay CAD 1 billion (approximately $783 million ) of the compensatory damage award into a trust within 60 days , CAD 200 million (approximately $157 million ) of which is our subsidiary’s portion and ordered briefing on a proposed claims process for the distribution of damages to individual class members and for payment of attorneys’ fees and legal costs. In June 2015, our subsidiary commenced the appellate process by filing its inscription of appeal of the trial court’s judgment with the Court of Appeal of Quebec. Our subsidiary also filed a motion to cancel the trial court’s order for payment into a trust within 60 days notwithstanding appeal. In July 2015, the Court of Appeal granted the motion to cancel and overturned the trial court’s ruling that our subsidiary make an initial payment within 60 days . In August 2015, plaintiffs filed a motion with the Court of Appeal seeking an order that defendants place irrevocable letters of credit totaling CAD 5 billion (approximately $3.91 billion ) into trust, to secure the judgments in both the Létourneau and Blais cases. Plaintiffs subsequently withdrew their motion for security against JTI-MacDonald Corp. and proceeded only against our subsidiary and Imperial Tobacco Canada Ltd. In October 2015, the Court of Appeal granted the motion and ordered our subsidiary to furnish security totaling CAD 226 million (approximately $177 million ) to cover both the Létourneau and Blais cases. Such security may take the form of cash into a court trust or letters of credit, in six equal consecutive quarterly installments of approximately CAD 37.6 million (approximately $29.4 million ) beginning in December 2015 through March 2017. The Court of Appeal ordered Imperial Tobacco Canada Ltd. to furnish security totaling CAD 758 million (approximately $593 million ) in seven equal consecutive quarterly installments of approximately CAD 108 million (approximately $84.6 million ) beginning in December 2015 through June 2017. In March 2017, our subsidiary made its sixth and final quarterly installment of security for approximately CAD 37.6 million (approximately $29.4 million ) into a court trust. This payment is included in other assets on the condensed consolidated balance sheets and in cash used in operating activities in the condensed consolidated statements of cash flows. 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. The Court of Appeal heard oral arguments on the merits appeal in November 2016. Our subsidiary and PMI believe that the findings of liability and damages were incorrect and should ultimately be set aside on any one of many grounds, including the following: (i) holding that defendants violated Quebec law by failing to warn class members of the risks of smoking even after the court found that class members knew, or should have known, of the risks, (ii) finding that plaintiffs were not required to prove that defendants’ alleged misconduct caused injury to each class member in direct contravention of binding precedent, (iii) creating a factual presumption, without any evidence from class members or otherwise, that defendants’ alleged misconduct caused all smoking by all class members, (iv) relying on epidemiological evidence that did not meet recognized scientific standards, and (v) awarding punitive damages to punish defendants without proper consideration as to whether punitive damages were necessary to deter future misconduct. 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, our subsidiaries, 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 September 2009, plaintiff's counsel informed defendants that he did not anticipate taking any action in this case while he pursues the class action filed in Saskatchewan (see description of Adams , below). 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, our subsidiaries, 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. Preliminary motions are pending. 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, our subsidiaries, 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. No activity in this case is anticipated while plaintiff's counsel pursues the class action filed in Saskatchewan (see description of Adams , above). 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, our subsidiaries, 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. No activity in this case is anticipated while plaintiff's counsel pursues the class action filed in Saskatchewan (see description of Adams , above). 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, our subsidiaries, 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, our subsidiaries, 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, our subsidiaries, 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. Plaintiff's counsel has indicated that he does not intend to take any action in this case in the near future. 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 obtain equitable relief because they participated in, and benefited from, the sale of cigarettes), and statute of limitations. As of April 24, 2018 , there were 16 health care cost recovery cases pending against us, our subsidiaries or indemnitees in Canada ( 10 ), Korea ( 1 ) and Nigeria ( 5 ), compared with 16 such cases on April 25, 2017 and 16 such cases on April 22, 2016 . 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 Co |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
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. In December 2017, the Tax Cuts and Jobs Act was signed into law. Accordingly, PMI recorded a provisional charge of $1.6 billion in its 2017 income tax provision, including a charge for the transition tax on accumulated foreign earnings of $1.4 billion and $0.2 billion due to the re-measurement of U.S. deferred tax assets and liabilities using a rate of 21%. PMI is evaluating the assumptions used in the analysis, as well as guidance issued by the U.S. Treasury Department and the Internal Revenue Service and has not made any measurement period adjustments related to these items during the quarter. PMI will complete its analysis during 2018, and any adjustments to the provisional charges will be included in income tax expense or benefit in the appropriate period, in accordance with Staff Accounting Bulletin No. 118 (SAB 118). PMI’s effective tax rates for the three months ended March 31, 2018 and 2017 were 25.5% and 24.9% , respectively. The effective tax rate for the three months ended March 31, 2017 was favorably impacted by the tax benefit of a legal entity restructuring ( $61 million ). In 2018, PMI's effective tax rate is expected to exceed the new U.S. federal statutory rate of 21%. PMI’s higher effective tax rate for the three months ended March 31, 2018 was primarily due to earnings mix by taxing jurisdiction, as well as the expected impact of Global Intangible Low Taxed Income ("GILTI") provisions of the Tax Cuts and Jobs Act, partially offset by the favorable tax treatment of Foreign Derived Intangible Income ("FDII"). Based upon PMI's current interpretation of the Tax Cuts and Jobs Act, PMI estimates that its full-year 2018 effective tax rate will be approximately 26% , subject to future regulatory developments. PMI is continuing to assess the impacts of the Tax Cuts and Jobs Act on the effective tax rate and income tax accounting, in particular the foreign tax credit limitations related to the new GILTI provisions. PMI will complete this assessment during 2018 and will make an accounting policy election on whether to treat GILTI taxes as a current period expense or include these amounts in the measurement of deferred taxes. Based on PMI’s assessment to date, no impact is expected from the Base Erosion and Anti-Abuse Tax ("BEAT") rules. Changes in currency exchange rates or earnings mix by taxing jurisdiction also 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 2013 and onward . Foreign and U.S. state jurisdictions have statutes of limitations generally ranging from three to five years. It is reasonably possible that within the next 12 months certain tax examinations will close, which could result in a change in unrecognized tax benefits along with related interest and penalties. An estimate of any possible change cannot be made at this time. |
Indebtedness
Indebtedness | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Indebtedness | Indebtedness: Short-term Borrowings: PMI's short-term borrowings, consisting of bank loans to certain PMI subsidiaries at March 31, 2018 and December 31, 2017 , had a carrying value of $608 million and $499 million , respectively. The fair value of PMI’s short-term borrowings, based on current market interest rates, approximates carrying value. Long-term Debt: At March 31, 2018 and December 31, 2017 , PMI’s long-term debt consisted of the following: (in millions) March 31, 2018 December 31, 2017 U.S. dollar notes, 1.375% to 6.375% (average interest rate 3.566%), due through 2044 $ 23,294 $ 23,291 Foreign currency obligations: Euro notes, 0.625% to 3.125% (average interest rate 2.250%), due through 2037 9,348 8,997 Swiss franc notes, 0.750% to 2.000% (average interest rate 1.269%), due through 2024 1,418 1,376 Other (average interest rate 3.378%), due through 2024 180 176 34,240 33,840 Less current portion of long-term debt 4,662 2,506 $ 29,578 $ 31,334 Other foreign currency debt above includes mortgage debt in Switzerland and capital lease obligations at March 31, 2018 and December 31, 2017 . Credit Facilities: On January 29, 2018, PMI entered into an agreement to extend the term of its $2.0 billion 364-day revolving credit facility from February 6, 2018, to February 5, 2019. At March 31, 2018 , PMI's total committed credit facilities were as follows: (in billions) Type Committed Credit Facilities 364-day revolving credit, expiring February 5, 2019 $ 2.0 Multi-year revolving credit, expiring February 28, 2021 2.5 Multi-year revolving credit, expiring October 1, 2022 3.5 Total facilities $ 8.0 At March 31, 2018 , there were no borrowings under these committed credit facilities, and the entire committed amounts were available for borrowing. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2018 | |
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. PMI's policy is to reflect transfers between hierarchy levels at the end of the reporting period. Equity Securities The fair value of PMI’s equity securities, which are determined by using quoted prices in active markets, have been classified within Level 1. Derivative Financial Instruments PMI assesses the fair value of its foreign exchange contracts and interest rate contracts using standard valuation models that use, as their basis, readily observable market inputs. The fair value of PMI’s foreign exchange forward contracts is determined by using the prevailing foreign exchange spot rates and interest rate differentials, and the respective maturity dates of the instruments. The fair value of PMI’s currency options is determined by using a Black-Scholes methodology based on foreign exchange spot rates and interest rate differentials, currency volatilities and maturity dates. PMI’s derivative financial instruments have been classified within Level 2 in the table shown below. See Note 5. Financial Instruments for additional discussion of derivative financial instruments. Debt The fair value of PMI’s outstanding debt, which is utilized solely for disclosure purposes, is determined using quotes and market interest rates currently available to PMI for issuances of debt with similar terms and remaining maturities. The aggregate carrying value of PMI’s debt, excluding short-term borrowings and $27 million of capital lease obligations, was $34,213 million at March 31, 2018 . The fair value of PMI’s outstanding debt, excluding the aforementioned short-term borrowings and capital lease obligations, was classified within Level 1 and Level 2 in the table shown below. The aggregate fair values of PMI’s equity securities, derivative financial instruments and debt as of March 31, 2018 , were as follows: (in millions) Fair Value at March 31, 2018 Quoted Prices Significant Significant Assets: Equity securities $ 272 $ 272 $ — $ — Foreign exchange contracts 114 — 114 — Total assets $ 386 $ 272 $ 114 $ — Liabilities: Debt $ 35,464 $ 35,293 $ 171 $ — Foreign exchange contracts 1,757 — 1,757 — Total liabilities $ 37,221 $ 35,293 $ 1,928 $ — |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Losses | 3 Months Ended |
Mar. 31, 2018 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Losses | Accumulated Other Comprehensive Losses: PMI’s accumulated other comprehensive losses, net of taxes, consisted of the following: (in millions) At March 31, 2018 At December 31, 2017 At March 31, 2017 Currency translation adjustments $ (6,097 ) $ (5,761 ) $ (5,783 ) Pension and other benefits (2,766 ) (2,816 ) (3,509 ) Derivatives accounted for as hedges (20 ) 42 27 Total accumulated other comprehensive losses $ (8,883 ) $ (8,535 ) $ (9,265 ) 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 are shown on the condensed consolidated statements of comprehensive earnings for the three months ended March 31, 2018 and 2017 . For additional information, see Note 3. Benefit Plans and Note 5. Financial Instruments for disclosures related to PMI's pension and other benefits, and derivative financial instruments, respectively. |
