|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Virginia
|
|
1-33708
|
|
13-3435103
|
(State or other jurisdiction
of incorporation)
|
|
(Commission File Number)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
120 Park Avenue, New York, New York
|
|
10017-5592
|
(Address of principal executive offices)
|
|
(Zip Code)
|
|
|
|
|
|
¨
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
¨
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
¨
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
¨
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
Item 8.01.
|
Other Events.
|
Item 9.01.
|
Financial Statements and Exhibits.
|
(d)
|
Exhibits
|
12
|
Statement regarding computation of ratios of earnings to fixed charges.
|
23
|
Consent of independent registered public accounting firm.
|
99.1
|
Financial Statements.
|
99.2
|
Report of management on internal control over financial reporting.
|
99.3
|
Report of independent registered public accounting firm.
|
|
|
|
PHILIP MORRIS INTERNATIONAL INC.
|
||
|
|
|
By:
|
|
/s/ JACEK OLCZAK
|
Name:
|
|
Jacek Olczak
|
Title:
|
|
Chief Financial Officer
|
|
|
|
Exhibit No.
|
|
Description
|
|
|
|
12
|
|
Statement regarding computation of ratios of earnings to fixed charges.
|
|
|
|
23
|
|
Consent of independent registered public accounting firm.
|
|
|
|
99.1
|
|
Financial Statements.
|
|
|
|
99.2
|
|
Report of management on internal control over financial reporting.
|
|
|
|
99.3
|
|
Report of independent registered public accounting firm.
|
|
|
For the Years Ended December 31,
|
||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Earnings before income taxes
|
$
|
9,924
|
|
|
$
|
9,615
|
|
|
$
|
10,650
|
|
|
$
|
12,542
|
|
|
$
|
13,004
|
|
Add (deduct):
|
|
|
|
|
|
|
|
|
|
||||||||||
Dividends from less than 50%
owned affiliates |
117
|
|
|
127
|
|
|
107
|
|
|
1
|
|
|
—
|
|
|||||
Fixed charges
|
1,166
|
|
|
1,232
|
|
|
1,284
|
|
|
1,216
|
|
|
1,115
|
|
|||||
Interest capitalized, net of
amortization |
—
|
|
|
(3
|
)
|
|
1
|
|
|
4
|
|
|
2
|
|
|||||
Earnings available for fixed charges
|
$
|
11,207
|
|
|
$
|
10,971
|
|
|
$
|
12,042
|
|
|
$
|
13,763
|
|
|
$
|
14,121
|
|
Fixed charges:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest incurred
|
$
|
1,071
|
|
|
$
|
1,137
|
|
|
$
|
1,172
|
|
|
$
|
1,105
|
|
|
$
|
1,009
|
|
Portion of rent expense deemed to
represent interest factor |
95
|
|
|
95
|
|
|
112
|
|
|
111
|
|
|
106
|
|
|||||
Fixed charges
|
$
|
1,166
|
|
|
$
|
1,232
|
|
|
$
|
1,284
|
|
|
$
|
1,216
|
|
|
$
|
1,115
|
|
Ratio of earnings to fixed charges
|
9.6
|
|
|
8.9
|
|
|
9.4
|
|
|
11.3
|
|
|
12.7
|
|
/s/ BARRY J. MISTHAL
|
|
/s/ DR. MICHAEL ABRESCH
|
Barry J. Misthal
|
|
Dr. Michael Abresch
|
|
|
|
Lausanne, Switzerland
|
|
|
February 2, 2017
|
|
|
at December 31,
|
2016
|
|
2015
|
||||
Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
4,239
|
|
|
$
|
3,417
|
|
Receivables (less allowances of $42 in 2016 and $58 in 2015)
|
3,499
|
|
|
2,778
|
|
||
Inventories:
|
|
|
|
||||
Leaf tobacco
|
2,498
|
|
|
2,640
|
|
||
Other raw materials
|
1,569
|
|
|
1,613
|
|
||
Finished product
|
4,950
|
|
|
4,220
|
|
||
|
9,017
|
|
|
8,473
|
|
||
Deferred income taxes
|
—
|
|
|
488
|
|
||
Other current assets
|
853
|
|
|
648
|
|
||
Total current assets
|
17,608
|
|
|
15,804
|
|
||
Property, plant and equipment, at cost:
|
|
|
|
||||
Land and land improvements
|
590
|
|
|
583
|
|
||
Buildings and building equipment
|
3,474
|
|
|
3,361
|
|
||
Machinery and equipment
|
7,366
|
|
|
6,978
|
|
||
Construction in progress
|
930
|
|
|
845
|
|
||
|
12,360
|
|
|
11,767
|
|
||
Less: accumulated depreciation
|
6,296
|
|
|
6,046
|
|
||
|
6,064
|
|
|
5,721
|
|
||
Goodwill (Note 3)
|
7,324
|
|
|
7,415
|
|
||
Other intangible assets, net (Note 3)
|
2,470
|
|
|
2,623
|
|
||
Investments in unconsolidated subsidiaries (Note 4)
|
1,011
|
|
|
890
|
|
||
Deferred income taxes
|
859
|
|
|
360
|
|
||
Other assets
|
1,515
|
|
|
1,143
|
|
||
Total Assets
|
$
|
36,851
|
|
|
$
|
33,956
|
|
at December 31,
|
2016
|
|
2015
|
||||
Liabilities
|
|
|
|
||||
Short-term borrowings (Note 7)
|
$
|
643
|
|
|
$
|
825
|
|
Current portion of long-term debt (Note 7)
|
2,573
|
|
|
2,405
|
|
||
Accounts payable
|
1,666
|
|
|
1,289
|
|
||
Accrued liabilities:
|
|
|
|
||||
Marketing and selling
|
575
|
|
|
640
|
|
||
Taxes, except income taxes
|
6,204
|
|
|
5,121
|
|
||
Employment costs
|
800
|
|
|
903
|
|
||
Dividends payable
|
1,621
|
|
|
1,589
|
|
||
Other
|
1,553
|
|
|
1,438
|
|
||
Income taxes
|
832
|
|
|
970
|
|
||
Deferred income taxes
|
—
|
|
|
206
|
|
||
Total current liabilities
|
16,467
|
|
|
15,386
|
|
||
Long-term debt (Note 7)
|
25,851
|
|
|
25,250
|
|
||
Deferred income taxes
|
1,897
|
|
|
1,543
|
|
||
Employment costs
|
2,800
|
|
|
2,566
|
|
||
Other liabilities
|
736
|
|
|
687
|
|
||
Total liabilities
|
47,751
|
|
|
45,432
|
|
||
Contingencies (Note 19)
|
|
|
|
||||
Stockholders’ (Deficit) Equity
|
|
|
|
||||
Common stock, no par value (2,109,316,331 shares issued in 2016 and 2015)
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
1,964
|
|
|
1,929
|
|
||
Earnings reinvested in the business
|
30,397
|
|
|
29,842
|
|
||
Accumulated other comprehensive losses
|
(9,559
|
)
|
|
(9,402
|
)
|
||
|
22,802
|
|
|
22,369
|
|
||
Less: cost of repurchased stock (557,930,784 and 559,972,262 shares in 2016 and 2015, respectively)
|
35,490
|
|
|
35,613
|
|
||
Total PMI stockholders’ deficit
|
(12,688
|
)
|
|
(13,244
|
)
|
||
Noncontrolling interests
|
1,788
|
|
|
1,768
|
|
||
Total stockholders’ deficit
|
(10,900
|
)
|
|
(11,476
|
)
|
||
Total Liabilities and Stockholders’ (Deficit) Equity
|
$
|
36,851
|
|
|
$
|
33,956
|
|
for the years ended December 31,
|
2016
|
|
2015
|
|
2014
|
||||||
Net revenues
|
$
|
74,953
|
|
|
$
|
73,908
|
|
|
$
|
80,106
|
|
Cost of sales
|
9,391
|
|
|
9,365
|
|
|
10,436
|
|
|||
Excise taxes on products
|
48,268
|
|
|
47,114
|
|
|
50,339
|
|
|||
Gross profit
|
17,294
|
|
|
17,429
|
|
|
19,331
|
|
|||
Marketing, administration and research costs
|
6,405
|
|
|
6,656
|
|
|
7,001
|
|
|||
Asset impairment and exit costs (Note 5)
|
—
|
|
|
68
|
|
|
535
|
|
|||
Amortization of intangibles
|
74
|
|
|
82
|
|
|
93
|
|
|||
Operating income
|
10,815
|
|
|
10,623
|
|
|
11,702
|
|
|||
Interest expense, net (Note 14)
|
891
|
|
|
1,008
|
|
|
1,052
|
|
|||
Earnings before income taxes
|
9,924
|
|
|
9,615
|
|
|
10,650
|
|
|||
Provision for income taxes
|
2,768
|
|
|
2,688
|
|
|
3,097
|
|
|||
Equity (income)/loss in unconsolidated subsidiaries, net
|
(94
|
)
|
|
(105
|
)
|
|
(105
|
)
|
|||
Net earnings
|
7,250
|
|
|
7,032
|
|
|
7,658
|
|
|||
Net earnings attributable to noncontrolling interests
|
283
|
|
|
159
|
|
|
165
|
|
|||
Net earnings attributable to PMI
|
$
|
6,967
|
|
|
$
|
6,873
|
|
|
$
|
7,493
|
|
Per share data (Note 10):
|
|
|
|
|
|
||||||
Basic earnings per share
|
$
|
4.48
|
|
|
$
|
4.42
|
|
|
$
|
4.76
|
|
Diluted earnings per share
|
$
|
4.48
|
|
|
$
|
4.42
|
|
|
$
|
4.76
|
|
for the years ended December 31,
|
2016
|
|
2015
|
|
2014
|
||||||
Net earnings
|
$
|
7,250
|
|
|
$
|
7,032
|
|
|
$
|
7,658
|
|
Other comprehensive earnings (losses), net of income taxes:
|
|
|
|