Balance Sheet Offsetting
Balance Sheet Offsetting | 3 Months Ended |
Mar. 31, 2018 | |
Offsetting [Abstract] | |
Balance Sheet Offsetting | Balance Sheet Offsetting: Derivative Financial Instruments PMI uses foreign exchange contracts and interest rate contracts to mitigate its exposure to changes in exchange and interest rates from third-party and intercompany actual and forecasted transactions. Substantially all of PMI's derivative financial instruments are subject to master netting arrangements, whereby the right to offset occurs in the event of default by a participating party. While these contracts contain the enforceable right to offset through close-out netting rights, PMI elects to present them on a gross basis in the condensed consolidated balance sheets. Collateral associated with these arrangements is in the form of cash and is unrestricted. See Note 5. Financial Instruments for disclosures related to PMI's derivative financial instruments. The effects of these derivative financial instrument assets and liabilities on PMI's condensed consolidated balance sheets were as follows: (in millions) Gross Amounts Recognized Gross Amount Offset in the Condensed Consolidated Balance Sheet Net Amounts Presented in the Condensed Consolidated Balance Sheet Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet Financial Instruments Cash Collateral Received/Pledged Net Amount At March 31, 2018 Assets Foreign exchange contracts $ 114 $ — $ 114 $ (25 ) $ (68 ) $ 21 Liabilities Foreign exchange contracts $ 1,757 $ — $ 1,757 $ (25 ) $ (1,719 ) $ 13 At December 31, 2017 Assets Foreign exchange contracts $ 140 $ — $ 140 $ (50 ) $ (78 ) $ 12 Liabilities Foreign exchange contracts $ 1,128 $ — $ 1,128 $ (50 ) $ (1,004 ) $ 74 |
Investments in Unconsolidated S
Investments in Unconsolidated Subsidiaries | 3 Months Ended |
Mar. 31, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments in Unconsolidated Subsidiaries | Investments in Unconsolidated Subsidiaries: At March 31, 2018 and December 31, 2017 , PMI had total investments in unconsolidated subsidiaries of $1,098 million and $1,074 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 and movements in currency translation adjustments. The carrying value of our equity method investments at March 31, 2018 and December 31, 2017 exceeded our share of the unconsolidated subsidiaries' book value by $932 million and $927 million , respectively. The difference between the investment carrying value and the amount of underlying equity in net assets, excluding $879 million and $873 million attributable to goodwill as of March 31, 2018 and December 31, 2017 , respectively, is being amortized on a straight-line basis over the underlying assets' estimated useful lives of 10 to 20 years . At March 31, 2018 and December 31, 2017 , PMI received year-to-date dividends from unconsolidated subsidiaries of $10 million and $120 million , respectively. PMI holds a 49% equity interest in United Arab Emirates-based Emirati Investors-TA (FZC) (“EITA”). PMI holds an approximate 25% economic interest in Société des Tabacs Algéro-Emiratie (“STAEM”), an Algerian joint venture that is 51% owned by EITA and 49% by the Algerian state-owned enterprise Management et Développement des Actifs et des Ressources Holding (MADAR Holding), formerly known as Société Nationale des Tabacs et Allumettes SpA. STAEM manufactures and distributes under license some of PMI’s brands. PMI holds a 23% equity interest in Megapolis Distribution BV, the holding company of CJSC TK Megapolis, PMI's distributor in Russia. The initial investments in EITA and Megapolis Distribution BV were recorded at cost and are included in investments in unconsolidated subsidiaries and equity securities on the condensed consolidated balance sheets. PMI’s earnings activity from unconsolidated subsidiaries was as follows: For the Three Months Ended March 31, (in millions) 2018 2017 Net revenues $ 923 $ 840 PMI’s balance sheet activity related to unconsolidated subsidiaries was as follows: (in millions) At March 31, 2018 At December 31, 2017 Receivables $ 471 $ 293 The activity primarily related to agreements with PMI’s unconsolidated subsidiaries within the Eastern Europe segment and the Middle East & Africa segment. These agreements, which are in the ordinary course of business, are primarily for distribution, contract manufacturing and licenses. PMI eliminated its respective share of all significant intercompany transactions with the equity method investees. |
Sale of Accounts Receivable
Sale of Accounts Receivable | 3 Months Ended |
Mar. 31, 2018 | |
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 March 31, 2018 and March 31, 2017 . 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 three months ended March 31, 2018 and 2017 , were $2,509 million and $2,092 million , 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 March 31, 2018 and March 31, 2017 , were $878 million , and $561 million , 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 three months ended March 31, 2018 and 2017 , the loss on sale of trade receivables was immaterial. |
Product Warranty
Product Warranty | 3 Months Ended |
Mar. 31, 2018 | |
Guarantees and Product Warranties [Abstract] | |
Product Warranty | Product Warranty: PMI's IQOS devices are subject to standard product warranties generally for a period of 12 months from the date of purchase or such other periods as required by law. PMI generally provides in cost of sales for the estimated cost of warranty in the period the related revenue is recognized. PMI assesses the adequacy of its accrued product warranties and adjusts the amounts as necessary based on actual experience and changes in future estimates. Factors that affect product warranties may vary across markets but typically include product failure rates, logistics and service delivery costs, and warranty policies. PMI accounts for its product warranties within other accrued liabilities. At March 31, 2018 and December 31, 2017 , these amounts were as follows: For the Three Months Ended For the Year Ended (in millions) March 31, 2018 December 31, 2017 Balance at beginning of period $ 71 $ 51 Changes due to: Warranties issued 76 168 Settlements (54 ) (148 ) Currency 1 — Balance at end of period $ 94 $ 71 |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions: On March 21, 2018, PMI acquired the remaining 49% interest in Tabacalera Costarricense, S.A. and Mendiola y Compañía, S.A. for a net purchase price of $95 million , which includes $2 million of contingent consideration. As a result, PMI now owns 100% of these Costa Rican affiliates. The purchase of the remaining 49% interest resulted in a decrease to PMI’s additional paid-in capital of $86 million . |
New Accounting Standards
New Accounting Standards | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
New Accounting Standards | New Accounting Standards: Recently adopted On January 1, 2018, PMI adopted Financial Accounting Standards Update ASU 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”). ASU 2014-09 contains principles that an entity will need to apply to determine the measurement of revenue and timing of when it is recognized. The underlying principle is that an entity will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for these goods or services. PMI adopted ASU 2014-09 retrospectively to each prior period presented. PMI elected this transition method solely to reflect the change in excise tax presentation in all prior periods presented resulting from PMI’s accounting policy election to exclude excise taxes collected from customers from the measurement of the transaction price, thereby presenting revenues, net of excise taxes. Based on PMI’s assessment, the underlying principles of the new standard, relating to the measurement of revenue and the timing of recognition, are closely aligned with PMI’s current business model and practices. As a result, the adoption of ASU 2014-09 did not have a material impact on the consolidated financial position or results of operations. The adoption of ASU 2014-09 resulted in the following change for net revenues to reflect the net presentation for revenues, excluding excise taxes, for the three months ended March 31, 2017 : (in millions) For the Three Months Ended March 31, 2017 Net Revenues: As reported Retrospective Adoption Net revenues Excises taxes Net revenues $ 16,556 $ 10,492 $ 6,064 The change in presentation of net revenues also impacts segment disclosure requirements, primarily information for significant customers and geographic areas. While there is no change in the underlying business or customers, the amounts used to calculate what is disclosed are different following the change in presentation of revenues net of excise taxes and the associated segment revenues. Prior to this change, revenues including excise taxes were the basis for determining if sales to a customer or in a foreign country met the thresholds for disclosure. On the basis of revenues including excise taxes and due to the fact that PMI is not responsible for collecting excise taxes in certain markets, no customers met the requirements for disclosure. On this basis, net revenues attributable to customers located in PMI’s largest markets in terms of net revenues, namely Indonesia ( $8.0 billion and $7.7 billion in 2017 and 2016, respectively) and Germany ( $7.2 billion and $7.1 billion in 2017 and 2016, respectively) were included as part of segment disclosures. Following the change in presentation and using net revenues excluding excise taxes as the basis for determining the disclosures, PMI had one customer in the East Asia & Australia segment ( 16% and 11% of PMI’s consolidated net revenues in 2017 and 2016, respectively) and one customer in the European Union segment ( 10% and 11% of PMI’s consolidated net revenues in 2017 and 2016, respectively) that meet the requirements for disclosure. Additionally, on this basis, the only foreign countries meeting the disclosure requirements are PMI’s markets in Japan ( $4.7 billion and $2.8 billion in 2017 and 2016, respectively) and Indonesia ( $3.2 billion and $3.2 billion in 2017 and 2016, respectively). PMI disaggregates its net revenue from contracts with customers by both geographic location and product category for each of PMI's six reportable segments, as PMI believes this best depicts how the nature, amount, timing and uncertainty of its revenue and cash flows are affected by economic factors. For further details, see Note 7. Segment Reporting . PMI recognizes revenue primarily through the manufacture and sale of cigarettes and other nicotine-containing products, including reduced-risk products. The majority of PMI revenues are generated by sales through direct and indirect distribution networks with short-term payment conditions and where control is typically transferred to the customer either upon shipment or delivery of goods. PMI evaluates the transfer of control through evidence of the customer’s receipt and acceptance, transfer of title, PMI’s right to payment for those products and the customer’s ability to direct the use of those products upon receipt. Typically, PMI’s performance obligations are satisfied and revenue is recognized either upon shipment or delivery of goods. In certain instances, PMI facilitates shipping and handling activities after control has transferred to the customer. PMI has elected to record all shipping and handling activities as costs to fulfill a contract and such costs, which have not been incurred at the time revenue is recognized, are accrued. For the three months ended March 31, 2018 and 2017, PMI did not have any material contract assets or contract liabilities. For further details on PMI’s performance obligations see Note 16. Product Warranty . On January 1, 2018, PMI adopted Financial Accounting Standard Update ASU 2016-01, “Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”), on a prospective basis. ASU 2016-01 requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. Additionally, ASU 2016-01 also changed certain disclosure requirements and other aspects of current U.S. GAAP. PMI identified certain cost investments, which are applicable to ASU 2016-01 requiring them to be measured at fair value with the changes in fair value recognized in net income. At January 1, 2018, the cumulative effect of this change resulted in an increase to investments in unconsolidated subsidiaries and equity securities, deferred income tax liability and earnings reinvested in the business of $301 million , $63 million and $238 million , respectively. Recently issued On February 25, 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ASU 2016-02, “Leases” (“ASU 2016-02”). ASU 2016-02 requires organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. Additionally, ASU 2016-02 modifies current guidance for lessors' accounting. ASU 2016-02 is effective for interim and annual reporting periods beginning on or after January 1, 2019, with early adoption permitted. PMI has identified its lease management system to be used upon adoption and is in the process of identifying and evaluating the applicable leases. PMI is currently assessing the impact that the adoption of ASU 2016-02 will have on its financial position and results of operations. |
New Accounting Standards (Polic
New Accounting Standards (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
New Accounting Standards | New Accounting Standards: Recently adopted On January 1, 2018, PMI adopted Financial Accounting Standards Update ASU 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”). ASU 2014-09 contains principles that an entity will need to apply to determine the measurement of revenue and timing of when it is recognized. The underlying principle is that an entity will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for these goods or services. PMI adopted ASU 2014-09 retrospectively to each prior period presented. PMI elected this transition method solely to reflect the change in excise tax presentation in all prior periods presented resulting from PMI’s accounting policy election to exclude excise taxes collected from customers from the measurement of the transaction price, thereby presenting revenues, net of excise taxes. Based on PMI’s assessment, the underlying principles of the new standard, relating to the measurement of revenue and the timing of recognition, are closely aligned with PMI’s current business model and practices. As a result, the adoption of ASU 2014-09 did not have a material impact on the consolidated financial position or results of operations. The adoption of ASU 2014-09 resulted in the following change for net revenues to reflect the net presentation for revenues, excluding excise taxes, for the three months ended March 31, 2017 : (in millions) For the Three Months Ended March 31, 2017 Net Revenues: As reported Retrospective Adoption Net revenues Excises taxes Net revenues $ 16,556 $ 10,492 $ 6,064 The change in presentation of net revenues also impacts segment disclosure requirements, primarily information for significant customers and geographic areas. While there is no change in the underlying business or customers, the amounts used to calculate what is disclosed are different following the change in presentation of revenues net of excise taxes and the associated segment revenues. Prior to this change, revenues including excise taxes were the basis for determining if sales to a customer or in a foreign country met the thresholds for disclosure. On the basis of revenues including excise taxes and due to the fact that PMI is not responsible for collecting excise taxes in certain markets, no customers met the requirements for disclosure. On this basis, net revenues attributable to customers located in PMI’s largest markets in terms of net revenues, namely Indonesia ( $8.0 billion and $7.7 billion in 2017 and 2016, respectively) and Germany ( $7.2 billion and $7.1 billion in 2017 and 2016, respectively) were included as part of segment disclosures. Following the change in presentation and using net revenues excluding excise taxes as the basis for determining the disclosures, PMI had one customer in the East Asia & Australia segment ( 16% and 11% of PMI’s consolidated net revenues in 2017 and 2016, respectively) and one customer in the European Union segment ( 10% and 11% of PMI’s consolidated net revenues in 2017 and 2016, respectively) that meet the requirements for disclosure. Additionally, on this basis, the only foreign countries meeting the disclosure requirements are PMI’s markets in Japan ( $4.7 billion and $2.8 billion in 2017 and 2016, respectively) and Indonesia ( $3.2 billion and $3.2 billion in 2017 and 2016, respectively). PMI disaggregates its net revenue from contracts with customers by both geographic location and product category for each of PMI's six reportable segments, as PMI believes this best depicts how the nature, amount, timing and uncertainty of its revenue and cash flows are affected by economic factors. For further details, see Note 7. Segment Reporting . PMI recognizes revenue primarily through the manufacture and sale of cigarettes and other nicotine-containing products, including reduced-risk products. The majority of PMI revenues are generated by sales through direct and indirect distribution networks with short-term payment conditions and where control is typically transferred to the customer either upon shipment or delivery of goods. PMI evaluates the transfer of control through evidence of the customer’s receipt and acceptance, transfer of title, PMI’s right to payment for those products and the customer’s ability to direct the use of those products upon receipt. Typically, PMI’s performance obligations are satisfied and revenue is recognized either upon shipment or delivery of goods. In certain instances, PMI facilitates shipping and handling activities after control has transferred to the customer. PMI has elected to record all shipping and handling activities as costs to fulfill a contract and such costs, which have not been incurred at the time revenue is recognized, are accrued. For the three months ended March 31, 2018 and 2017, PMI did not have any material contract assets or contract liabilities. For further details on PMI’s performance obligations see Note 16. Product Warranty . On January 1, 2018, PMI adopted Financial Accounting Standard Update ASU 2016-01, “Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”), on a prospective basis. ASU 2016-01 requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. Additionally, ASU 2016-01 also changed certain disclosure requirements and other aspects of current U.S. GAAP. PMI identified certain cost investments, which are applicable to ASU 2016-01 requiring them to be measured at fair value with the changes in fair value recognized in net income. At January 1, 2018, the cumulative effect of this change resulted in an increase to investments in unconsolidated subsidiaries and equity securities, deferred income tax liability and earnings reinvested in the business of $301 million , $63 million and $238 million , respectively. Recently issued On February 25, 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ASU 2016-02, “Leases” (“ASU 2016-02”). ASU 2016-02 requires organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. Additionally, ASU 2016-02 modifies current guidance for lessors' accounting. ASU 2016-02 is effective for interim and annual reporting periods beginning on or after January 1, 2019, with early adoption permitted. PMI has identified its lease management system to be used upon adoption and is in the process of identifying and evaluating the applicable leases. PMI is currently assessing the impact that the adoption of ASU 2016-02 will have on its financial position and results of operations. |
Stock Plans (Tables)
Stock Plans (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of weighted average grant date fair value and compensation expense related to share-based awards | During the three months ended March 31, 2018 and 2017 , shares granted to eligible employees, the weighted-average grant date fair value per share and the recorded compensation expense related to RSU awards were as follows: Number of Shares Granted Weighted-Average Grant Date Fair Value Per RSU Award Granted Compensation Expense Related to RSU Awards (in millions) 2018 1,249,650 $ 100.70 $ 38 2017 1,202,060 $ 98.47 $ 35 During the three months ended March 31, 2018 and 2017 , shares granted to eligible employees, the grant date fair value per share and the recorded compensation expense related to PSU awards were as follows: Number of Shares Granted PSU Grant Date Fair Value Subject to TSR Performance Factor Per Share (a) PSU Grant Date Fair Value Subject to Other Performance Factors Per Share (b) Compensation Expense Related to PSU Awards (in millions) 2018 401,500 $ 118.98 $ 100.69 $ 21 2017 393,460 $ 128.72 $ 98.29 $ 17 (a) 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. (b) 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 grant. |
Benefit Plans (Tables)
Benefit Plans (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Retirement Benefits [Abstract] | |
Components of Net Periodic Benefit Cost | Net periodic pension cost consisted of the following: Pension (1) For the Three Months Ended March 31, (in millions) 2018 2017 Service cost $ 53 $ 51 Interest cost 28 26 Expected return on plan assets (87 ) (79 ) Amortization: Net loss 43 44 Prior service cost — 3 Net periodic pension cost $ 37 $ 45 (1) Primarily non-U.S. based defined benefit retirement plans. |
Goodwill and Other Intangible32
Goodwill and Other Intangible Assets, net (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill and Intangible Assets, Net, by Segment or Major Class | Goodwill and other intangible assets, net, by segment were as follows: Goodwill Other Intangible Assets, net (in millions) March 31, December 31, March 31, December 31, European Union $ 1,474 $ 1,419 $ 439 $ 458 Eastern Europe 334 321 22 16 Middle East & Africa 107 102 185 178 South & Southeast Asia 2,938 3,010 987 1,004 East Asia & Australia 561 567 59 44 Latin America & Canada 2,253 2,247 763 732 Total $ 7,667 $ 7,666 $ 2,455 $ 2,432 Additional details of other intangible assets were as follows: March 31, 2018 December 31, 2017 (in millions) Gross Accumulated Gross Accumulated Non-amortizable intangible assets $ 1,341 $ 1,323 Amortizable intangible assets 1,818 $ 704 1,798 $ 689 Total other intangible assets $ 3,159 $ 704 $ 3,121 $ 689 |
Movements in Goodwill | The movements in goodwill from December 31, 2017 , 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, 2017 $ 1,419 $ 321 $ 102 $ 3,010 $ 567 $ 2,247 $ 7,666 Changes due to: Currency 55 13 5 (72 ) (6 ) 6 1 Balances, March 31, 2018 $ 1,474 $ 334 $ 107 $ 2,938 $ 561 $ 2,253 $ 7,667 |
Gross Carrying Amount, Range of Useful Lives and Weighted-Average Remaining Useful Life of Amortizable Intangible Assets | The gross carrying amount, the range of useful lives as well as the weighted-average remaining useful life of amortizable intangible assets at March 31, 2018 , were as follows: (dollars in millions) Gross Carrying Amount Initial Estimated Weighted-Average Trademarks $ 1,555 2 - 40 years 19 years Distribution networks 151 5 - 30 years 9 years Other (including farmer contracts 112 4 - 17 years 11 years $ 1,818 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair Value of Foreign Exchange Contracts | The fair value of PMI’s foreign exchange contracts included in the condensed consolidated balance sheets as of March 31, 2018 and December 31, 2017 , were as follows: Derivative Assets Derivative Liabilities Fair Value Fair Value (in millions) Balance Sheet Classification At March 31, 2018 At December 31, 2017 Balance Sheet Classification At March 31, 2018 At December 31, 2017 Foreign exchange contracts designated as hedging instruments Other current assets $ 48 $ 84 Other accrued liabilities $ 433 $ 197 Other assets 6 34 Other liabilities 1,237 880 Foreign exchange contracts not designated as hedging instruments Other current assets 60 22 Other accrued liabilities 20 37 Other assets — — Other liabilities 67 14 Total derivatives $ 114 $ 140 $ 1,757 $ 1,128 |
Cash Flow and Net Investment Hedging Activities Effect on Condensed Consolidated Statements of Earnings and Other Comprehensive Earnings | For the three months ended March 31, 2018 and 2017 , 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 Three Months Ended March 31, Amount of Gain/(Loss) Recognized in Other Comprehensive Earnings/(Losses) on Derivatives Statement of Earnings Classification of Gain/(Loss) Reclassified from Other Comprehensive Earnings/(Losses) into Earnings Amount of Gain/(Loss) Reclassified from Other Comprehensive Earnings/(Losses) into Earnings 2018 2017 2018 2017 Derivatives in Cash Flow Hedging Relationship Foreign exchange contracts $ (74 ) $ (86 ) Net revenues $ (9 ) $ 9 Cost of sales — — Marketing, administration and research costs 8 (9 ) Interest expense, net (2 ) (3 ) Derivatives in Net Investment Hedging Relationship Foreign exchange contracts (608 ) (249 ) Total $ (682 ) $ (335 ) $ (3 ) $ (3 ) |
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 Three Months Ended March 31, 2018 2017 Gain as of January 1, $ 42 $ 97 Derivative (gains)/losses transferred to earnings 2 5 Change in fair value (64 ) (75 ) Gain/(loss) as of March 31, $ (20 ) $ 27 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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 Three Months Ended March 31, 2018 2017 Net earnings attributable to PMI $ 1,556 $ 1,590 Less distributed and undistributed earnings attributable to share-based payment awards 3 3 Net earnings for basic and diluted EPS $ 1,553 $ 1,587 Weighted-average shares for basic EPS 1,553 1,552 Plus contingently issuable performance stock units (PSUs) 1 1 Weighted-average shares for diluted EPS 1,554 1,553 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Data | Segment data were as follows: (in millions) For the Three Months Ended March 31, 2018 2017 Net revenues: European Union $ 1,988 $ 1,740 Eastern Europe 567 516 Middle East & Africa 961 961 South & Southeast Asia 1,081 1,031 East Asia & Australia 1,591 1,210 Latin America & Canada 708 606 Net revenues $ 6,896 $ 6,064 Operating income: European Union $ 740 $ 748 Eastern Europe 151 159 Middle East & Africa 374 491 South & Southeast Asia 429 370 East Asia & Australia 515 472 Latin America & Canada 217 176 Operating income $ 2,426 $ 2,416 PMI's net revenues by product category were as follows: (in millions) For the Three Months Ended March 31, 2018 2017 Net revenues: Combustible products: European Union $ 1,836 $ 1,709 Eastern Europe 527 513 Middle East & Africa 884 957 South & Southeast Asia 1,081 1,031 East Asia & Australia 737 813 Latin America & Canada 704 605 Total combustible products $ 5,769 $ 5,629 Reduced-risk products: European Union $ 152 $ 31 Eastern Europe 40 3 Middle East & Africa 77 4 South & Southeast Asia — — East Asia & Australia 854 396 Latin America & Canada 4 — Total reduced-risk products $ 1,127 $ 435 Total PMI net revenues $ 6,896 $ 6,064 |