|
|
||||||
Change in currency translation adjustments:
|
|
|
|
|
|
||||||
Unrealized gains (losses), net of income taxes of ($101) in 2016, ($143) in 2015 and ($161) in 2014
|
(14
|
)
|
|
(2,248
|
)
|
|
(1,746
|
)
|
|||
(Gains)/losses transferred to earnings, net of income taxes of $- in 2016, 2015 and 2014
|
5
|
|
|
(1
|
)
|
|
(5
|
)
|
|||
Change in net loss and prior service cost:
|
|
|
|
|
|
||||||
Net losses and prior service costs, net of income taxes of $78 in 2016, $17 in 2015 and $167 in 2014
|
(460
|
)
|
|
(536
|
)
|
|
(1,148
|
)
|
|||
Amortization of net losses, prior service costs and net transition costs, net of income taxes of ($43) in 2016, ($48) in 2015 and ($42) in 2014
|
224
|
|
|
227
|
|
|
173
|
|
|||
Change in fair value of derivatives accounted for as hedges:
|
|
|
|
|
|
||||||
Gains (losses) recognized, net of income taxes of ($4) in 2016, ($5) in 2015 and ($13) in 2014
|
8
|
|
|
38
|
|
|
98
|
|
|||
(Gains) losses transferred to earnings, net of income taxes of ($3) in 2016, $14 in 2015 and $10 in 2014
|
30
|
|
|
(102
|
)
|
|
(38
|
)
|
|||
Total other comprehensive losses
|
(207
|
)
|
|
(2,622
|
)
|
|
(2,666
|
)
|
|||
Total comprehensive earnings
|
7,043
|
|
|
4,410
|
|
|
4,992
|
|
|||
Less comprehensive earnings attributable to:
|
|
|
|
|
|
||||||
Noncontrolling interests
|
233
|
|
|
113
|
|
|
135
|
|
|||
Comprehensive earnings attributable to PMI
|
$
|
6,810
|
|
|
$
|
4,297
|
|
|
$
|
4,857
|
|
|
PMI Stockholders’ (Deficit) Equity
|
|
|
|
|
||||||||||||||||||||||
|
Common
Stock |
|
Additional
Paid-in Capital |
|
Earnings Reinvested
in the Business |
|
Accumulated Other
Comprehensive Losses |
|
Cost of
Repurchased Stock |
|
Noncontrolling
Interests |
|
Total
|
||||||||||||||
Balances, January 1, 2014
|
$
|
—
|
|
|
$
|
723
|
|
|
$
|
27,843
|
|
|
$
|
(4,190
|
)
|
|
$
|
(32,142
|
)
|
|
$
|
1,492
|
|
|
$
|
(6,274
|
)
|
Net earnings
|
|
|
|
|
7,493
|
|
|
|
|
|
|
165
|
|
|
7,658
|
|
|||||||||||
Other comprehensive earnings (losses), net of income taxes
|
|
|
|
|
|
|
(2,636
|
)
|
|
|
|
(30
|
)
|
|
(2,666
|
)
|
|||||||||||
Issuance of stock awards and exercise of stock options
|
|
|
(13
|
)
|
|
|
|
|
|
180
|
|
|
|
|
167
|
|
|||||||||||
Dividends declared ($3.88 per share)
|
|
|
|
|
(6,087
|
)
|
|
|
|
|
|
|
|
(6,087
|
)
|
||||||||||||
Payments to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
(207
|
)
|
|
(207
|
)
|
||||||||||||
Common stock repurchased
|
|
|
|
|
|
|
|
|
(3,800
|
)
|
|
|
|
(3,800
|
)
|
||||||||||||
Other
|
|
|
|
|
|
|
|
|
|
|
6
|
|
|
6
|
|
||||||||||||
Balances, December 31, 2014
|
—
|
|
|
710
|
|
|
29,249
|
|
|
(6,826
|
)
|
|
(35,762
|
)
|
|
1,426
|
|
|
(11,203
|
)
|
|||||||
Net earnings
|
|
|
|
|
6,873
|
|
|
|
|
|
|
159
|
|
|
7,032
|
|
|||||||||||
Other comprehensive earnings (losses), net of income taxes
|
|
|
|
|
|
|
(2,576
|
)
|
|
|
|
(46
|
)
|
|
(2,622
|
)
|
|||||||||||
Issuance of stock awards
|
|
|
(3
|
)
|
|
|
|
|
|
149
|
|
|
|
|
146
|
|
|||||||||||
Dividends declared ($4.04 per share)
|
|
|
|
|
(6,280
|
)
|
|
|
|
|
|
|
|
(6,280
|
)
|
||||||||||||
Payments to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
(171
|
)
|
|
(171
|
)
|
||||||||||||
Sale (purchase) of subsidiary shares to/(from) noncontrolling interests (Note 6)
|
|
|
1,222
|
|
|
|
|
|
|
|
|
400
|
|
|
1,622
|
|
|||||||||||
Balances, December 31, 2015
|
—
|
|
|
1,929
|
|
|
29,842
|
|
|
(9,402
|
)
|
|
(35,613
|
)
|
|
1,768
|
|
|
(11,476
|
)
|
|||||||
Net earnings
|
|
|
|
|
6,967
|
|
|
|
|
|
|
283
|
|
|
7,250
|
|
|||||||||||
Other comprehensive earnings (losses), net of income taxes
|
|
|
|
|
|
|
(157
|
)
|
|
|
|
(50
|
)
|
|
(207
|
)
|
|||||||||||
Issuance of stock awards
|
|
|
37
|
|
|
|
|
|
|
123
|
|
|
|
|
160
|
|
|||||||||||
Dividends declared ($4.12 per share)
|
|
|
|
|
(6,412
|
)
|
|
|
|
|
|
|
|
(6,412
|
)
|
||||||||||||
Payments to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
(219
|
)
|
|
(219
|
)
|
||||||||||||
Other
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
6
|
|
|
4
|
|
|||||||||||
Balances, December 31, 2016
|
$
|
—
|
|
|
$
|
1,964
|
|
|
$
|
30,397
|
|
|
$
|
(9,559
|
)
|
|
$
|
(35,490
|
)
|
|
$
|
1,788
|
|
|
$
|
(10,900
|
)
|
for the years ended December 31,
|
2016
|
|
2015
|
|
2014
|
||||||
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
|
|
|
|
|
|
||||||
Net earnings
|
$
|
7,250
|
|
|
$
|
7,032
|
|
|
$
|
7,658
|
|
Adjustments to reconcile net earnings to operating cash flows:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
743
|
|
|
754
|
|
|
889
|
|
|||
Deferred income tax (benefit) provision
|
182
|
|
|
(18
|
)
|
|
(62
|
)
|
|||
Asset impairment and exit costs, net of cash paid
|
(31
|
)
|
|
(164
|
)
|
|
175
|
|
|||
Cash effects of changes, net of the effects from acquired companies:
|
|
|
|
|
|
||||||
Receivables, net
|
(1,009
|
)
|
|
647
|
|
|
(463
|
)
|
|||
Inventories
|
(695
|
)
|
|
(841
|
)
|
|
105
|
|
|||
Accounts payable
|
373
|
|
|
310
|
|
|
177
|
|
|||
Income taxes
|
(209
|
)
|
|
(42
|
)
|
|
(230
|
)
|
|||
Accrued liabilities and other current assets
|
1,477
|
|
|
(8
|
)
|
|
(507
|
)
|
|||
Pension plan contributions
|
(191
|
)
|
|
(154
|
)
|
|
(191
|
)
|
|||
Other
|
187
|
|
|
349
|
|
|
188
|
|
|||
Net cash provided by operating activities
|
8,077
|
|
|
7,865
|
|
|
7,739
|
|
|||
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
|
|
|
|
|
|
||||||
Capital expenditures
|
(1,172
|
)
|
|
(960
|
)
|
|
(1,153
|
)
|
|||
Investments in unconsolidated subsidiaries
|
(41
|
)
|
|
(55
|
)
|
|
(29
|
)
|
|||
Purchase of businesses, net of acquired cash
|
—
|
|
|
—
|
|
|
(110
|
)
|
|||
Other
|
245
|
|
|
307
|
|
|
296
|
|
|||
Net cash used in investing activities
|
(968
|
)
|
|
(708
|
)
|
|
(996
|
)
|
for the years ended December 31,
|
2016
|
|
2015
|
|
2014
|
||||||
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
|
|
|
|
|
|
||||||
Short-term borrowing activity by original maturity:
|
|
|
|
|
|
||||||
Net repayments - maturities of 90 days or less
|
$
|
(12
|
)
|
|
$
|
(266
|
)
|
|
$
|
(516
|
)
|
Issuances - maturities longer than 90 days
|
—
|
|
|
—
|
|
|
1,007
|
|
|||
Repayments - maturities longer than 90 days
|
—
|
|
|
—
|
|
|
(1,571
|
)
|
|||
Long-term debt proceeds
|
3,536
|
|
|
1,539
|
|
|
5,591
|
|
|||
Long-term debt repaid
|
(2,393
|
)
|
|
(1,229
|
)
|
|
(1,240
|
)
|
|||
Repurchases of common stock
|
—
|
|
|
(48
|
)
|
|
(3,833
|
)
|
|||
Dividends paid
|
(6,378
|
)
|
|
(6,250
|
)
|
|
(6,035
|
)
|
|||
Sale (purchase) of subsidiary shares to/(from) noncontrolling interests (Note 6)
|
7
|
|
|
1,622
|
|
|
—
|
|
|||
Other
|
(173
|
)
|
|
(104
|
)
|
|
(242
|
)
|
|||
Net cash used in financing activities
|
(5,413
|
)
|
|
(4,736
|
)
|
|
(6,839
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(874
|
)
|
|
(686
|
)
|
|
(376
|
)
|
|||
Cash and cash equivalents:
|
|
|
|
|
|
||||||
Increase (Decrease)
|
822
|
|
|
1,735
|
|
|
(472
|
)
|
|||
Balance at beginning of year
|
3,417
|
|
|
1,682
|
|
|
2,154
|
|
|||
Balance at end of year
|
$
|
4,239
|
|
|
$
|
3,417
|
|
|
$
|
1,682
|
|
|
|
|
|
|
|
||||||
Cash Paid:
|
|
|
|
|
|
||||||
Interest
|
$
|
1,052
|
|
|
$
|
1,045
|
|
|
$
|
1,068
|
|
Income taxes
|
$
|
2,829
|
|
|
$
|
2,771
|
|
|
$
|
3,577
|
|
Note 1.