Contingencies (Tables)
Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Tobacco Related Cases Pending Against Company | The table below lists the number of tobacco-related cases pending against us and/or our subsidiaries or indemnitees as of April 24, 2018 , April 25, 2017 and April 22, 2016 : Type of Case Number of Cases Pending as of April 24, 2018 Number of Cases Pending as of April 25, 2017 Number of Cases Pending as of April 22, 2016 Individual Smoking and Health Cases 62 63 66 Smoking and Health Class Actions 11 11 11 Health Care Cost Recovery Actions 16 16 16 Label-Related Class Actions 1 — — Individual Label-Related Cases 1 1 3 Public Civil Actions 2 2 3 |
Schedule Of Verdicts And Post Trial Developments Where a Verdict was Returned In Favor of the Plaintiff(s) | The table below lists the verdict and significant post-trial developments in the four pending cases where a verdict was returned in favor of the plaintiff: Date Location of Type of Verdict Post-Trial February 2004 Brazil/The Smoker Health Defense Association Class Action The Civil Court of São Paulo found defendants liable without hearing evidence. In April 2004, the court awarded “moral damages” of R$1,000 (approximately $293) per smoker per full year of smoking plus interest at the rate of 1% per month, as of the date of the ruling. The court did not assess actual damages, which were to be assessed in a second phase of the case. The size of the class was not defined in the ruling. Defendants appealed to the São Paulo Court of Appeals, which annulled the ruling in November 2008, finding that the trial court had inappropriately ruled without hearing evidence and returned the case to the trial court for further proceedings. In May 2011, the trial court dismissed the claim. Plaintiff appealed the decision. In February 2015, the appellate court unanimously dismissed plaintiff's appeal. In September 2015, plaintiff appealed to the Superior Court of Justice. In addition, the defendants filed a constitutional appeal to the Federal Supreme Tribunal on the basis that plaintiff did not have standing to bring the lawsuit. This appeal is still pending. 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 $103 million) in punitive damages, allocating CAD 46 million (approximately $36 million) to our subsidiary. 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, our subsidiary commenced the appellate process with the Court of Appeal of Quebec. Our subsidiary also filed a motion to cancel the trial court’s order for payment into a trust notwithstanding appeal. In July 2015, the Court of Appeal granted the motion to cancel and overturned the trial court’s ruling that our subsidiary make the payment into a trust. In August 2015, plaintiffs filed a motion for security with the Court of Appeal covering both the Létourneau case and the Blais case described below. In October 2015, the Court of Appeal granted the motion and ordered our subsidiary to furnish security totaling CAD 226 million (approximately $177 million) to cover both the Létourneau and Blais cases. The hearing for the merits appeal took place in November 2016. (See below for further detail.) 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 $12.1 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 $70,500) in punitive damages, allocating CAD 30,000 (approximately $23,500) to our subsidiary. The trial court ordered defendants to pay CAD 1 billion (approximately $783 million) of the compensatory damage award, CAD 200 million (approximately $157 million) of which is our subsidiary’s portion, into a trust within 60 days. In June 2015, our subsidiary commenced the appellate process with the Court of Appeal of Quebec. Our subsidiary also filed a motion to cancel the trial court’s order for payment into a trust notwithstanding appeal. In July 2015, the Court of Appeal granted the motion to cancel and overturned the trial court’s ruling that our subsidiary make the payment into a trust. In August 2015, plaintiffs filed a motion for security with the Court of Appeal. In October 2015, the Court of Appeal granted the motion and ordered our subsidiary to furnish security totaling, together with the Létourneau case, CAD 226 million (approximately $177 million). The hearing for the merits appeal took place in November 2016. (See below 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 $5,446), 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) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | At March 31, 2018 and December 31, 2017 , PMI’s long-term debt consisted of the following: (in millions) March 31, 2018 December 31, 2017 U.S. dollar notes, 1.375% to 6.375% (average interest rate 3.566%), due through 2044 $ 23,294 $ 23,291 Foreign currency obligations: Euro notes, 0.625% to 3.125% (average interest rate 2.250%), due through 2037 9,348 8,997 Swiss franc notes, 0.750% to 2.000% (average interest rate 1.269%), due through 2024 1,418 1,376 Other (average interest rate 3.378%), due through 2024 180 176 34,240 33,840 Less current portion of long-term debt 4,662 2,506 $ 29,578 $ 31,334 |
Schedule of Committed Credit Facilities | At March 31, 2018 , PMI's total committed credit facilities were as follows: (in billions) Type Committed Credit Facilities 364-day revolving credit, expiring February 5, 2019 $ 2.0 Multi-year revolving credit, expiring February 28, 2021 2.5 Multi-year revolving credit, expiring October 1, 2022 3.5 Total facilities $ 8.0 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Aggregate Fair Values of Equity Securities, Derivative Financial Instruments and Debt | The aggregate fair values of PMI’s equity securities, derivative financial instruments and debt as of March 31, 2018 , were as follows: (in millions) Fair Value at March 31, 2018 Quoted Prices Significant Significant Assets: Equity securities $ 272 $ 272 $ — $ — Foreign exchange contracts 114 — 114 — Total assets $ 386 $ 272 $ 114 $ — Liabilities: Debt $ 35,464 $ 35,293 $ 171 $ — Foreign exchange contracts 1,757 — 1,757 — Total liabilities $ 37,221 $ 35,293 $ 1,928 $ — |
Accumulated Other Comprehensi39
Accumulated Other Comprehensive Losses (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Components of Accumulated Other Comprehensive Earnings (Losses), Net of Taxes | PMI’s accumulated other comprehensive losses, net of taxes, consisted of the following: (in millions) At March 31, 2018 At December 31, 2017 At March 31, 2017 Currency translation adjustments $ (6,097 ) $ (5,761 ) $ (5,783 ) Pension and other benefits (2,766 ) (2,816 ) (3,509 ) Derivatives accounted for as hedges (20 ) 42 27 Total accumulated other comprehensive losses $ (8,883 ) $ (8,535 ) $ (9,265 ) |
Balance Sheet Offsetting (Table
Balance Sheet Offsetting (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Offsetting [Abstract] | |
Offsetting Assets | The effects of these derivative financial instrument assets and liabilities on PMI's condensed consolidated balance sheets were as follows: (in millions) Gross Amounts Recognized Gross Amount Offset in the Condensed Consolidated Balance Sheet Net Amounts Presented in the Condensed Consolidated Balance Sheet Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet Financial Instruments Cash Collateral Received/Pledged Net Amount At March 31, 2018 Assets Foreign exchange contracts $ 114 $ — $ 114 $ (25 ) $ (68 ) $ 21 Liabilities Foreign exchange contracts $ 1,757 $ — $ 1,757 $ (25 ) $ (1,719 ) $ 13 At December 31, 2017 Assets Foreign exchange contracts $ 140 $ — $ 140 $ (50 ) $ (78 ) $ 12 Liabilities Foreign exchange contracts $ 1,128 $ — $ 1,128 $ (50 ) $ (1,004 ) $ 74 |
Offsetting Liabilities | The effects of these derivative financial instrument assets and liabilities on PMI's condensed consolidated balance sheets were as follows: (in millions) Gross Amounts Recognized Gross Amount Offset in the Condensed Consolidated Balance Sheet Net Amounts Presented in the Condensed Consolidated Balance Sheet Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet Financial Instruments Cash Collateral Received/Pledged Net Amount At March 31, 2018 Assets Foreign exchange contracts $ 114 $ — $ 114 $ (25 ) $ (68 ) $ 21 Liabilities Foreign exchange contracts $ 1,757 $ — $ 1,757 $ (25 ) $ (1,719 ) $ 13 At December 31, 2017 Assets Foreign exchange contracts $ 140 $ — $ 140 $ (50 ) $ (78 ) $ 12 Liabilities Foreign exchange contracts $ 1,128 $ — $ 1,128 $ (50 ) $ (1,004 ) $ 74 |
Investments in Unconsolidated41
Investments in Unconsolidated Subsidiaries (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Earnings and Balance Sheet Activities with Unconsolidated Subsidiaries | PMI’s earnings activity from unconsolidated subsidiaries was as follows: For the Three Months Ended March 31, (in millions) 2018 2017 Net revenues $ 923 $ 840 PMI’s balance sheet activity related to unconsolidated subsidiaries was as follows: (in millions) At March 31, 2018 At December 31, 2017 Receivables $ 471 $ 293 |
Product Warranty (Tables)
Product Warranty (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Guarantees and Product Warranties [Abstract] | |
Schedule of Accrued Product Warranties | At March 31, 2018 and December 31, 2017 , these amounts were as follows: For the Three Months Ended For the Year Ended (in millions) March 31, 2018 December 31, 2017 Balance at beginning of period $ 71 $ 51 Changes due to: Warranties issued 76 168 Settlements (54 ) (148 ) Currency 1 — Balance at end of period $ 94 $ 71 |
New Accounting Standards (Table
New Accounting Standards (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The adoption of ASU 2014-09 resulted in the following change for net revenues to reflect the net presentation for revenues, excluding excise taxes, for the three months ended March 31, 2017 : (in millions) For the Three Months Ended March 31, 2017 Net Revenues: As reported Retrospective Adoption Net revenues Excises taxes Net revenues $ 16,556 $ 10,492 $ 6,064 |
Background and Basis of Prese44
Background and Basis of Presentation (Details) | 3 Months Ended |
Mar. 31, 2018segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 6 |
Stock Plans (Narrative) (Detail
Stock Plans (Narrative) (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2018USD ($)performance_metricyearshares | May 31, 2017shares | |
Restricted Stock Units (RSUs) [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation cost related to non-vested stock awards | $ | $ 196 | |
Award requisite service period | 3 years | |
Minimum Retirement Age | year | 58 | |
Stock awards vested during period (in shares) | 1,378,550 | |
Restricted Stock Units (RSUs) [Member] | Grant Date Fair Value [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Fair value of vested stock awards | $ | $ 114 | |
Restricted Stock Units (RSUs) [Member] | Total Fair Value [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Fair value of vested stock awards | $ | 143 | |
Performance Shares [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation cost related to non-vested stock awards | $ | $ 57 | |
Minimum Retirement Age | year | 58 | |
Stock awards vested during period (in shares) | 0 | |
Performance period | 3 years | |
Number of performance metrics used to determine the percentage of PSU's that will vest | performance_metric | 3 | |
Aggregate weighted performance factor that determines if the target number of PSUs will vest | 100.00% | |
The number of shares of common stock issue for each vested PSU | 1 | |
Performance Shares [Member] | Performance Metric, Total Shareholder Return [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance metric weight | 50.00% | |
Performance Shares [Member] | Performance Metric, Currency-Neutral Compound Annual Adjusted Operating Income Growth Rate, Excluding Acquisitions [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance metric weight | 30.00% | |
Performance Shares [Member] | Performance Metric, Performance Against Specific Measures Of Transformation [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance metric weight | 20.00% | |
Performance Shares [Member] | Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting percentage | 0.00% | |
Performance Shares [Member] | Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting percentage | 200.00% | |
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) | 22,939,200 | |
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) | 1,000,000 | |
Percentage of voting shares that PMI may own, used in determining non-employee director status | 50.00% |
Stock Plans (RSU Awards) (Detai
Stock Plans (RSU Awards) (Details) - Restricted Stock Units (RSUs) [Member] - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares Granted (in shares) | 1,249,650 | 1,202,060 |
Weighted-Average Grant Date Fair Value Per RSU Award Granted (in dollars per share) | $ 100.70 | $ 98.47 |
Compensation expense for stock awards | $ 38 | $ 35 |
Stock Plans (PSU Awards) (Detai
Stock Plans (PSU Awards) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Performance Shares [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares Granted (in shares) | 401,500 | 393,460 |
Compensation expense for stock awards | $ 21 | $ 17 |
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) | $ 118.98 | $ 128.72 |
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) | $ 100.69 | $ 98.29 |
Benefit Plans (Components of Ne
Benefit Plans (Components of Net Periodic Benefit Cost) (Details) - Pension Plan [Member] - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | $ 53 | $ 51 |
Interest cost | 28 | 26 |
Expected return on plan assets | (87) | (79) |
Amortization: | ||
Net loss | 43 | 44 |
Prior service cost | 0 | 3 |
Net periodic pension cost | $ 37 | $ 45 |
Benefit Plans (Narrative) (Deta
Benefit Plans (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Postemployment benefit plans other cost components | $ 6 | $ 20 |
Employer contributions | 25 | |
Anticipated additional employer contributions during the remainder of the current fiscal year | 46 | |
Postemployment Benefit Plans [Member] | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Postemployment benefit plans other cost components | 19 | 22 |
Postretirement Benefit Costs [Member] | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Postemployment benefit plans other cost components | $ 3 | $ 4 |
Goodwill and Other Intangible50
Goodwill and Other Intangible Assets, net (Goodwill and Other Intangible Assets, by Segment) (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Goodwill and Other Intangible Assets, net [Line Items] | ||
Goodwill | $ 7,667 | $ 7,666 |
Other Intangible Assets, net | 2,455 | 2,432 |
European Union [Member] | ||
Goodwill and Other Intangible Assets, net [Line Items] | ||
Goodwill | 1,474 | 1,419 |
Other Intangible Assets, net | 439 | 458 |
Eastern Europe [Member] | ||
Goodwill and Other Intangible Assets, net [Line Items] | ||
Goodwill | 334 | 321 |
Other Intangible Assets, net | 22 | 16 |
Middle East And Africa [Member] | ||
Goodwill and Other Intangible Assets, net [Line Items] | ||
Goodwill | 107 | 102 |
Other Intangible Assets, net | 185 | 178 |
South And Southeast Asia [Member] | ||
Goodwill and Other Intangible Assets, net [Line Items] | ||
Goodwill | 2,938 | 3,010 |
Other Intangible Assets, net | 987 | 1,004 |
East Asia and Australia [Member] | ||
Goodwill and Other Intangible Assets, net [Line Items] | ||
Goodwill | 561 | 567 |
Other Intangible Assets, net | 59 | 44 |
Latin America & Canada [Member] | ||
Goodwill and Other Intangible Assets, net [Line Items] | ||
Goodwill | 2,253 | 2,247 |
Other Intangible Assets, net | $ 763 | $ 732 |
Goodwill and Other Intangible51
Goodwill and Other Intangible Assets, net (Movement In Goodwill) (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Goodwill [Roll Forward] | |
Balances, December 31, 2017 | $ 7,666 |
Changes due to: | |
Currency | 1 |
Balances, March 31, 2018 | 7,667 |
European Union [Member] | |
Goodwill [Roll Forward] | |
Balances, December 31, 2017 | 1,419 |
Changes due to: | |
Currency | 55 |
Balances, March 31, 2018 | 1,474 |
Eastern Europe [Member] | |
Goodwill [Roll Forward] | |
Balances, December 31, 2017 | 321 |
Changes due to: | |
Currency | 13 |
Balances, March 31, 2018 | 334 |
Middle East And Africa [Member] | |
Goodwill [Roll Forward] | |
Balances, December 31, 2017 | 102 |
Changes due to: | |
Currency | 5 |
Balances, March 31, 2018 | 107 |
South And Southeast Asia [Member] | |
Goodwill [Roll Forward] | |
Balances, December 31, 2017 | 3,010 |
Changes due to: | |
Currency | (72) |
Balances, March 31, 2018 | 2,938 |
East Asia and Australia [Member] | |
Goodwill [Roll Forward] | |
Balances, December 31, 2017 | 567 |
Changes due to: | |
Currency | (6) |
Balances, March 31, 2018 | 561 |
Latin America & Canada [Member] | |
Goodwill [Roll Forward] | |
Balances, December 31, 2017 | 2,247 |
Changes due to: | |
Currency | 6 |
Balances, March 31, 2018 | $ 2,253 |
Goodwill and Other Intangible52
Goodwill and Other Intangible Assets, net (Other Intangible Assets) (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Non-amortizable intangible assets, gross carrying amount | $ 1,341 | $ 1,323 |
Amortizable intangible assets, gross carrying amount | 1,818 | 1,798 |
Total other intangible assets, gross carrying amount | 3,159 | 3,121 |
Accumulated Amortization | $ 704 | $ 689 |
Goodwill and Other Intangible53
Goodwill and Other Intangible Assets, net (Range of Useful Lives and Weighted-Average Remaining Useful Lives of Amortizable Intangible Assets) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 1,818 | $ 1,798 |
Trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 1,555 | |
Weighted-Average Remaining Useful Life | 19 years | |
Trademarks [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Initial Estimated Useful Lives | 2 years | |
Trademarks [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Initial Estimated Useful Lives | 40 years | |
Distribution Networks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 151 | |
Weighted-Average Remaining Useful Life | 9 years | |
Distribution Networks [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Initial Estimated Useful Lives | 5 years | |
Distribution Networks [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Initial Estimated Useful Lives | 30 years | |
Other (Including Farmer Contracts and Intellectual Property Rights) [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 112 | |
Weighted-Average Remaining Useful Life | 11 years | |
Other (Including Farmer Contracts and Intellectual Property Rights) [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Initial Estimated Useful Lives | 4 years | |
Other (Including Farmer Contracts and Intellectual Property Rights) [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Initial Estimated Useful Lives | 17 years |
Goodwill and Other Intangible54
Goodwill and Other Intangible Assets, net (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Intangible assets, pre-tax amortization expense | $ 22 | $ 22 |
Estimated amortization expense, year one, assuming no additional transactions occur that require the amortization of intangible assets | 84 | |
Estimated amortization expense, year two, assuming no additional transactions occur that require the amortization of intangible assets | 84 | |
Estimated amortization expense, year three, assuming no additional transactions occur that require the amortization of intangible assets | 84 | |
Estimated amortization expense, year four, assuming no additional transactions occur that require the amortization of intangible assets | 84 | |
Estimated amortization expense, year five, assuming no additional transactions occur that require the amortization of intangible assets | $ 84 |
Financial Instruments (Narrativ
Financial Instruments (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Derivative [Line Items] | ||
Maturity of foreign currency derivatives - cash flow hedges | May 31, 2024 | |
Unrealized loss on hedges of net investments | $ 371 | $ (303) |
Gain on amounts excluded from effectiveness testing | 67 | |
Foreign Exchange Contract [Member] | ||
Derivative [Line Items] | ||
Notional amount | 33,400 | |
Derivative instruments, losses to be reclassified to earnings | $ (30) | |
Foreign Exchange Contract [Member] | Maximum [Member] | ||
Derivative [Line Items] | ||
Maximum length of time hedged in a cash flow hedge | 15 months | |
Foreign Exchange Contract [Member] | Not Designated as Hedging Instrument [Member] | ||
Derivative [Line Items] | ||
Notional amount | $ 15,000 | |
Gain (loss) on derivatives not designated as hedging instruments | 95 | (39) |
Net impact on earnings | 0 | 0 |
Foreign Exchange Contract [Member] | Cash Flow Hedging [Member] | ||
Derivative [Line Items] | ||
Notional amount | 7,100 | |
Foreign Exchange Contract [Member] | Net Investment Hedging [Member] | ||
Derivative [Line Items] | ||
Notional amount | 11,300 | |
Unrealized loss on hedges of net investments | $ 757 | $ 294 |
Financial Instruments (Fair Val
Financial Instruments (Fair Value of Foreign Exchange Contracts) (Details) - Foreign Exchange Contract [Member] - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Derivatives, Fair Value [Line Items] | ||
Derivative asset fair value | $ 114 | $ 140 |
Derivative liability fair value | 1,757 | 1,128 |
Designated as Hedging Instrument [Member] | Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset fair value | 48 | 84 |
Designated as Hedging Instrument [Member] | Other Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset fair value | 6 | 34 |
Designated as Hedging Instrument [Member] | Other Accrued Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability fair value | 433 | 197 |
Designated as Hedging Instrument [Member] | Other Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability fair value | 1,237 | 880 |
Not Designated as Hedging Instrument [Member] | Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset fair value | 60 | 22 |
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 | 20 | 37 |
Not Designated as Hedging Instrument [Member] | Other Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability fair value | $ 67 | $ 14 |
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) - Foreign Exchange Contract [Member] - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain/(Loss) Recognized in Other Comprehensive Earnings/(Losses) on Derivatives | $ (682) | $ (335) |
Amount of Gain/(Loss) Reclassified from Other Comprehensive Earnings/(Losses) into Earnings | (3) | (3) |
Cash Flow Hedges [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain/(Loss) Recognized in Other Comprehensive Earnings/(Losses) on Derivatives | (74) | (86) |
Cash Flow Hedges [Member] | Net Revenue [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain/(Loss) Reclassified from Other Comprehensive Earnings/(Losses) into Earnings | (9) | 9 |
Cash Flow Hedges [Member] | Cost of Sales [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain/(Loss) Reclassified from Other Comprehensive Earnings/(Losses) into Earnings | 0 | 0 |
Cash Flow Hedges [Member] | Marketing Administration And Research Costs [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain/(Loss) Reclassified from Other Comprehensive Earnings/(Losses) into Earnings | 8 | (9) |
Cash Flow Hedges [Member] | Interest Expense, Net [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain/(Loss) Reclassified from Other Comprehensive Earnings/(Losses) into Earnings | (2) | (3) |
Net Investment Hedges [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain/(Loss) Recognized in Other Comprehensive Earnings/(Losses) on Derivatives | $ (608) | $ (249) |
Financial Instruments (Qualifyi
Financial Instruments (Qualifying Hedging Activity Reported in Accumulated Other Comprehensive Earnings (Losses) Net of Income Taxes) (Details) - Foreign Exchange Contract [Member] - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Hedging Activity, Affecting Accumulated Other Comprehensive Income [Roll Forward] | ||
Derivative (gains)/losses transferred to earnings | $ 3 | $ 3 |
Change in fair value | (682) | (335) |
Other Comprehensive Income (Loss) [Member] | ||
Hedging Activity, Affecting Accumulated Other Comprehensive Income [Roll Forward] | ||
Gain as of January 1, | 42 | 97 |
Derivative (gains)/losses transferred to earnings | 2 | 5 |
Change in fair value | (64) | (75) |
Gain/(loss) as of March 31, | $ (20) | $ 27 |
Earnings Per Share (Calculation
Earnings Per Share (Calculation of Basic and Diluted EPS) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Earnings Per Share [Abstract] | ||
Net earnings attributable to PMI | $ 1,556 | $ 1,590 |
Less distributed and undistributed earnings attributable to share-based payment awards | 3 | 3 |
Net earnings for basic and diluted EPS | $ 1,553 | $ 1,587 |
Weighted-average shares for basic EPS (in shares) | 1,553,000,000 | 1,552,000,000 |
Plus contingently issuable performance stock units (PSUs) (in shares) | 1,000,000 | 1,000,000 |
Weighted-average shares for diluted EPS (in shares) | 1,554,000,000 | 1,553,000,000 |
Antidilutive stock awards (in shares) | 0 | 0 |
Segment Reporting (Details)
Segment Reporting (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2018USD ($)segment | Mar. 31, 2017USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of reportable segments | segment | 6 | |
Total PMI net revenues | $ 6,896 | $ 6,064 |
Operating income | 2,426 | 2,416 |
Combustible Products [Member] | ||
Segment Reporting Information [Line Items] | ||
Total PMI net revenues | 5,769 | 5,629 |
Reduced-Risk Products [Member] | ||
Segment Reporting Information [Line Items] | ||
Total PMI net revenues | 1,127 | 435 |
Operating Segments [Member] | European Union [Member] | ||
Segment Reporting Information [Line Items] | ||
Total PMI net revenues | 1,988 | 1,740 |
Operating income | 740 | 748 |
Operating Segments [Member] | Eastern Europe [Member] | ||
Segment Reporting Information [Line Items] | ||