|
Note 2.
|
Note 3.
|
|
|
Goodwill
|
|
Other Intangible
Assets, net
|
||||||||||||
(in millions)
|
December 31, 2016
|
|
December 31, 2015
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||
European Union
|
$
|
1,238
|
|
|
$
|
1,310
|
|
|
$
|
479
|
|
|
$
|
516
|
|
Eastern Europe, Middle East & Africa
|
372
|
|
|
374
|
|
|
200
|
|
|
201
|
|
||||
Asia
|
3,596
|
|
|
3,581
|
|
|
1,074
|
|
|
1,087
|
|
||||
Latin America & Canada
|
2,118
|
|
|
2,150
|
|
|
717
|
|
|
819
|
|
||||
Total
|
$
|
7,324
|
|
|
$
|
7,415
|
|
|
$
|
2,470
|
|
|
$
|
2,623
|
|
(in millions)
|
|
European
Union |
|
Eastern Europe,
Middle East
&
Africa |
|
Asia
|
|
Latin
America & Canada |
|
Total
|
||||||||||
Balance at January 1, 2015
|
|
$
|
1,439
|
|
|
$
|
476
|
|
|
$
|
3,904
|
|
|
$
|
2,569
|
|
|
$
|
8,388
|
|
Changes due to:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Currency
|
|
(129
|
)
|
|
(102
|
)
|
|
(323
|
)
|
|
(419
|
)
|
|
(973
|
)
|
|||||
Balance at December 31, 2015
|
|
1,310
|
|
|
374
|
|
|
3,581
|
|
|
2,150
|
|
|
7,415
|
|
|||||
Changes due to:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Currency
|
|
(72
|
)
|
|
(2
|
)
|
|
15
|
|
|
(32
|
)
|
|
(91
|
)
|
|||||
Balance at December 31, 2016
|
|
$
|
1,238
|
|
|
$
|
372
|
|
|
$
|
3,596
|
|
|
$
|
2,118
|
|
|
$
|
7,324
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||
(in millions)
|
Gross
Carrying Amount |
|
|
Accumulated
Amortization |
|
|
Gross
Carrying Amount |
|
|
Accumulated
Amortization |
|
||||
Non-amortizable intangible assets
|
$
|
1,455
|
|
|
|
|
$
|
1,527
|
|
|
|
||||
Amortizable intangible assets
|
1,598
|
|
|
$
|
583
|
|
|
1,609
|
|
|
$
|
513
|
|
||
Total other intangible assets
|
$
|
3,053
|
|
|
$
|
583
|
|
|
$
|
3,136
|
|
|
$
|
513
|
|
Description (dollars in millions)
|
Gross
Carrying Amount |
Initial Estimated
Useful Lives |
|
Weighted-Average
Remaining Useful Life |
||
Trademarks
|
$
|
1,364
|
|
2 - 40 years
|
|
20 years
|
Distribution networks
|
147
|
|
5 - 30 years
|
|
10 years
|
|
Other (including farmer contracts and intellectual property rights)
|
87
|
|
4 - 17 years
|
|
10 years
|
|
|
$
|
1,598
|
|
|
|
|
Note 4.
|
|
|
For the Years Ended December 31,
|
|||||
(in millions)
|
|
2016
|
2015
|
||||
|
|
|
|
||||
Net revenues
|
|
$
|
3,985
|
|
$
|
4,172
|
|
Note 5.
|
(in millions)
|
2015
|
|
2014
|
||||
Separation programs:
|
|
|
|
||||
European Union
|
$
|
68
|
|
|
$
|
351
|
|
Eastern Europe, Middle East & Africa
|
—
|
|
|
2
|
|
||
Asia
|
—
|
|
|
35
|
|
||
Latin America & Canada
|
—
|
|
|
3
|
|
||
Total separation programs
|
68
|
|
|
391
|
|
||
Asset impairment charges:
|
|
|
|
||||
European Union
|
—
|
|
|
139
|
|
||
Latin America & Canada
|
—
|
|
|
5
|
|
||
Total asset impairment charges
|
—
|
|
|
144
|
|
||
Asset impairment and exit costs
|
$
|
68
|
|
|
$
|
535
|
|
Note 6.
|
Note 7.
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||
(in millions)
|
Amount Outstanding
|
|
|
Average Year-End Rate
|
|
|
Amount Outstanding
|
|
|
Average Year-End Rate
|
|
||
Commercial paper
|
$
|
—
|
|
|
—
|
%
|
|
$
|
—
|
|
|
—
|
%
|
Bank loans
|
643
|
|
|
5.0
|
|
|
825
|
|
|
6.1
|
|
||
|
$
|
643
|
|
|
|
|
$
|
825
|
|
|
|
|
December 31,
|
||||||
(in millions)
|
2016
|
|
2015
|
||||
U.S. dollar notes, 1.125% to 6.375% (average interest rate 3.662%), due through 2044
|
$
|
19,857
|
|
|
$
|
18,091
|
|
Foreign currency obligations:
|
|
|
|
||||
Euro notes, 1.750% to 3.125% (average interest rate 2.400%), due through 2036
|
6,828
|
|
|
7,423
|
|
||
Swiss franc notes, 0.750% to 2.000% (average interest rate 1.269%), due through 2024
|
1,312
|
|
|
1,690
|
|
||
Other (average interest rate 3.162%), due through 2024
|
427
|
|
|
451
|
|
||
|
28,424
|
|
|
27,655
|
|
||
Less current portion of long-term debt
|
2,573
|
|
|
2,405
|
|
||
|
$
|
25,851
|
|
|
$
|
25,250
|
|
(in millions)
|
|
|
|
|
|
|
|
|
Type
|
|
Face Value
|
|
Interest
Rate |
|
Issuance
|
|
Maturity
|
U.S. dollar notes
|
|
$550
|
|
1.625%
|
|
March 2012
|
|
March 2017
|
U.S. dollar notes
|
|
$750
|
|
1.125%
|
|
August 2012
|
|
August 2017
|
U.S. dollar notes
|
|
$500
|
|
1.250%
|
|
August 2015
|
|
August 2017
|
U.S. dollar notes
|
|
$500
|
|
1.250%
|
|
November 2014
|
|
November 2017
|
U.S. dollar notes
|
|
$2,500
|
|
5.650%
|
|
May 2008
|
|
May 2018
|
U.S. dollar notes
|
|
$750
|
|
1.875%
|
|
November 2013
|
|
January 2019
|
U.S. dollar notes
|
|
$500
|
|
1.375%
|
|
February 2016
|
|
February 2019
|
U.S. dollar notes
|
|
$1,000
|
|
4.500%
|
|
March 2010
|
|
March 2020
|
U.S. dollar notes
|
|
$750
|
|
1.875%
|
|
February 2016
|
|
February 2021
|
U.S. dollar notes
|
|
$350
|
|
4.125%
|
|
May 2011
|
|
May 2021
|
U.S. dollar notes
|
|
$750
|
|
2.900%
|
|
November 2011
|
|
November 2021
|
U.S. dollar notes
|
|
$750
|
|
2.500%
|
|
August 2012
|
|
August 2022
|
U.S. dollar notes
|
|
$600
|
|
2.625%
|
|
March 2013
|
|
March 2023
|
U.S. dollar notes
|
|
$500
|
|
2.125%
|
|
May 2016
|
|
May 2023
|
U.S. dollar notes
|
|
$500
|
|
3.600%
|
|
November 2013
|
|
November 2023
|
U.S. dollar notes
|
|
$750
|
|
3.250%
|
|
November 2014
|
|
November 2024
|
U.S. dollar notes
|
|
$750
|
|
3.375%
|
|
August 2015
|
|
August 2025
|
U.S. dollar notes
|
|
$750
|
|
2.750%
|
|
February 2016
|
|
February 2026
|
U.S. dollar notes
|
|
$1,500
|
|
6.375%
|
|
May 2008
|
|
May 2038
|
U.S. dollar notes
|
|
$750
|
|
4.375%
|
|
November 2011
|
|
November 2041
|
U.S. dollar notes
|
|
$700
|
|
4.500%
|
|
March 2012
|
|
March 2042
|
U.S. dollar notes
|
|
$750
|
|
3.875%
|
|
August 2012
|
|
August 2042
|
U.S. dollar notes
|
|
$850
|
|
4.125%
|
|
March 2013
|
|
March 2043
|
U.S. dollar notes
|
|
$750
|
|
4.875%
|
|
November 2013
|
|
November 2043
|
U.S. dollar notes
|
|
$750
|
|
4.250%
|
|
November 2014
|
|
November 2044
|
U.S. dollar notes
|
|
$500
|
|
4.250%
|
|
May 2016(a)
|
|
November 2044
|
EURO notes
|
(b)
|
€750 (approximately $951)
|
|
2.125%
|
|
May 2012
|
|
May 2019
|
EURO notes
|
(b)
|
€1,250 (approximately $1,621)
|
|
1.750%
|
|
March 2013
|
|
March 2020
|
EURO notes
|
(b)
|
€750 (approximately $1,029)
|
|
1.875%
|
|
March 2014
|
|
March 2021
|
EURO notes
|
(b)
|
€600 (approximately $761)
|
|
2.875%
|
|
May 2012
|
|
May 2024
|
EURO notes
|
(b)
|
€750 (approximately $972)
|
|
2.750%
|
|
March 2013
|
|
March 2025
|
EURO notes
|
(b)
|
€1,000 (approximately $1,372)
|
|
2.875%
|
|
March 2014
|
|
March 2026
|
EURO notes
|
(b)
|
€500 (approximately $697)
|
|
2.875%
|
|
May 2014
|
|
May 2029
|
EURO notes
|
(b)
|
€500 (approximately $648)
|
|
3.125%
|
|
June 2013
|
|
June 2033
|
EURO notes
|
(b)
|
€500 (approximately $578)
|
|
2.000%
|
|
May 2016
|
|
May 2036
|
Swiss franc notes
|
(b)
|
CHF200 (approximately $217)
|
|
0.875%
|
|
March 2013
|
|
March 2019
|
Swiss franc notes
|
(b)
|
CHF275 (approximately $311)
|
|
0.750%
|
|
May 2014
|
|
December 2019
|
Swiss franc notes
|
(b)
|
CHF325 (approximately $334)
|
|
1.000%
|
|
September 2012
|
|
September 2020
|
Swiss franc notes
|
(b)
|
CHF300 (approximately $335)
|
|
2.000%
|
|
December 2011
|
|
December 2021
|
Swiss franc notes
|
(b)
|
CHF250 (approximately $283)
|
|
1.625%
|
|
May 2014
|
|
May 2024
|
|
|
|
|
|
|
|
|
|
(in millions)
|
|
||
2017
|
$
|
2,573
|
|
2018
|
2,506
|
|
|
2019
|
2,500
|
|
|
2020
|
2,623
|
|
|
2021
|
2,926
|
|
|
2022-2026
|
7,430
|
|
|
2027-2031
|
522
|
|
|
Thereafter
|
7,594
|
|
|
|
28,674
|
|
|
Debt discounts
|
(250
|
)
|
|
Total long-term debt
|
$
|
28,424
|
|
Type
(in billions of dollars)
|
Committed
Credit Facilities |
|
Commercial
Paper |
||||
364-day revolving credit, expiring February 7, 2017
|
$
|
2.0
|
|
|
|
||
Multi-year revolving credit, expiring February 28, 2021
|
2.5
|
|
|
|
|||
Multi-year revolving credit, expiring October 1, 2020
(1)
|
3.5
|
|
|
|
|||
Total facilities
|
$
|
8.0
|
|
|
|
||
Commercial paper outstanding
|
|
|
$
|
—
|
|
Note 8.
|
|
Shares Issued
|
|
Shares
Repurchased |
|
Shares
Outstanding |
|||
Balances, January 1, 2014
|
2,109,316,331
|
|
|
(520,313,919
|
)
|
|
1,589,002,412
|
|
Repurchase of shares
|
|
|
(45,206,473
|
)
|
|
(45,206,473
|
)
|
|
Issuance of stock awards and exercise of stock options
|
|
|
3,103,757
|
|
|
3,103,757
|
|
|
Balances, December 31, 2014
|
2,109,316,331
|
|
|
(562,416,635
|
)
|
|
1,546,899,696
|
|
Issuance of stock awards
|
|
|
2,444,373
|
|
|
2,444,373
|
|
|
Balances, December 31, 2015
|
2,109,316,331
|
|
|
(559,972,262
|
)
|
|
1,549,344,069
|
|
Issuance of stock awards
|
|
|
2,041,478
|
|
|
2,041,478
|
|
|
Balances, December 31, 2016
|
2,109,316,331
|
|
|
(557,930,784
|
)
|
|
1,551,385,547
|
|
Note 9.
|
|
Number of
Shares |
|
Weighted-
Average Grant Date Fair Value Per Share |
|||
Balance at January 1, 2016
|
5,702,000
|
|
|
$
|
82.92
|
|
Granted
|
1,212,600
|
|
|
89.03
|
|
|
Vested
|
(2,302,525
|
)
|
|
87.81
|
|
|
Forfeited
|
(111,085
|
)
|
|
82.38
|
|
|
Balance at December 31, 2016
|
4,500,990
|
|
|
$
|
82.08
|
|
(in millions, except per RSU award granted)
|
Total Weighted-Average Grant Date Fair Value of RSU Awards Granted
|
|
Weighted-Average Grant Date Fair Value Per RSU Award Granted
|
Compensation Expense related to RSU Awards
|
||||||
2016
|
$
|
108
|
|
|
$
|
89.03
|
|
$
|
126
|
|
2015
|
$
|
126
|
|
|
$
|
82.28
|
|
$
|
166
|
|
2014
|
$
|
189
|
|
|
$
|
77.79
|
|
$
|
210
|
|
(dollars in millions)
|
Shares of RSU Awards that Vested
|
|
Grant Date Fair Value of Vested Shares of RSU Awards
|
Total Fair Value of RSU Awards that Vested
|
|||||
2016
|
2,302,525
|
|
|
$
|
202
|
|
$
|
210
|
|
2015
|
2,711,974
|
|
|
$
|
217
|
|
$
|
224
|
|
2014
|
3,974,560
|
|
|
$
|
255
|
|
$
|
320
|
|
|
Number of
Shares |
|
Grant Date
Fair Value Subject to TSR Performance Factor Per Share |
Grant Date
Fair Value Subject to Other Performance Factors Per Share |
|||||
Balance at January 1, 2016
|
—
|
|
|
$
|
—
|
|
$
|
—
|
|
Granted
|
428,400
|
|
|
104.60
|
|
89.02
|
|
||
Vested
|
—
|
|
|
—
|
|
—
|
|
||
Forfeited
|
(830
|
)
|
|
104.60
|
|
89.02
|
|
||
Balance at December 31, 2016
|
427,570
|
|
|
$
|
104.60
|
|
$
|
89.02
|
|
Note 10.
|
|
For the Years Ended December 31,
|
||||||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
||||||
Net earnings attributable to PMI
|
$
|
6,967
|
|
|
$
|
6,873
|
|
|
$
|
7,493
|
|
Less distributed and undistributed earnings attributable to share-based payment awards
|
19
|
|
|
24
|
|
|
34
|
|
|||
Net earnings for basic and diluted EPS
|
$
|
6,948
|
|
|
$
|
6,849
|
|
|
$
|
7,459
|
|
Weighted-average shares for basic and diluted EPS
|
1,551
|
|
|
1,549
|
|
|
1,566
|
|
Note 11.
|
(in millions)
|
2016
|
|
2015
|
|
2014
|
||||||
Earnings before income taxes
|
$
|
9,924
|
|
|
$
|
9,615
|
|
|
$
|
10,650
|
|
Provision for income taxes:
|
|
|
|
|
|
||||||
United States federal and state:
|
|
|
|
|
|
||||||
Current
|
$
|
(39
|
)
|
|
$
|
(56
|
)
|
|
$
|
(56
|
)
|
Deferred
|
293
|
|
|
117
|
|
|
162
|
|
|||
Total United States
|
254
|
|
|
61
|
|
|
106
|
|
|||
Outside United States:
|
|
|
|
|
|
||||||
Current
|
2,625
|
|
|
2,762
|
|
|
3,215
|
|
|||
Deferred
|
(111
|
)
|
|
(135
|
)
|
|
(224
|
)
|
|||
Total outside United States
|
2,514
|
|
|
2,627
|
|
|
2,991
|
|
|||
Total provision for income taxes
|
$
|
2,768
|
|
|
$
|
2,688
|
|
|
$
|
3,097
|
|
(in millions)
|
2016
|
|
2015
|
|
2014
|
||||||
Balance at January 1,
|
$
|
88
|
|
|
$
|
123
|
|
|
$
|
114
|
|
Additions based on tax positions related to the current year
|
13
|
|
|
17
|
|
|
20
|
|
|||
Additions for tax positions of previous years
|
1
|
|
|
6
|
|
|
11
|
|
|||
Reductions for tax positions of prior years
|
(7
|
)
|
|
(42
|
)
|
|
(3
|
)
|
|||
Reductions due to lapse of statute of limitations
|
(14
|
)
|
|
(7
|
)
|
|
(8
|
)
|
|||
Settlements
|
(2
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|||
Other
|
—
|
|
|
(8
|
)
|
|
(8
|
)
|
|||
Balance at December 31,
|
$
|
79
|
|
|
$
|
88
|
|
|
$
|
123
|
|
(in millions)
|
December 31, 2016
|
|
|
December 31, 2015
|
|
|
December 31, 2014
|
|
|||
Unrecognized tax benefits
|
$
|
79
|
|
|
$
|
88
|
|
|
$
|
123
|
|
Accrued interest and penalties
|
15
|
|
|
28
|
|
|
40
|
|
|||
Tax credits and other indirect benefits
|
(31
|
)
|
|
(40
|
)
|
|
(54
|
)
|
|||
Liability for tax contingencies
|
$
|
63
|
|
|
$
|
76
|
|
|
$
|
109
|
|
|
2016
|
|
2015
|
|
2014
|
|||
U.S. federal statutory rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
Increase (decrease) resulting from:
|
|
|
|
|
|
|||
Foreign rate differences
|
(12.6
|
)
|
|
(12.3
|
)
|
|
(11.2
|
)
|
Dividend repatriation cost
|
5.8
|
|
|
5.7
|
|
|
5.0
|
|
Other
|
(0.3
|
)
|
|
(0.4
|
)
|
|
0.3
|
|
Effective tax rate
|
27.9
|
%
|
|
28.0
|
%
|
|
29.1
|
%
|
|
At December 31,
|
||||||
(in millions)
|
2016
|
|
2015
|
||||
Deferred income tax assets:
|
|
|
|
||||
Accrued postretirement and postemployment benefits
|
$
|
287
|
|
|
$
|
275
|
|
Accrued pension costs
|
256
|
|
|
230
|
|
||
Inventory
|
241
|
|
|
174
|
|
||
Accrued liabilities
|
137
|
|
|
153
|
|
||
Other
|
173
|
|
|
164
|
|
||
Total deferred income tax assets
|
1,094
|
|
|
996
|
|
||
Deferred income tax liabilities:
|
|
|
|
||||
Trade names
|
(554
|
)
|
|
(593
|
)
|
||
Property, plant and equipment
|
(217
|
)
|
|
(218
|
)
|
||
Unremitted earnings
|
(636
|
)
|
|
(554
|
)
|
||
Foreign exchange
|
(725
|
)
|
|
(532
|
)
|
||
Total deferred income tax liabilities
|
(2,132
|
)
|
|
(1,897
|
)
|
||
Net deferred income tax liabilities
|
$
|
(1,038
|
)
|
|
$
|
(901
|
)
|
Note 12.