Total PMI net revenues | 567 | 516 |
Operating income | 151 | 159 |
Operating Segments [Member] | Middle East And Africa [Member] | ||
Segment Reporting Information [Line Items] | ||
Total PMI net revenues | 961 | 961 |
Operating income | 374 | 491 |
Operating Segments [Member] | South And Southeast Asia [Member] | ||
Segment Reporting Information [Line Items] | ||
Total PMI net revenues | 1,081 | 1,031 |
Operating income | 429 | 370 |
Operating Segments [Member] | East Asia and Australia [Member] | ||
Segment Reporting Information [Line Items] | ||
Total PMI net revenues | 1,591 | 1,210 |
Operating income | 515 | 472 |
Operating Segments [Member] | Latin America & Canada [Member] | ||
Segment Reporting Information [Line Items] | ||
Total PMI net revenues | 708 | 606 |
Operating income | 217 | 176 |
Operating Segments [Member] | Combustible Products [Member] | European Union [Member] | ||
Segment Reporting Information [Line Items] | ||
Total PMI net revenues | 1,836 | 1,709 |
Operating Segments [Member] | Combustible Products [Member] | Eastern Europe [Member] | ||
Segment Reporting Information [Line Items] | ||
Total PMI net revenues | 527 | 513 |
Operating Segments [Member] | Combustible Products [Member] | Middle East And Africa [Member] | ||
Segment Reporting Information [Line Items] | ||
Total PMI net revenues | 884 | 957 |
Operating Segments [Member] | Combustible Products [Member] | South And Southeast Asia [Member] | ||
Segment Reporting Information [Line Items] | ||
Total PMI net revenues | 1,081 | 1,031 |
Operating Segments [Member] | Combustible Products [Member] | East Asia and Australia [Member] | ||
Segment Reporting Information [Line Items] | ||
Total PMI net revenues | 737 | 813 |
Operating Segments [Member] | Combustible Products [Member] | Latin America & Canada [Member] | ||
Segment Reporting Information [Line Items] | ||
Total PMI net revenues | 704 | 605 |
Operating Segments [Member] | Reduced-Risk Products [Member] | European Union [Member] | ||
Segment Reporting Information [Line Items] | ||
Total PMI net revenues | 152 | 31 |
Operating Segments [Member] | Reduced-Risk Products [Member] | Eastern Europe [Member] | ||
Segment Reporting Information [Line Items] | ||
Total PMI net revenues | 40 | 3 |
Operating Segments [Member] | Reduced-Risk Products [Member] | Middle East And Africa [Member] | ||
Segment Reporting Information [Line Items] | ||
Total PMI net revenues | 77 | 4 |
Operating Segments [Member] | Reduced-Risk Products [Member] | South And Southeast Asia [Member] | ||
Segment Reporting Information [Line Items] | ||
Total PMI net revenues | 0 | 0 |
Operating Segments [Member] | Reduced-Risk Products [Member] | East Asia and Australia [Member] | ||
Segment Reporting Information [Line Items] | ||
Total PMI net revenues | 854 | 396 |
Operating Segments [Member] | Reduced-Risk Products [Member] | Latin America & Canada [Member] | ||
Segment Reporting Information [Line Items] | ||
Total PMI net revenues | $ 4 | $ 0 |
Contingencies (Number of Tobacc
Contingencies (Number of Tobacco Related Cases Pending Against Us and/or Our Subsidiaries or Indemnitees) (Details) - litigation_case | Apr. 24, 2018 | Apr. 25, 2017 | Apr. 22, 2016 |
Individual Smoking And Health Cases [Member] | |||
Loss Contingencies [Line Items] | |||
Cases brought against PM | 63 | 66 | |
Smoking And Health Class Actions [Member] | |||
Loss Contingencies [Line Items] | |||
Cases brought against PM | 11 | 11 | |
Health Care Cost Recovery Actions [Member] | |||
Loss Contingencies [Line Items] | |||
Cases brought against PM | 16 | 16 | |
Label Related Class Action [Member] | |||
Loss Contingencies [Line Items] | |||
Cases brought against PM | 0 | 0 | |
Individual Label Related Cases [Member] | |||
Loss Contingencies [Line Items] | |||
Cases brought against PM | 1 | 3 | |
Public Civil Actions [Member] | |||
Loss Contingencies [Line Items] | |||
Cases brought against PM | 2 | 3 | |
Subsequent Event [Member] | Individual Smoking And Health Cases [Member] | |||
Loss Contingencies [Line Items] | |||
Cases brought against PM | 62 | ||
Subsequent Event [Member] | Smoking And Health Class Actions [Member] | |||
Loss Contingencies [Line Items] | |||
Cases brought against PM | 11 | ||
Subsequent Event [Member] | Health Care Cost Recovery Actions [Member] | |||
Loss Contingencies [Line Items] | |||
Cases brought against PM | 16 | ||
Subsequent Event [Member] | Label Related Class Action [Member] | |||
Loss Contingencies [Line Items] | |||
Cases brought against PM | 1 | ||
Subsequent Event [Member] | Individual Label Related Cases [Member] | |||
Loss Contingencies [Line Items] | |||
Cases brought against PM | 1 | ||
Subsequent Event [Member] | Public Civil Actions [Member] | |||
Loss Contingencies [Line Items] | |||
Cases brought against PM | 2 |
Contingencies (Tobacco-Related
Contingencies (Tobacco-Related Litigation) (Details) | Mar. 31, 2018litigation_case |
Loss Contingencies [Line Items] | |
Number of cases decided in favor of PM | 476 |
Number of cases decided in favor of plaintiff | 13 |
Cases Remaining On Appeal [Member] | |
Loss Contingencies [Line Items] | |
Number of cases decided in favor of plaintiff | 4 |
Case Decided In Favor Of Plaintiff [Member] | |
Loss Contingencies [Line Items] | |
Number of cases that reached final resolution in favor of PM | 9 |
Contingencies (Verdicts and Pos
Contingencies (Verdicts and Post-Trial Developments) (Details) | Aug. 05, 2016ARS ($) | Aug. 05, 2016USD ($) | May 27, 2015CAD ($) | May 27, 2015USD ($) | Oct. 30, 2015CAD ($) | Oct. 30, 2015USD ($) | Jul. 31, 2015 | Apr. 30, 2004BRL (R$) | Apr. 30, 2004USD ($) | Mar. 31, 2018 |
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 | R$ 1000 | $ 293 | ||||||||
Brazil [Member] | Smoking And Health Class Actions [Member] | Cases With Verdicts And Post Trial Developments [Member] | The Smoker Health Defense Association (ADESF) [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Date | February 2,004 | |||||||||
Verdict | The Civil Court of São Paulo found defendants liable without hearing evidence. In April 2004, the court awarded “moral damages” of R$1,000 (approximately $293) per smoker per full year of smoking plus interest at the rate of 1% per month, as of the date of the ruling. The court did not assess actual damages, which were to be assessed in a second phase of the case. The size of the class was not defined in the ruling. | |||||||||
Post-Trial Developments | 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. Plaintiff appealed the decision. In February 2015, the appellate court unanimously dismissed plaintiff's appeal. In September 2015, plaintiff appealed to the Superior Court of Justice. In addition, the defendants filed a constitutional appeal to the Federal Supreme Tribunal on the basis that plaintiff did not have standing to bring the lawsuit. This appeal is still pending. | |||||||||
Canada [Member] | Smoking And Health Class Actions [Member] | Cases With Verdicts And Post Trial Developments [Member] | Cecilia Letourneau [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Date | May 27, 2015 | |||||||||
Verdict | 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 $103 million) in punitive damages, allocating CAD 46 million (approximately $36 million) to our subsidiary. 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. | |||||||||
Post-Trial Developments | In June 2015, our subsidiary commenced the appellate process with the Court of Appeal of Quebec. Our subsidiary also filed a motion to cancel the trial court’s order for payment into a trust notwithstanding appeal. In July 2015, the Court of Appeal granted the motion to cancel and overturned the trial court’s ruling that our subsidiary make the payment into a trust. In August 2015, plaintiffs filed a motion for security with the Court of Appeal covering both the Létourneau case and the Blais case described below. In October 2015, the Court of Appeal granted the motion and ordered our subsidiary to furnish security totaling CAD 226 million (approximately $177 million) to cover both the Létourneau and Blais cases. The hearing for the merits appeal took place in November 2016. (See below for further detail.) | |||||||||
Canada [Member] | Smoking And Health Class Actions [Member] | Cases With Verdicts And Post Trial Developments [Member] | Conseil Quebecois Sur Le Tabac Et La Sante and Jean-Yves Blais [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Date | May 27, 2015 | |||||||||
Verdict | 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 $12.1 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 $70,500) in punitive damages, allocating CAD 30,000 (approximately $23,500) to our subsidiary. The trial court ordered defendants to pay CAD 1 billion (approximately $783 million) of the compensatory damage award, CAD 200 million (approximately $157 million) of which is our subsidiary’s portion, into a trust within 60 days. | |||||||||
Post-Trial Developments | In June 2015, our subsidiary commenced the appellate process with the Court of Appeal of Quebec. Our subsidiary also filed a motion to cancel the trial court’s order for payment into a trust notwithstanding appeal. In July 2015, the Court of Appeal granted the motion to cancel and overturned the trial court’s ruling that our subsidiary make the payment into a trust. In August 2015, plaintiffs filed a motion for security with the Court of Appeal. In October 2015, the Court of Appeal granted the motion and ordered our subsidiary to furnish security totaling, together with the Létourneau case, CAD 226 million (approximately $177 million). The hearing for the merits appeal took place in November 2016. (See below for further detail.) | |||||||||
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 | $ 103,000,000 | ||||||||
Payment period for awarded punitive damages to be deposited into trust | 60 days | 60 days | ||||||||
Canada [Member] | Smoking And Health Class Actions [Member] | Cecilia Letourneau [Member] | Judicial Ruling [Member] | Rothmans, Benson, And Hedges Inc. (RBH) [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Punitive damages awarded | $ 46,000,000 | $ 36,000,000 | ||||||||
Payment period for awarded punitive damages to be deposited into trust | 60 days | 60 days | ||||||||
Canada [Member] | Smoking And Health Class Actions [Member] | Cecilia Letourneau [Member] | Appellate Ruling [Member] | Rothmans, Benson, And Hedges Inc. (RBH) [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Payment period for awarded punitive damages to be deposited into trust | 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 | $ 70,500 | ||||||||
Compensatory damages awarded | 15,500,000,000 | 12,100,000,000 | ||||||||
Awarded compensatory damages that are to be deposited into trust | $ 1,000,000,000 | $ 783,000,000 | ||||||||
Payment period for compensatory 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] | Rothmans, Benson, And Hedges Inc. (RBH) [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Punitive damages awarded | $ 30,000 | $ 23,500 | ||||||||
Compensatory damages awarded | $ 3,100,000,000 | $ 2,400,000,000 | ||||||||
Damages allocated to subsidiary (percent) | 20.00% | 20.00% | ||||||||
Awarded compensatory damages that are to be deposited into trust | $ 200,000,000 | $ 157,000,000 | ||||||||
Payment period for compensatory 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] | Appellate Ruling [Member] | Rothmans, Benson, And Hedges Inc. (RBH) [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Payment period for awarded punitive damages to be deposited into trust | 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] | Rothmans, Benson, And Hedges Inc. (RBH) [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Amount of security ordered to be furnished | $ 226,000,000 | $ 177,000,000 | ||||||||
Argentina [Member] | Individual Action [Member] | Cases With Verdicts And Post Trial Developments [Member] | Hugo Lespada [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Date | August 5, 2016 | |||||||||
Verdict | 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 $5,446), 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. | |||||||||
Post-Trial Developments | 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. | |||||||||
Argentina [Member] | Individual Action [Member] | Hugo Lespada [Member] | Judicial Ruling [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Compensatory damages awarded | $ 110,000 | $ 5,446 |
Contingencies (Smoking And Heal
Contingencies (Smoking And Health Litigation) (Details) | May 27, 2015CAD ($)manufacturerplaintiff | May 27, 2015USD ($)manufacturerplaintiff | Jun. 20, 2012cigarette | Jul. 10, 2009cigarette | Mar. 31, 2017CAD ($) | Mar. 31, 2017USD ($) | Oct. 30, 2015CAD ($)installment | Oct. 30, 2015USD ($)installment | Aug. 31, 2015CAD ($) | Aug. 31, 2015USD ($) | Jul. 31, 2015 | Jun. 30, 2015 | Apr. 30, 2004BRL (R$) | Apr. 30, 2004USD ($) | Apr. 24, 2018litigation_case | Apr. 25, 2017litigation_case | Apr. 22, 2016litigation_case |
Individual Smoking And Health Cases [Member] | |||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||
Cases brought against PM | 63 | 66 | |||||||||||||||
Smoking And Health Class Actions [Member] | |||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||