|
|
For the Years Ended December 31,
|
||||||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
||||||
Net revenues:
|
|
|
|
|
|
||||||
European Union
|
$
|
27,129
|
|
|
$
|
26,563
|
|
|
$
|
30,517
|
|
Eastern Europe, Middle East & Africa
|
18,286
|
|
|
18,328
|
|
|
20,469
|
|
|||
Asia
|
20,531
|
|
|
19,469
|
|
|
19,255
|
|
|||
Latin America & Canada
|
9,007
|
|
|
9,548
|
|
|
9,865
|
|
|||
Net revenues
(1)
|
$
|
74,953
|
|
|
$
|
73,908
|
|
|
$
|
80,106
|
|
|
For the Years Ended December 31,
|
||||||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
||||||
Earnings before income taxes:
|
|
|
|
|
|
||||||
Operating companies income:
|
|
|
|
|
|
||||||
European Union
|
$
|
3,994
|
|
|
$
|
3,576
|
|
|
$
|
3,815
|
|
Eastern Europe, Middle East & Africa
|
3,016
|
|
|
3,425
|
|
|
4,033
|
|
|||
Asia
|
3,196
|
|
|
2,886
|
|
|
3,187
|
|
|||
Latin America & Canada
|
938
|
|
|
1,085
|
|
|
1,030
|
|
|||
Amortization of intangibles
|
(74
|
)
|
|
(82
|
)
|
|
(93
|
)
|
|||
General corporate expenses
|
(161
|
)
|
|
(162
|
)
|
|
(165
|
)
|
|||
Less:
|
|
|
|
|
|
||||||
Equity (income)/loss in unconsolidated subsidiaries, net
|
(94
|
)
|
|
(105
|
)
|
|
(105
|
)
|
|||
Operating income
|
10,815
|
|
|
10,623
|
|
|
11,702
|
|
|||
Interest expense, net
|
(891
|
)
|
|
(1,008
|
)
|
|
(1,052
|
)
|
|||
Earnings before income taxes
|
$
|
9,924
|
|
|
$
|
9,615
|
|
|
$
|
10,650
|
|
|
For the Years Ended December 31,
|
||||||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
||||||
Depreciation expense:
|
|
|
|
|
|
||||||
European Union
|
$
|
247
|
|
|
$
|
230
|
|
|
$
|
206
|
|
Eastern Europe, Middle East & Africa
|
150
|
|
|
163
|
|
|
212
|
|
|||
Asia
|
184
|
|
|
184
|
|
|
278
|
|
|||
Latin America & Canada
|
79
|
|
|
85
|
|
|
90
|
|
|||
|
660
|
|
|
662
|
|
|
786
|
|
|||
Other
|
9
|
|
|
10
|
|
|
10
|
|
|||
Total depreciation expense
|
$
|
669
|
|
|
$
|
672
|
|
|
$
|
796
|
|
|
For the Years Ended December 31,
|
||||||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
||||||
Capital expenditures:
|
|
|
|
|
|
||||||
European Union
|
$
|
665
|
|
|
$
|
497
|
|
|
$
|
537
|
|
Eastern Europe, Middle East & Africa
|
223
|
|
|
147
|
|
|
216
|
|
|||
Asia
|
180
|
|
|
185
|
|
|
272
|
|
|||
Latin America & Canada
|
103
|
|
|
130
|
|
|
125
|
|
|||
|
1,171
|
|
|
959
|
|
|
1,150
|
|
|||
Other
|
1
|
|
|
1
|
|
|
3
|
|
|||
Total capital expenditures
|
$
|
1,172
|
|
|
$
|
960
|
|
|
$
|
1,153
|
|
|
At December 31,
|
||||||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
||||||
Long-lived assets:
|
|
|
|
|
|
||||||
European Union
|
$
|
3,282
|
|
|
$
|
3,129
|
|
|
$
|
3,242
|
|
Eastern Europe, Middle East & Africa
|
866
|
|
|
743
|
|
|
836
|
|
|||
Asia
|
1,916
|
|
|
1,743
|
|
|
1,838
|
|
|||
Latin America & Canada
|
765
|
|
|
605
|
|
|
704
|
|
|||
Total long-lived assets
|
6,829
|
|
|
6,220
|
|
|
6,620
|
|
|||
Other
|
750
|
|
|
644
|
|
|
269
|
|
|||
Total property, plant and equipment, net and Other assets
|
$
|
7,579
|
|
|
$
|
6,864
|
|
|
$
|
6,889
|
|
•
|
Asset Impairment and Exit Costs -
See Note 5.
Asset Impairment and Exit Costs
for a breakdown of asset impairment and exit costs by segment.
|
•
|
Acquisitions and Other Business Arrangements -
For further details, see Note 6.
Acquisitions and Other Business Arrangements.
|
Note 13.
|
|
Pension
|
|
|
|
|
||||||||||||||||||
|
U.S. Plans
|
|
Non-U.S. Plans
|
|
Postretirement
|
||||||||||||||||||
(in millions)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||||||
Benefit obligation at January 1,
|
$
|
389
|
|
|
$
|
438
|
|
|
$
|
7,697
|
|
|
$
|
7,638
|
|
|
$
|
211
|
|
|
$
|
238
|
|
Service cost
|
5
|
|
|
5
|
|
|
202
|
|
|
200
|
|
|
3
|
|
|
4
|
|
||||||
Interest cost
|
17
|
|
|
17
|
|
|
129
|
|
|
139
|
|
|
9
|
|
|
9
|
|
||||||
Benefits paid
|
(18
|
)
|
|
(51
|
)
|
|
(222
|
)
|
|
(225
|
)
|
|
(10
|
)
|
|
(11
|
)
|
||||||
Settlement and curtailment
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(16
|
)
|
|
—
|
|
|
—
|
|
||||||
Actuarial losses (gains)
|
12
|
|
|
(20
|
)
|
|
415
|
|
|
261
|
|
|
15
|
|
|
(12
|
)
|
||||||
Currency
|
—
|
|
|
—
|
|
|
(329
|
)
|
|
(365
|
)
|
|
(2
|
)
|
|
(17
|
)
|
||||||
Other
|
—
|
|
|
—
|
|
|
91
|
|
|
65
|
|
|
1
|
|
|
—
|
|
||||||
Benefit obligation at December 31,
|
405
|
|
|
389
|
|
|
7,982
|
|
|
7,697
|
|
|
227
|
|
|
211
|
|
||||||
Fair value of plan assets at January 1,
|
298
|
|
|
312
|
|
|
6,106
|
|
|
6,410
|
|
|
|
|
|
||||||||
Actual return on plan assets
|
13
|
|
|
—
|
|
|
309
|
|
|
56
|
|
|
|
|
|
||||||||
Employer contributions
|
4
|
|
|
37
|
|
|
187
|
|
|
117
|
|
|
|
|
|
||||||||
Employee contributions
|
—
|
|
|
—
|
|
|
39
|
|
|
37
|
|
|
|
|
|
||||||||
Benefits paid
|
(18
|
)
|
|
(51
|
)
|
|
(222
|
)
|
|
(225
|
)
|
|
|
|
|
||||||||
Settlement and curtailment
|
—
|
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
|
|
|
|
||||||||
Currency
|
—
|
|
|
—
|
|
|
(259
|
)
|
|
(275
|
)
|
|
|
|
|
||||||||
Fair value of plan assets at December 31,
|
297
|
|
|
298
|
|
|
6,160
|
|
|
6,106
|
|
|
|
|
|
||||||||
Net pension and postretirement liability recognized at December 31,
|
$
|
(108
|
)
|
|
$
|
(91
|
)
|
|
$
|
(1,822
|
)
|
|
$
|
(1,591
|
)
|
|
$
|
(227
|
)
|
|
$
|
(211
|
)
|
|
Pension
|
|
Postretirement
|
||||||||||||
(in millions)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Other assets
|
$
|
33
|
|
|
$
|
47
|
|
|
|
|
|
||||
Accrued liabilities — employment costs
|
(23
|
)
|
|
(23
|
)
|
|
$
|
(10
|
)
|
|
$
|
(9
|
)
|
||
Long-term employment costs
|
(1,940
|
)
|
|
(1,706
|
)
|
|
(217
|
)
|
|
(202
|
)
|
||||
|
$
|
(1,930
|
)
|
|
$
|
(1,682
|
)
|
|
$
|
(227
|
)
|
|
$
|
(211
|
)
|
|
Pension
|
|
|
|
|
||||||||||||
|
U.S. Plans
|
|
Non-U.S. Plans
|
|
Postretirement
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||
Discount rate
|
4.07
|
%
|
|
4.30
|
%
|
|
1.39
|
%
|
|
1.68
|
%
|
|
3.68
|
%
|
|
4.45
|
%
|
Rate of compensation increase
|
3.00
|
|
|
3.00
|
|
|
1.61
|
|
|
1.98
|
|
|
|
|
|
||
Health care cost trend rate assumed for next year
|
|
|
|
|
|
|
|
|
7.15
|
|
|
6.23
|
|
||||
Ultimate trend rate
|
|
|
|
|
|
|
|
|
5.08
|
|
|
4.75
|
|
||||
Year that rate reaches the ultimate trend rate
|
|
|
|
|
|
|
|
|
2029
|
|
2029
|
|
Pension
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
|
U.S. Plans
|
|
Non-U.S. Plans
|
|
Postretirement
|
||||||||||||||||||||||||||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
|
2016
|
|
2015
|
|
2014
|
|
2016
|
|
2015
|
|
2014
|
||||||||||||||||||
Service cost
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
202
|
|
|
$
|
200
|
|
|
$
|
211
|
|
|
$
|
3
|
|
|
$
|
4
|
|
|
$
|
4
|
|
Interest cost
|
17
|
|
|
17
|
|
|
17
|
|
|
129
|
|
|
139
|
|
|
205
|
|
|
9
|
|
|
9
|
|
|
10
|
|
|||||||||
Expected return on plan assets
|
(14
|
)
|
|
(15
|
)
|
|
(16
|
)
|
|
(332
|
)
|
|
(325
|
)
|
|
(357
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Net losses
|
9
|
|
|
14
|
|
|
6
|
|
|
177
|
|
|
180
|
|
|
115
|
|
|
2
|
|
|
4
|
|
|
2
|
|
|||||||||
Prior service cost
|
—
|
|
|
—
|
|
|
1
|
|
|
4
|
|
|
4
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||||||||
Settlement and curtailment
|
—
|
|
|
1
|
|
|
5
|
|
|
4
|
|
|
2
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Net periodic pension and postretirement costs
|
$
|
17
|
|
|
$
|
22
|
|
|
$
|
18
|
|
|
$
|
184
|
|
|
$
|
200
|
|
|
$
|
180
|
|
|
$
|
14
|
|
|
$
|
17
|
|
|
$
|
15
|
|
|
Pension
|
|
|
|
|
|
|
|||||||||||||||||||
|
U.S. Plans
|
|
Non-U.S. Plans
|
|
Postretirement
|
|||||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2016
|
|
2015
|
|
2014
|
|
2016
|
|
2015
|
|
2014
|
|||||||||
Discount rate
|
4.30
|
%
|
|
3.95
|
%
|
|
4.80
|
%
|
|
1.68
|
%
|
|
1.92
|
%
|
|
3.09
|
%
|
|
4.45
|
%
|
|
4.20
|
%
|
|
5.01
|
%
|
Expected rate of return on plan assets
|
4.60
|
|
|
5.10
|
|
|
5.70
|
|
|
5.39
|
|
|
5.38
|
|
|
5.63
|
|
|
|
|
|
|
|
|||
Rate of compensation increase
|
3.00
|
|
|
3.00
|
|
|
3.00
|
|
|
1.98
|
|
|
2.06
|
|
|
2.34
|
|
|
|
|
|
|
|
|||
Health care cost trend rate
|
|
|
|
|
|
|
|
|
|
|
|
|
6.23
|
|
|
6.62
|
|
|
6.60
|
|
Asset Category
(in millions)
|
At December 31, 2016
|
|
Quoted Prices
In Active Markets for Identical Assets/Liabilities (Level 1) |
|
Significant
Other Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs
(Level 3)
|
||||||||
Cash and cash equivalents
|
$
|
8
|
|
|
$
|
8
|
|
|
|
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
U.S. securities
|
131
|
|
|
131
|
|
|
|
|
|
||||||
International securities
|
432
|
|
|
432
|
|
|
|
|
|
||||||
Investment funds
(a)
|
5,270
|
|
|
3,530
|
|
|
$
|
1,740
|
|
|
|
||||
International government bonds
|
309
|
|
|
309
|
|
|
|
|
|
||||||
Other
|
10
|
|
|
10
|
|
|
|
|
|
||||||
Total assets in the fair value hierarchy
|
$
|
6,160
|
|
|
$
|
4,420
|
|
|
$
|
1,740
|
|
|
$
|
—
|
|
Investment funds measured at net asset value
(b)
|
297
|
|
|
|
|
|
|
|
|||||||
Total assets
|
$
|
6,457
|
|
|
|
|
|
|
|
Asset Category
(in millions)
|
At December 31, 2015
|
|
Quoted Prices
In Active Markets for Identical Assets/Liabilities (Level 1) |
|
Significant
Other Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
||||||||
Cash and cash equivalents
|
$
|
225
|
|
|
$
|
225
|
|
|
|
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
U.S. securities
|
120
|
|
|
120
|
|
|
|
|
|
||||||
International securities
|
409
|
|
|
409
|
|
|
|
|
|
||||||
Investment funds
(a)
|
5,039
|
|
|
3,446
|
|
|
1,593
|
|
|
|
|||||
International government bonds
|
289
|
|
|
289
|
|
|
|
|
|
||||||
Other
|
24
|
|
|
24
|
|
|
|
|
|
||||||
Total assets in the fair value hierarchy
|
$
|
6,106
|
|
|
$
|
4,513
|
|
|
$
|
1,593
|
|
|
$
|
—
|
|
Investment funds measured at net asset value
(b)
|
298
|
|
|
|
|
|
|
|
|||||||
Total assets
|
$
|
6,404
|
|
|
|
|
|
|
|
(in millions)
|
U.S. Plans
|
|
Non-U.S. Plans
|
||||
2017
|
$
|
18
|
|
|
$
|
247
|
|
2018
|
18
|
|
|
272
|
|
||
2019
|
24
|
|
|
265
|
|
||
2020
|
22
|
|
|
280
|
|
||
2021
|
21
|
|
|
300
|
|
||
2022 - 2026
|
124
|
|
|
1,675
|
|
|
One-Percentage-Point Increase
|
|
|
One-Percentage-Point Decrease
|
|
Effect on total service and interest cost
|
23.9
|
%
|
|
(18.1
|
)%
|
Effect on postretirement benefit obligation
|
19.4
|
|
|
(15.3
|
)
|
(in millions)
|
Pension
|
|
Post-
retirement |
|
Post-
employment |
|
Total
|
||||||||
Net losses
|
$
|
(3,314
|
)
|
|
$
|
(73
|
)
|
|
$
|
(713
|
)
|
|
$
|
(4,100
|
)
|
Prior service cost
|
(53
|
)
|
|
4
|
|
|
—
|
|
|
(49
|
)
|
||||
Net transition obligation
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
||||
Deferred income taxes
|
350
|
|
|
24
|
|
|
215
|
|
|
589
|
|
||||
Losses to be amortized
|
$
|
(3,022
|
)
|
|
$
|
(45
|
)
|
|
$
|
(498
|
)
|
|
$
|
(3,565
|
)
|
(in millions)
|
Pension
|
|
Post-
retirement |
|
Post-
employment |
|
Total
|
||||||||
Net losses
|
$
|
(3,074
|
)
|
|
$
|
(61
|
)
|
|
$
|
(710
|
)
|
|
$
|
(3,845
|
)
|
Prior service cost
|
(40
|
)
|
|
5
|
|
|
—
|
|
|
(35
|
)
|
||||
Net transition obligation
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
||||
Deferred income taxes
|
320
|
|
|
20
|
|
|
213
|
|
|
553
|
|
||||
Losses to be amortized
|
$
|
(2,799
|
)
|
|
$
|
(36
|
)
|
|
$
|
(497
|
)
|
|
$
|
(3,332
|
)
|
(in millions)
|
Pension
|
|
Post-
retirement |
|
Post-
employment |
|
Total
|
||||||||
Net losses
|
$
|
(2,760
|
)
|
|
$
|
(77
|
)
|
|
$
|
(721
|
)
|
|
$
|
(3,558
|
)
|
Prior service cost
|
(45
|
)
|
|
6
|
|
|
—
|
|
|
(39
|
)
|
||||
Net transition obligation
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
||||
Deferred income taxes
|
342
|
|
|
25
|
|
|
216
|
|
|
583
|
|
||||
Losses to be amortized
|
$
|
(2,469
|
)
|
|
$
|
(46
|
)
|
|
$
|
(505
|
)
|
|
$
|
(3,020
|
)
|
(in millions)
|
Pension
|
|
Post-
retirement |
|
Post-
employment |
|
Total
|
||||||||
Amounts transferred to earnings as components of net periodic benefit cost:
|
|
|
|
|
|
|
|
||||||||
Amortization:
|
|
|
|
|
|
|
|
||||||||
Net losses
|
$
|
193
|
|
|
$
|
2
|
|
|
$
|
62
|
|
|
$
|
257
|
|
Prior service cost
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
||||
Other income/expense:
|
|
|
|
|
|
|
|
||||||||
Net losses
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||
Prior service cost
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Deferred income taxes
|
(26
|
)
|
|
—
|
|
|
(17
|
)
|
|
(43
|
)
|
||||
|
177
|
|
|
2
|
|
|
45
|
|
|
224
|
|
||||
Other movements during the year:
|
|
|
|
|
|
|
|
||||||||
Net losses
|
(437
|
)
|
|
(15
|
)
|
|
(65
|
)
|
|
(517
|
)
|
||||
Prior service cost
|
(18
|
)
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
||||
Deferred income taxes
|
55
|
|
|
4
|
|
|
19
|
|
|
78
|
|
||||
|
(400
|
)
|
|
(11
|
)
|
|
(46
|
)
|
|
(457
|
)
|
||||
Total movements in other comprehensive earnings (losses)
|
$
|
(223
|
)
|
|
$
|
(9
|
)
|
|
$
|
(1
|
)
|
|
$
|
(233
|
)
|
(in millions)
|
Pension
|
|
Post-
retirement |
|
Post-
employment |
|
Total
|
||||||||
Amounts transferred to earnings as components of net periodic benefit cost:
|
|
|
|
|
|
|
|
||||||||
Amortization:
|
|
|
|
|
|
|
|
||||||||
Net losses
|
$
|
194
|
|
|
$
|
4
|
|
|
$
|
69
|
|
|
$
|
267
|
|
Prior service cost
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||
Other income/expense:
|
|
|
|
|
|
|
|
||||||||
Net losses