Cases brought against PM | 11 | 11 | |||||||||||||||
Brazil [Member] | The Smoker Health Defense Association (ADESF) [Member] | Smoking And Health Class Actions [Member] | |||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||
Smoking and health loss contingency interest rate | 1.00% | 1.00% | |||||||||||||||
Brazil [Member] | The Smoker Health Defense Association (ADESF) [Member] | Award per smoker per year [Member] | Smoking And Health Class Actions [Member] | |||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||
Damages awarded | R$ 1000 | $ 293 | |||||||||||||||
Canada [Member] | Cecilia Letourneau [Member] | Smoking And Health Class Actions [Member] | |||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||
Number of additional manufacturers found liable | manufacturer | 2 | 2 | |||||||||||||||
Estimated number of members in class | plaintiff | 918,000 | 918,000 | |||||||||||||||
Canada [Member] | Cecilia Letourneau [Member] | Judicial Ruling [Member] | Imperial Tobacco Ltd., Rothmans, Benson And Hedges Inc., And JTI Macdonald Corp. [Member] | Smoking And Health Class Actions [Member] | |||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||
Punitive damages awarded | $ 131,000,000 | $ 103,000,000 | |||||||||||||||
Payment period for awarded punitive damages to be deposited into trust | 60 days | 60 days | |||||||||||||||
Canada [Member] | Cecilia Letourneau [Member] | Judicial Ruling [Member] | Rothmans, Benson, And Hedges Inc. (RBH) [Member] | Smoking And Health Class Actions [Member] | |||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||
Punitive damages awarded | $ 46,000,000 | $ 36,000,000 | |||||||||||||||
Payment period for awarded punitive damages to be deposited into trust | 60 days | 60 days | |||||||||||||||
Canada [Member] | Cecilia Letourneau [Member] | Appellate Ruling [Member] | Rothmans, Benson, And Hedges Inc. (RBH) [Member] | Smoking And Health Class Actions [Member] | |||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||
Payment period for awarded punitive damages to be deposited into trust | 60 days | ||||||||||||||||
Canada [Member] | Cecilia Letourneau [Member] | Pending Litigation [Member] | Rothmans, Benson, And Hedges Inc. (RBH) [Member] | Smoking And Health Class Actions [Member] | |||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||
Payment period for awarded punitive damages to be deposited into trust | 60 days | ||||||||||||||||
Period between addiction warning and claim | 3 years | 3 years | |||||||||||||||
Canada [Member] | Conseil Quebecois Sur Le Tabac Et La Sante and Jean-Yves Blais [Member] | Smoking And Health Class Actions [Member] | |||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||
Number of additional manufacturers found liable | manufacturer | 2 | 2 | |||||||||||||||
Estimated number of members in class | plaintiff | 99,957 | 99,957 | |||||||||||||||
Canada [Member] | Conseil Quebecois Sur Le Tabac Et La Sante and Jean-Yves Blais [Member] | Judicial Ruling [Member] | Imperial Tobacco Ltd., Rothmans, Benson And Hedges Inc., And JTI Macdonald Corp. [Member] | Smoking And Health Class Actions [Member] | |||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||
Punitive damages awarded | $ 90,000 | $ 70,500 | |||||||||||||||
Compensatory damages awarded | 15,500,000,000 | 12,100,000,000 | |||||||||||||||
Awarded compensatory damages that are to be deposited into trust | $ 1,000,000,000 | $ 783,000,000 | |||||||||||||||
Payment period for compensatory damages to be deposited into trust | 60 days | 60 days | |||||||||||||||
Canada [Member] | Conseil Quebecois Sur Le Tabac Et La Sante and Jean-Yves Blais [Member] | Judicial Ruling [Member] | Rothmans, Benson, And Hedges Inc. (RBH) [Member] | Smoking And Health Class Actions [Member] | |||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||
Punitive damages awarded | $ 30,000 | $ 23,500 | |||||||||||||||
Compensatory damages awarded | $ 3,100,000,000 | $ 2,400,000,000 | |||||||||||||||
Damages allocated to subsidiary (percent) | 20.00% | 20.00% | |||||||||||||||
Awarded compensatory damages that are to be deposited into trust | $ 200,000,000 | $ 157,000,000 | |||||||||||||||
Payment period for compensatory damages to be deposited into trust | 60 days | 60 days | |||||||||||||||
Canada [Member] | Conseil Quebecois Sur Le Tabac Et La Sante and Jean-Yves Blais [Member] | Appellate Ruling [Member] | Rothmans, Benson, And Hedges Inc. (RBH) [Member] | Smoking And Health Class Actions [Member] | |||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||
Payment period for awarded punitive damages to be deposited into trust | 60 days | ||||||||||||||||
Canada [Member] | Conseil Quebecois Sur Le Tabac Et La Sante and Jean-Yves Blais [Member] | Pending Litigation [Member] | Rothmans, Benson, And Hedges Inc. (RBH) [Member] | Smoking And Health Class Actions [Member] | |||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||
Payment period for compensatory damages to be deposited into trust | 60 days | ||||||||||||||||
Canada [Member] | Cecilia Letourneau & Conseil Quebecois Sur La Tabac Et La Sante and Jean-Yves Blais Cases [Member] | Rothmans, Benson, And Hedges Inc. (RBH) [Member] | Smoking And Health Class Actions [Member] | |||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||
Number of consecutive quarterly installment | installment | 6 | 6 | |||||||||||||||
Canada [Member] | Cecilia Letourneau & Conseil Quebecois Sur La Tabac Et La Sante and Jean-Yves Blais Cases [Member] | Imperial Tobacco Ltd. [Member] | Smoking And Health Class Actions [Member] | |||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||
Number of consecutive quarterly installment | installment | 7 | 7 | |||||||||||||||
Canada [Member] | Cecilia Letourneau & Conseil Quebecois Sur La Tabac Et La Sante and Jean-Yves Blais Cases [Member] | Appellate Ruling [Member] | Rothmans, Benson, And Hedges Inc. (RBH) [Member] | Smoking And Health Class Actions [Member] | |||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||
Amount of security ordered to be furnished | $ 226,000,000 | $ 177,000,000 | |||||||||||||||
Amount of security to be furnished in each consecutive quarterly installment | 37,600,000 | 29,400,000 | |||||||||||||||
Amount of security furnished by defendants in quarterly installment | $ 37,600,000 | $ 29,400,000 | |||||||||||||||
Canada [Member] | Cecilia Letourneau & Conseil Quebecois Sur La Tabac Et La Sante and Jean-Yves Blais Cases [Member] | Appellate Ruling [Member] | Imperial Tobacco Ltd. [Member] | Smoking And Health Class Actions [Member] | |||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||
Amount of security ordered to be furnished | 758,000,000 | 593,000,000 | |||||||||||||||
Amount of security to be furnished in each consecutive quarterly installment | $ 108,000,000 | $ 84,600,000 | |||||||||||||||
Canada [Member] | Cecilia Letourneau & Conseil Quebecois Sur La Tabac Et La Sante and Jean-Yves Blais Cases [Member] | Under Advisement [Member] | Imperial Tobacco Ltd., Rothmans, Benson And Hedges Inc., And JTI Macdonald Corp. [Member] | Smoking And Health Class Actions [Member] | |||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||
Motion to secure judgment, Letters of credit to be placed into trust, option 1 | $ 5,000,000,000 | $ 3,910,000,000 | |||||||||||||||
Canada [Member] | Adams [Member] | Pending Litigation [Member] | |||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||
Plaintiff requirement, Minimum number of cigarettes smoked | cigarette | 25,000 | ||||||||||||||||
Canada [Member] | Suzanne Jacklin [Member] | Pending Litigation [Member] | |||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||
Plaintiff requirement, Minimum number of cigarettes smoked | cigarette | 25,000 | ||||||||||||||||
Subsequent Event [Member] | Individual Smoking And Health Cases [Member] | |||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||
Cases brought against PM | 62 | ||||||||||||||||
Subsequent Event [Member] | Smoking And Health Class Actions [Member] | |||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||
Cases brought against PM | 11 | ||||||||||||||||
Subsequent Event [Member] | Argentina [Member] | Individual Smoking And Health Cases [Member] | |||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||
Cases brought against PM | 34 | ||||||||||||||||
Subsequent Event [Member] | Brazil [Member] | Individual Smoking And Health Cases [Member] | |||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||
Cases brought against PM | 10 | ||||||||||||||||
Subsequent Event [Member] | Brazil [Member] | Smoking And Health Class Actions [Member] | |||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||
Cases brought against PM | 2 | ||||||||||||||||
Subsequent Event [Member] | Canada [Member] | Individual Smoking And Health Cases [Member] | |||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||
Cases brought against PM | 4 | ||||||||||||||||
Subsequent Event [Member] | Canada [Member] | Smoking And Health Class Actions [Member] | |||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||
Cases brought against PM | 9 | ||||||||||||||||
Subsequent Event [Member] | Chile [Member] | Individual Smoking And Health Cases [Member] | |||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||
Cases brought against PM | 6 | ||||||||||||||||
Subsequent Event [Member] | Costa Rica [Member] | Individual Smoking And Health Cases [Member] | |||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||
Cases brought against PM | 1 | ||||||||||||||||
Subsequent Event [Member] | Italy [Member] | Individual Smoking And Health Cases [Member] | |||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||
Cases brought against PM | 3 | ||||||||||||||||
Subsequent Event [Member] | Philippines [Member] | Individual Smoking And Health Cases [Member] | |||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||
Cases brought against PM | 1 | ||||||||||||||||
Subsequent Event [Member] | Russia [Member] | Individual Smoking And Health Cases [Member] | |||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||
Cases brought against PM | 1 | ||||||||||||||||
Subsequent Event [Member] | Turkey [Member] | Individual Smoking And Health Cases [Member] | |||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||
Cases brought against PM | 1 | ||||||||||||||||
Subsequent Event [Member] | Scotland [Member] | Individual Smoking And Health Cases [Member] | |||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||
Cases brought against PM | 1 |
Contingencies (Health Care Cost
Contingencies (Health Care Cost Recovery Litigation) (Details) - Health Care Cost Recovery Actions [Member] $ in Millions | Apr. 14, 2014USD ($)patient | Oct. 17, 2008 | Mar. 13, 2008 | Feb. 26, 2008 | May 25, 2007 | May 09, 2007 | Apr. 24, 2018litigation_case | Apr. 25, 2017litigation_case | Apr. 22, 2016litigation_case |
Loss Contingencies [Line Items] | |||||||||
Cases brought against PM | 16 | 16 | |||||||
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 | ||||||||
Subsequent Event [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Cases brought against PM | 16 | ||||||||
Subsequent Event [Member] | Canada [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Cases brought against PM | 10 | ||||||||
Subsequent Event [Member] | Korea [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Cases brought against PM | 1 | ||||||||
Subsequent Event [Member] | Nigeria [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Cases brought against PM | 5 | ||||||||
Subsidiary And Other Korean Manufacturers [Member] | Korea [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Damages sought, value | $ | $ 53.7 |
Contingencies (Label-Related Ca
Contingencies (Label-Related Cases) (Details) plaintiff in Millions | Jul. 18, 2017plaintiff | Apr. 24, 2018litigation_case | Apr. 25, 2017litigation_case | Apr. 22, 2016litigation_case |
Individual Label Related Cases [Member] | ||||
Loss Contingencies [Line Items] | ||||
Cases brought against PM | 1 | 3 | ||
Individual Label Related Cases [Member] | Subsequent Event [Member] | ||||
Loss Contingencies [Line Items] | ||||
Cases brought against PM | 1 | |||
Individual Label Related Cases [Member] | Subsequent Event [Member] | Italy [Member] | ||||
Loss Contingencies [Line Items] | ||||
Cases brought against PM | 1 | |||
Purported Label Related Class Action [Member] | Subsequent Event [Member] | Israel [Member] | ||||
Loss Contingencies [Line Items] | ||||
Cases brought against PM | 1 | |||
Purported Label Related Class Action [Member] | Aharon Ringer V. Philip Morris Ltd. And Globrands Ltd. [Member] | ||||
Loss Contingencies [Line Items] | ||||
Estimated number of members in purported class | plaintiff | 7 |
Contingencies (Public Civil Act
Contingencies (Public Civil Actions) (Details) - Public Civil Actions [Member] - litigation_case | Apr. 24, 2018 | Apr. 25, 2017 | Apr. 22, 2016 |
Loss Contingencies [Line Items] | |||
Cases brought against PM | 2 | 3 | |
Subsequent Event [Member] | |||
Loss Contingencies [Line Items] | |||
Cases brought against PM | 2 | ||
Subsequent Event [Member] | Argentina [Member] | |||
Loss Contingencies [Line Items] | |||
Cases brought against PM | 1 | ||
Subsequent Event [Member] | Venezuela [Member] | |||
Loss Contingencies [Line Items] | |||