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Prior service cost
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Deferred income taxes
|
(26
|
)
|
|
(2
|
)
|
|
(20
|
)
|
|
(48
|
)
|
||||
|
176
|
|
|
2
|
|
|
49
|
|
|
227
|
|
||||
Other movements during the year:
|
|
|
|
|
|
|
|
||||||||
Net losses
|
(510
|
)
|
|
12
|
|
|
(58
|
)
|
|
(556
|
)
|
||||
Deferred income taxes
|
4
|
|
|
(4
|
)
|
|
17
|
|
|
17
|
|
||||
|
(506
|
)
|
|
8
|
|
|
(41
|
)
|
|
(539
|
)
|
||||
Total movements in other comprehensive earnings (losses)
|
$
|
(330
|
)
|
|
$
|
10
|
|
|
$
|
8
|
|
|
$
|
(312
|
)
|
(in millions)
|
Pension
|
|
Post-
retirement |
|
Post-
employment |
|
Total
|
||||||||
Amounts transferred to earnings as components of net periodic benefit cost:
|
|
|
|
|
|
|
|
||||||||
Amortization:
|
|
|
|
|
|
|
|
||||||||
Net losses
|
$
|
121
|
|
|
$
|
2
|
|
|
$
|
66
|
|
|
$
|
189
|
|
Prior service cost
|
6
|
|
|
(1
|
)
|
|
—
|
|
|
5
|
|
||||
Other income/expense:
|
|
|
|
|
|
|
|
||||||||
Net losses
|
14
|
|
|
2
|
|
|
—
|
|
|
16
|
|
||||
Prior service cost
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
||||
Deferred income taxes
|
(21
|
)
|
|
(1
|
)
|
|
(20
|
)
|
|
(42
|
)
|
||||
|
125
|
|
|
2
|
|
|
46
|
|
|
173
|
|
||||
Other movements during the year:
|
|
|
|
|
|
|
|
||||||||
Net losses
|
(1,149
|
)
|
|
(34
|
)
|
|
(126
|
)
|
|
(1,309
|
)
|
||||
Prior service cost
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
||||
Deferred income taxes
|
118
|
|
|
12
|
|
|
37
|
|
|
167
|
|
||||
|
(1,036
|
)
|
|
(22
|
)
|
|
(89
|
)
|
|
(1,147
|
)
|
||||
Total movements in other comprehensive earnings (losses)
|
$
|
(911
|
)
|
|
$
|
(20
|
)
|
|
$
|
(43
|
)
|
|
$
|
(974
|
)
|
Note 14.
|
|
For the Years Ended December 31,
|
||||||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
||||||
Research and development expense
|
$
|
429
|
|
|
$
|
423
|
|
|
$
|
433
|
|
Advertising expense
|
$
|
405
|
|
|
$
|
448
|
|
|
$
|
439
|
|
Foreign currency net transaction losses
|
$
|
272
|
|
|
$
|
102
|
|
|
$
|
174
|
|
Interest expense
|
$
|
1,069
|
|
|
$
|
1,132
|
|
|
$
|
1,170
|
|
Interest income
|
(178
|
)
|
|
(124
|
)
|
|
(118
|
)
|
|||
Interest expense, net
|
$
|
891
|
|
|
$
|
1,008
|
|
|
$
|
1,052
|
|
Rent expense
|
$
|
284
|
|
|
$
|
286
|
|
|
$
|
336
|
|
(in millions)
|
|
||
2017
|
$
|
182
|
|
2018
|
119
|
|
|
2019
|
89
|
|
|
2020
|
62
|
|
|
2021
|
46
|
|
|
Thereafter
|
164
|
|
|
|
$
|
662
|
|
Note 15.
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||||||||||
|
|
|
Fair
Value
|
|
|
|
Fair
Value
|
||||||||||||
(in millions)
|
Balance Sheet Classification
|
|
2016
|
|
2015
|
|
Balance Sheet Classification
|
|
2016
|
|
2015
|
||||||||
Foreign exchange contracts designated as hedging instruments
|
Other current
assets
|
|
$
|
207
|
|
|
$
|
301
|
|
|
Other accrued
liabilities
|
|
$
|
66
|
|
|
$
|
26
|
|
|
Other assets
|
|
436
|
|
|
181
|
|
|
Other liabilities
|
|
36
|
|
|
117
|
|
||||
Foreign exchange contracts not designated as hedging instruments
|
Other current
assets
|
|
161
|
|
|
7
|
|
|
Other accrued
liabilities
|
|
61
|
|
|
29
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Other assets
|
|
9
|
|
|
85
|
|
|
Other liabilities
|
|
—
|
|
|
—
|
|
||||
Total derivatives
|
|
|
$
|
813
|
|
|
$
|
574
|
|
|
|
|
$
|
163
|
|
|
$
|
172
|
|
(pre-tax, millions)
|
For the Year Ended December 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
|
||||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
|
|
2016
|
|
2015
|
2014
|
|
||||||||||||
Derivatives in Cash Flow Hedging Relationship
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign exchange contracts
|
$
|
12
|
|
|
$
|
43
|
|
|
$
|
111
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
Net revenues
|
|
$
|
(38
|
)
|
|
$
|
149
|
|
$
|
115
|
|
|
||||||
|
|
|
|
|
|
|
Cost of sales
|
|
46
|
|
|
(3
|
)
|
—
|
|
|
|||||||||
|
|
|
|
|
|
|
Marketing, administration and research costs
|
|
(11
|
)
|
|
1
|
|
(28
|
)
|
|
|||||||||
|
|
|
|
|
|
|
Interest expense, net
|
|
(30
|
)
|
|
(31
|
)
|
(39
|
)
|
|
|||||||||
Derivatives in Net Investment Hedging Relationship
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign exchange contracts
|
296
|
|
|
253
|
|
|
269
|
|
|
|
|
|
|
|
|
|
|||||||||
Total
|
$
|
308
|
|
|
$
|
296
|
|
|
$
|
380
|
|
|
|
|
$
|
(33
|
)
|
|
$
|
116
|
|
$
|
48
|
|
|
|
|
|
|
|
|
|
|
|
For the Years Ended December 31,
|
||||||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
||||||
Gain as of January 1,
|
$
|
59
|
|
|
$
|
123
|
|
|
$
|
63
|
|
Derivative (gains)/losses transferred to earnings
|
30
|
|
|
(102
|
)
|
|
(38
|
)
|
|||
Change in fair value
|
8
|
|
|
38
|
|
|
98
|
|
|||
Gain as of December 31,
|
$
|
97
|
|
|
$
|
59
|
|
|
$
|
123
|
|
Note 16.
|
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.
|
(in millions)
|
Fair Value
At
December 31, 2016 |
|
Quoted
Prices
in Active Markets for
Identical Assets/Liabilities (Level 1) |
|
Significant Other
Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs
(Level 3) |
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
$
|
813
|
|
|
$
|
—
|
|
|
$
|
813
|
|
|
$
|
—
|
|
Pension plan assets
|
6,160
|
|
|
4,420
|
|
|
1,740
|
|
|
—
|
|
||||
Total assets in fair value hierarchy
|
$
|
6,973
|
|
|
$
|
4,420
|
|
|
$
|
2,553
|
|
|
$
|
—
|
|
Pension plan assets measured at net asset value
(a)
|
297
|
|
|
|
|
|
|
|
|||||||
Total assets
|
$
|
7,270
|
|
|
|
|
|
|
|
||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Debt
|
$
|
30,192
|
|
|
$
|
29,756
|
|
|
$
|
436
|
|
|
$
|
—
|
|
Foreign exchange contracts
|
163
|
|
|
—
|
|
|
163
|
|
|
—
|
|
||||
Total liabilities
|
$
|
30,355
|
|
|
$
|
29,756
|
|
|
$
|
599
|
|
|
$
|
—
|
|
(in millions)
|
Fair Value At
December 31, 2015 |
|
Quoted Prices in Active Markets for
Identical Assets/Liabilities (Level 1) |
|
Significant Other
Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs
(Level 3) |
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
$
|
574
|
|
|
$
|
—
|
|
|
$
|
574
|
|
|
$
|
—
|
|
Pension plan assets
|
6,106
|
|
|
4,513
|
|
|
1,593
|
|
|
—
|
|
||||
Total assets in fair value hierarchy
|
$
|
6,680
|
|
|
$
|
4,513
|
|
|
$
|
2,167
|
|
|
$
|
—
|
|
Pension plan assets measured at net asset value
(a)
|
298
|
|
|
|
|
|
|
|
|||||||
Total assets
|
$
|
6,978
|
|
|
|
|
|
|
|
||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Debt
|
$
|
29,287
|
|
|
$
|
28,822
|
|
|
$
|
465
|
|
|
$
|
—
|
|
Foreign exchange contracts
|
172
|
|
|
—
|
|
|
172
|
|
|
—
|
|
||||
Total liabilities
|
$
|
29,459
|
|
|
$
|
28,822
|
|
|
$
|
637
|
|
|
$
|
—
|
|
Note 17.
|
(Losses) Earnings
|
At December 31,
|
||||||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
||||||
Currency translation adjustments
|
$
|
(6,091
|
)
|
|
$
|
(6,129
|
)
|
|
$
|
(3,929
|
)
|
Pension and other benefits
|
(3,565
|
)
|
|
(3,332
|
)
|
|
(3,020
|
)
|
|||
Derivatives accounted for as hedges
|
97
|
|
|
59
|
|
|
123
|
|
|||
Total accumulated other comprehensive losses
|
$
|
(9,559
|
)
|
|
$
|
(9,402
|
)
|
|
$
|
(6,826
|
)
|
Note 18.
|
Note 19.
|
Type of Case
|
|
Number of Cases Pending as of
December 31, 2016 |
|
Number of Cases Pending as of
December 31, 2015 |
|
Number of Cases Pending as of
December 31, 2014 |
|||
Individual Smoking and Health Cases
|
|
64
|
|
|
68
|
|
|
63
|
|
Smoking and Health Class Actions
|
|
11
|
|
|
11
|
|
|
11
|
|
Health Care Cost Recovery Actions
|
|
16
|
|
|
16
|
|
|
15
|
|
Lights Class Actions
|
|
—
|
|
|
—
|
|
|
—
|
|
Individual Lights Cases
|
|
3
|
|
|
3
|
|
|
2
|
|
Public Civil Actions
|
|
2
|
|
|
3
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
Date
|
|
Location of
Court/Name of Plaintiff |
|
Type of
Case |
|
Verdict
|
|
Post-Trial
Developments |
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 $319) 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
Court/Name of Plaintiff |
|
Type of
Case |
|
Verdict
|
|
Post-Trial
Developments |
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 $100 million) in punitive damages, allocating CAD 46 million (approximately $35 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 $172 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
Court/Name of Plaintiff |
|
Type of
Case |
|
Verdict
|
|
Post-Trial
Developments |
May 27, 2015
|
|
Canada/Conseil Québécois Sur Le Tabac Et La Santé and Jean-Yves Blais
|
|
Class Action
|
|
On May 27, 2015, the Superior Court of the District of Montreal, Province of Quebec ruled in favor of the
Blais
class on liability and found the class members’ compensatory damages totaled approximately CAD 15.5 billion (approximately $11.8 billion), including pre-judgment interest. The trial court awarded compensatory damages on a joint and several liability basis, allocating 20% to our subsidiary (approximately CAD 3.1 billion including pre-judgment interest (approximately $2.4 billion)). The trial court awarded CAD 90,000 (approximately $68,500) in punitive damages, allocating CAD 30,000 (approximately $22,800) to our subsidiary. The trial court ordered defendants to pay CAD 1 billion (approximately $761 million) of the compensatory damage award, CAD 200 million (approximately $152 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 $172 million). The hearing for the merits appeal took place in November 2016. (See below for further detail.)
|
Date
|
|
Location of
Court/Name of Plaintiff |
|
Type of
Case |
|
Verdict
|
|
Post-Trial
Developments |
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 $6,900), plus interest, in compensatory and moral damages.
The 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.
|
•
|
64 cases brought by individual plaintiffs in Argentina (35), Brazil (16), Canada (2), Chile (6), Costa Rica (2), Italy (1), the Philippines (1) and Scotland (1), compared with 68 such cases on December 31, 2015, and 63 cases on December 31, 2014; and
|
•
|
11 cases brought on behalf of classes of individual plaintiffs in Brazil (2) and Canada (9), compared with 11 such cases on December 31, 2015 and December 31, 2014.
|
Note 20.
|
(in millions)
|
Gross Amounts Recognized
|
Gross Amount Offset in the Consolidated Balance Sheet
|
Net Amounts Presented in the Consolidated Balance Sheet
|
Gross Amounts Not Offset in the
Consolidated
Balance Sheet
|
Net Amount
|
||||||||||||||
Financial Instruments
|
Cash Collateral Received/Pledged
|
||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||
At December 31, 2016
|
|
|
|
|
|
|
|||||||||||||
Assets
|
|
|
|
|
|
|
|||||||||||||
Foreign exchange contracts
|
$
|
813
|
|
$
|
—
|
|
$
|
813
|
|
$
|
(126
|
)
|
$
|
(607
|
)
|
$
|
80
|
|
|
Liabilities
|
|
|
|
|
|
|
|||||||||||||
Foreign exchange contracts
|
$
|
163
|
|
$
|
—
|
|
$
|
163
|
|
$
|
(126
|
)
|
$
|
(31
|
)
|
$
|
6
|
|
|
At December 31, 2015
|
|
|
|
|
|
|
|||||||||||||
Assets
|
|
|
|
|
|
|
|||||||||||||
Foreign exchange contracts
|
$
|
574
|
|
$
|
—
|
|
$
|
574
|
|
$
|
(131
|
)
|
$
|
(432
|
)
|
$
|
11
|
|
|
Liabilities
|
|
|
|
|
|
|
|||||||||||||
Foreign exchange contracts
|
$
|
172
|
|
$
|
—
|
|
$
|
172
|
|
$
|
(131
|
)
|
$
|
(30
|
)
|
$
|
11
|
|
Note 21.
|
Note 22.
|
|
At December 31, 2015
|
||||||
(in millions)
|
As Reported
|
|
Retrospective Adoption
|
||||
Assets
|
|
|
|
||||
Current deferred income taxes
|
$
|
488
|
|
|
$
|
—
|
|
Noncurrent deferred income taxes
|
$
|
360
|
|
|
$
|
769
|
|
Other assets
|
$
|
1,143
|
|
|
$
|
1,143
|
|
Total assets
|
$
|
33,956
|
|
|
$
|
33,877
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Current deferred income taxes
|
$
|
206
|
|
|
$
|
—
|
|
Noncurrent deferred income taxes
|
$
|
1,543
|
|
|
$
|
1,670
|
|
Total liabilities
|
$
|
45,432
|
|
|
$
|
45,353
|
|
1.
|
retrospectively to each prior period presented; or
|
2.
|
retrospectively, with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application, with additional disclosures in reporting periods that include the date of initial application.
|
Note 23.
|
|
2016 Quarters
|
||||||||||||||
(in millions, except per share data)
|
1st
|
|
2nd
|
|
3rd
|
|
4th
|
||||||||
Net revenues
|
$
|
16,788
|
|
|
$
|
19,041
|
|
|
$
|
19,935
|
|
|
$
|
19,189
|
|
Gross profit
|
$
|
3,987
|
|
|
$
|
4,285
|
|
|
$
|
4,550
|
|
|
$
|
4,472
|
|
Net earnings attributable to PMI
|
$
|
1,530
|
|
|
$
|
1,788
|
|
|
$
|
1,938
|
|
|
$
|
1,711
|
|
Per share data:
|
|
|
|
|
|
|
|
||||||||
Basic EPS
|
$
|
0.98
|
|
|
$
|
1.15
|
|
|
$
|
1.25
|
|
|
$
|
1.10
|
|
Diluted EPS
|
$
|
0.98
|
|
|
$
|
1.15
|
|
|
$
|
1.25
|
|
|
$
|
1.10
|
|
Dividends declared
|
$
|
1.02
|
|
|
$
|
1.02
|
|
|
$
|
1.04
|
|
|
$
|
1.04
|
|
Market price:
|
|
|
|
|
|
|
|
||||||||
— High
|
$
|
99.53
|
|
|
$
|
102.55
|
|
|
$
|
104.20
|
|
|
$
|
98.21
|
|
— Low
|
$
|
84.46
|
|
|
$
|
95.91
|
|
|
$
|
96.95
|
|
|
$
|
86.78
|
|
|
|
||||||||||||||
|
2015 Quarters
|
||||||||||||||
(in millions, except per share data)
|
1st
|
|
2nd
|
|
3rd
|
|
4th
|
||||||||
Net revenues
|
$
|
17,352
|
|
|
$
|
18,763
|
|
|
$
|
19,422
|
|
|
$
|
18,371
|
|
Gross profit
|
$
|
4,387
|
|
|
$
|
4,481
|
|
|
$
|
4,544
|
|
|
$
|
4,017
|
|
Net earnings attributable to PMI
|
$
|
1,795
|
|
|
$
|
1,887
|
|
|
$
|
1,942
|
|
|
$
|
1,249
|
|
Per share data:
|
|
|
|
|
|
|
|
||||||||
Basic EPS
|
$
|
1.16
|
|
|
$
|
1.21
|
|
|
$
|
1.25
|
|
|
$
|
0.80
|
|
Diluted EPS
|
$
|
1.16
|
|
|
$
|
1.21
|
|
|
$
|
1.25
|
|
|
$
|
0.80
|
|
Dividends declared
|
$
|
1.00
|
|
|
$
|
1.00
|
|
|
$
|
1.02
|
|
|
$
|
1.02
|
|
Market price:
|
|
|
|
|
|
|
|
||||||||
— High
|
$
|
85.29
|
|
|
$
|
86.91
|
|
|
$
|
86.51
|
|
|
$
|
90.27
|
|
— Low
|
$
|
75.30
|
|
|
$
|
75.27
|
|
|
$
|
76.54
|
|
|
$
|
78.41
|
|
|
|
|
|
|
|
|
|
•
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of PMI;
|
•
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America;
|
•
|
provide reasonable assurance that receipts and expenditures of PMI are being made only in accordance with the authorization of management and directors of PMI; and
|
•
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on the consolidated financial statements.
|
/
S
/ BARRY J. MISTHAL
|
|
/S/ DR. MICHAEL ABRESCH
|
Barry J. Misthal
|
|
Dr. Michael Abresch
|
|
|
|
Lausanne, Switzerland
|
|
|
February 2, 2017
|
|
|