Cases brought against PM | 1 |
Contingencies (Other Litigation
Contingencies (Other Litigation) (Details) - Other Litigation [Member] $ in Millions, ₩ in Billions, ฿ in Billions | Nov. 29, 2017THB (฿) | Nov. 29, 2017USD ($) | Jan. 26, 2017THB (฿) | Jan. 26, 2017USD ($) | Jan. 18, 2016THB (฿)defendant | Jan. 18, 2016USD ($)defendant | Mar. 31, 2017KRW (₩) | Mar. 31, 2017USD ($) | Mar. 31, 2017KRW (₩) | Mar. 31, 2017USD ($) | Dec. 31, 2016KRW (₩) | Dec. 31, 2016USD ($) |
Thailand [Member] | The Department of Special Investigations of the Government of Thailand [Member] | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Loss contingency, damages sought, value | ฿ 25.6 | $ 813 | ฿ 19.8 | $ 629 | ||||||||
Thailand [Member] | The Department of Special Investigations of the Government of Thailand [Member] | Pending Litigation [Member] | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Number of defendants | 8 | 8 | ||||||||||
Loss contingency, damages sought, value | ฿ 80.8 | $ 2,570 | ||||||||||
Korea [Member] | The South Korean Board Of Audit And Inspection [Member] | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Amounts paid | ₩ 172 | $ 160 | ₩ 272 | $ 254 | ₩ 100 | $ 93 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2018 | |
Income Taxes [Line Items] | ||||
Provisional expense | $ 1,600 | |||
Accumulated foreign earnings provisional tax charge | 1,400 | |||
Re-measurement provisional charge | $ 200 | |||
Effective tax rate | 25.50% | 24.90% | ||
Tax benefit from legal entity restructuring | $ 61 | |||
United States [Member] | ||||
Income Taxes [Line Items] | ||||
Open Tax Year | 2013 and onward | |||
Scenario, Forecast [Member] | ||||
Income Taxes [Line Items] | ||||
Effective tax rate | 26.00% |
Indebtedness (Narrative) (Detai
Indebtedness (Narrative) (Details) - USD ($) | Mar. 31, 2018 | Jan. 29, 2018 | Dec. 31, 2017 |
Line of Credit Facility [Line Items] | |||
Short-term borrowings, carrying value | $ 608,000,000 | $ 499,000,000 | |
Committed credit facilities | 8,000,000,000 | ||
Borrowings under committed credit facilities | 0 | ||
364-day revolving credit expiring February 5, 2019 [Member] | |||
Line of Credit Facility [Line Items] | |||
Committed credit facilities | $ 2,000,000,000 | $ 2,000,000,000 |
Indebtedness (Long-Term Debt) (
Indebtedness (Long-Term Debt) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | ||
Long-term Debt and Capital Lease Obligations, Including Current Maturities | $ 34,240 | $ 33,840 |
Less current portion of long-term debt | 4,662 | 2,506 |
Long-term Debt | 29,578 | 31,334 |
U.S. Dollar Notes [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt and Capital Lease Obligations, Including Current Maturities | $ 23,294 | 23,291 |
Interest rate, average | 3.566% | |
Due through | 2,044 | |
U.S. Dollar Notes [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 1.375% | |
U.S. Dollar Notes [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 6.375% | |
Euro Notes [Member] | Foreign Currency Obligations [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt and Capital Lease Obligations, Including Current Maturities | $ 9,348 | 8,997 |
Interest rate, average | 2.25% | |
Due through | 2,037 | |
Euro Notes [Member] | Foreign Currency Obligations [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 0.625% | |
Euro Notes [Member] | Foreign Currency Obligations [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 3.125% | |
Swiss Franc Notes [Member] | Foreign Currency Obligations [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt and Capital Lease Obligations, Including Current Maturities | $ 1,418 | 1,376 |
Interest rate, average | 1.269% | |
Due through | 2,024 | |
Swiss Franc Notes [Member] | Foreign Currency Obligations [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 0.75% | |
Swiss Franc Notes [Member] | Foreign Currency Obligations [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 2.00% | |
Other [Member] | Foreign Currency Obligations [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt and Capital Lease Obligations, Including Current Maturities | $ 180 | $ 176 |
Interest rate, average | 3.378% | |
Due through | 2,024 |
Indebtedness (Credit Facilities
Indebtedness (Credit Facilities) (Details) - USD ($) $ in Billions | Mar. 31, 2018 | Jan. 29, 2018 |
Line of Credit Facility [Line Items] | ||
Committed credit facilities | $ 8 | |
364-day revolving credit expiring February 5, 2019 [Member] | ||
Line of Credit Facility [Line Items] | ||
Committed credit facilities | 2 | $ 2 |
Multi-year revolving credit, expiring February 28, 2021 [Member] | ||
Line of Credit Facility [Line Items] | ||
Committed credit facilities | 2.5 | |
Multi-year revolving credit, expiring October 1, 2022 [Member] | ||
Line of Credit Facility [Line Items] | ||
Committed credit facilities | $ 3.5 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) $ in Millions | Mar. 31, 2018USD ($) |
Fair Value Disclosures [Abstract] | |
Capital lease obligations, carrying value | $ 27 |
Debt excluding short-term borrowings and capital lease obligations, carrying value | $ 34,213 |
Fair Value Measurements (Aggreg
Fair Value Measurements (Aggregate Fair Value of Derivative Financial Instruments, Debt and Contingent Consideration) (Details) $ in Millions | Mar. 31, 2018USD ($) |
Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) [Member] | |
Assets: | |
Equity securities | $ 272 |
Foreign exchange contracts | 0 |
Total assets | 272 |
Liabilities: | |
Debt | 35,293 |
Foreign exchange contracts | 0 |
Total liabilities | 35,293 |
Significant Other Observable Inputs (Level 2) [Member] | |
Assets: | |
Equity securities | 0 |
Foreign exchange contracts | 114 |
Total assets | 114 |
Liabilities: | |
Debt | 171 |
Foreign exchange contracts | 1,757 |
Total liabilities | 1,928 |
Significant Unobservable Inputs (Level 3) [Member] | |
Assets: | |
Equity securities | 0 |
Foreign exchange contracts | 0 |
Total assets | 0 |
Liabilities: | |
Debt | 0 |
Foreign exchange contracts | 0 |
Total liabilities | 0 |
Fair Value [Member] | |
Assets: | |
Equity securities | 272 |
Foreign exchange contracts | 114 |
Total assets | 386 |
Liabilities: | |
Debt | 35,464 |
Foreign exchange contracts | 1,757 |
Total liabilities | $ 37,221 |
Accumulated Other Comprehensi75
Accumulated Other Comprehensive Losses (Components of Accumulated Other Comprehensive Earnings (Losses), Net of Tax) (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Total accumulated other comprehensive losses | $ (10,482) | $ (10,230) | $ (10,557) | $ (10,900) |
Currency translation adjustments [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Total accumulated other comprehensive losses | (6,097) | (5,761) | (5,783) | |
Pension and other benefits [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Total accumulated other comprehensive losses | (2,766) | (2,816) | (3,509) | |
Derivatives accounted for as hedges [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Total accumulated other comprehensive losses | (20) | 42 | 27 | |
Accumulated Other Comprehensive Losses [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Total accumulated other comprehensive losses | $ (8,883) | $ (8,535) | $ (9,265) | $ (9,559) |
Balance Sheet Offsetting (Detai
Balance Sheet Offsetting (Details) - Foreign Exchange Contract [Member] - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Gross Amounts Recognized | $ 114 | $ 140 |
Gross Amount Offset in the Condensed Consolidated Balance Sheet | 0 | 0 |
Net Amounts Presented in the Condensed Consolidated Balance Sheet | 114 | 140 |
Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet, Financial Instruments | (25) | (50) |
Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet, Cash Collateral Received/Pledged | (68) | (78) |
Net Amount | 21 | 12 |
Liabilities | ||
Gross Amounts Recognized | 1,757 | 1,128 |
Gross Amount Offset in the Condensed Consolidated Balance Sheet | 0 | 0 |
Net Amounts Presented in the Condensed Consolidated Balance Sheet | 1,757 | 1,128 |
Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet, Financial Instruments | (25) | (50) |
Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet, Cash Collateral Received/Pledged | (1,719) | (1,004) |
Net Amount | $ 13 | $ 74 |
Investments in Unconsolidated77
Investments in Unconsolidated Subsidiaries (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Schedule of Equity Method Investments [Line Items] | ||
Equity method investments | $ 1,098 | $ 1,074 |
Difference between equity method investment carrying value and book value | 932 | 927 |
Dividends from unconsolidated subsidiaries | $ 10 | 120 |
STAEM [Member] | EITA [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership percentage | 51.00% | |
STAEM [Member] | Management Et Development Des Actifs Et Des Ressources [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership percentage | 49.00% | |
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 | $ 879 | $ 873 |
EITA [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership percentage | 49.00% | |
STAEM [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership percentage | 25.00% | |
Megapolis [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership percentage | 23.00% |
Investments in Unconsolidated78
Investments in Unconsolidated Subsidiaries (Balance sheet and earnings activity) (Details) - Eastern Europe Segment and Middle East And Africa Segment [Member] - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Schedule of Equity Method Investments [Line Items] | |||
Net revenues | $ 923 | $ 840 | |
Receivables | $ 471 | $ 293 |
Sale of Accounts Receivable (De
Sale of Accounts Receivable (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Sale of Accounts Receivable [Abstract] | ||
Servicing liability | $ 0 | $ 0 |
Trade receivables sold and derecognized from the Consolidated Balance Sheets | 2,509 | 2,092 |
Trade receivables sold and derecognized that remain uncollected | 878 | 561 |
Loss on sale of trade receivables | $ 0 | $ 0 |
Product Warranty - Narrative (D
Product Warranty - Narrative (Details) | 3 Months Ended |
Mar. 31, 2018 | |
Guarantees and Product Warranties [Abstract] | |
Standard product warranty term | 12 months |
Product Warranty - Movement in
Product Warranty - Movement in Product Warranty Obligations (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Balance at beginning of period | $ 71 | $ 51 |
Changes due to: | ||
Warranties issued | 76 | 168 |
Settlements | (54) | (148) |
Currency | 1 | 0 |
Balance at end of period | $ 94 | $ 71 |
Acquisitions (Narrative) (Detai
Acquisitions (Narrative) (Details) - Tabacalera Costarricense, S.A. And Mendiola Y Campania, S.A. Purchase Of Noncontrolling Interest [Member] $ in Millions | Mar. 21, 2018USD ($) |
Business Acquisition [Line Items] | |
Interest acquired | 49.00% |
Net purchase price | $ 95 |
Contingent consideration | $ 2 |
Ownership percentage | 100.00% |
Decrease to additional paid-in capital | $ 86 |
New Accounting Standards (Reven
New Accounting Standards (Revenue Recognition) (Details) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018USD ($)segment | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net revenues | $ 18,426 | $ 16,556 | ||
Excises taxes | 11,530 | 10,492 | ||
Net revenues | $ 6,896 | 6,064 | ||
Number of reportable segments | segment | 6 | |||
Revenue, Excluding Assessed Tax [Member] | Customer Concentration Risk [Member] | East Asia and Australia [Member] | Customer One [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Concentration risk percentage | 16.00% | 11.00% | ||
Revenue, Excluding Assessed Tax [Member] | Customer Concentration Risk [Member] | European Union [Member] | Customer One [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Concentration risk percentage | 10.00% | 11.00% | ||
Indonesia [Member] | Revenue, Including Assessed Tax [Member] | Geographic Concentration Risk [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net revenues | $ 8,000 | $ 7,700 | ||
Indonesia [Member] | Revenue, Excluding Assessed Tax [Member] | Geographic Concentration Risk [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net revenues | 3,200 | 3,200 | ||
Germany [Member] | Revenue, Including Assessed Tax [Member] | Geographic Concentration Risk [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net revenues | 7,200 | 7,100 | ||
Japan [Member] | Revenue, Excluding Assessed Tax [Member] | Geographic Concentration Risk [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net revenues | $ 4,700 | $ 2,800 | ||
Accounting Standards Update 2014-09 [Member] | Calculated under Revenue Guidance in Effect before Topic 606 [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net revenues | 16,556 | |||
Excises taxes | $ 10,492 |
New Accounting Standards (Finan
New Accounting Standards (Financial Instruments) (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Investments in unconsolidated subsidiaries and equity securities | $ 1,395 | $ 1,074 | |
Deferred income taxes | 822 | 799 | |
Earnings reinvested in the business | $ 29,985 | $ 29,859 | |
Accounting Standards Update 2016-01 [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Investments in unconsolidated subsidiaries and equity securities | $ 301 | ||
Deferred income taxes | 63 | ||
Earnings reinvested in the business | $ 238 |