XML 35 R16.htm IDEA: XBRL DOCUMENT
v3.20.2

Financial Instruments | 6 Months Ended
--- | ---
Jun. 28, 2020
Financial Instruments [Abstract] |
Financial Instruments | Financial Instruments A. Fair Value Measurements Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following table presents the financial assets and liabilities measured at fair value using a market approach on a recurring basis by balance sheet categories and fair value hierarchy level as defined in Notes to Consolidated Financial Statements––Note 1E. Basis of Presentation and Significant Accounting Policies: Fair Value in our 2019 Financial Report:
|  | June 28, 2020 |  | December 31, 2019
(MILLIONS OF DOLLARS) |  | Total |  | Level 1 |  | Level 2 |  | Total |  | Level 1 |  | Level 2
Financial assets measured at fair value on a recurring basis: |  |  |  |  |  |  |  |  |  |  |  |
Short-term investments |  |  |  |  |  |  |  |  |  |  |  |
Classified as equity securities with readily determinable fair values: |  |  |  |  |  |  |  |  |  |  |  |
Money market funds(a) |  | $ | 13,033 |  |  | $ | — |  |  | $ | 13,033 |  |  | $ | 705 |  |  | $ | — |  |  | $ | 705 |
Classified as available-for-sale debt securities: |  |  |  |  |  |  |  |  |  |  |  |
Government and agency—non-U.S. |  | 6,218 |  |  | — |  |  | 6,218 |  |  | 4,863 |  |  | — |  |  | 4,863 |
Government and agency—U.S. |  | 14 |  |  | — |  |  | 14 |  |  | 811 |  |  | — |  |  | 811 |
Corporate and other |  | 1,440 |  |  | — |  |  | 1,440 |  |  | 1,013 |  |  | — |  |  | 1,013 |
|  | 7,672 |  |  | — |  |  | 7,672 |  |  | 6,687 |  |  | — |  |  | 6,687 |
Total short-term investments |  | 20,705 |  |  | — |  |  | 20,705 |  |  | 7,392 |  |  | — |  |  | 7,392 |
Other current assets |  |  |  |  |  |  |  |  |  |  |  |
Derivative assets: |  |  |  |  |  |  |  |  |  |  |  |
Interest rate contracts |  | 17 |  |  | — |  |  | 17 |  |  | 53 |  |  | — |  |  | 53 |
Foreign exchange contracts |  | 413 |  |  | — |  |  | 413 |  |  | 413 |  |  | — |  |  | 413 |
Total other current assets |  | 431 |  |  | — |  |  | 431 |  |  | 465 |  |  | — |  |  | 465 |
Long-term investments |  |  |  |  |  |  |  |  |  |  |  |
Classified as equity securities with readily determinable fair values(b) |  | 2,072 |  |  | 2,046 |  |  | 26 |  |  | 1,902 |  |  | 1,863 |  |  | 39 |
Classified as available-for-sale debt securities: |  |  |  |  |  |  |  |  |  |  |  |
Government and agency—U.S. |  | 243 |  |  | — |  |  | 243 |  |  | 303 |  |  | — |  |  | 303 |
Corporate and other |  | 11 |  |  | — |  |  | 11 |  |  | 11 |  |  | — |  |  | 11 |
|  | 254 |  |  | — |  |  | 254 |  |  | 315 |  |  | — |  |  | 315 |
Total long-term investments |  | 2,326 |  |  | 2,046 |  |  | 280 |  |  | 2,216 |  |  | 1,863 |  |  | 354 |
Other noncurrent assets |  |  |  |  |  |  |  |  |  |  |  |
Derivative assets: |  |  |  |  |  |  |  |  |  |  |  |
Interest rate contracts |  | 140 |  |  | — |  |  | 140 |  |  | 266 |  |  | — |  |  | 266 |
Foreign exchange contracts |  | 221 |  |  | — |  |  | 221 |  |  | 261 |  |  | — |  |  | 261 |
Total derivative assets |  | 362 |  |  | — |  |  | 362 |  |  | 526 |  |  | — |  |  | 526 |
Insurance contracts(c) |  | 578 |  |  | — |  |  | 578 |  |  | 575 |  |  | — |  |  | 575 |
Total other noncurrent assets |  | 940 |  |  | — |  |  | 940 |  |  | 1,102 |  |  | — |  |  | 1,102 |
Total assets |  | $ | 24,402 |  |  | $ | 2,046 |  |  | $ | 22,355 |  |  | $ | 11,176 |  |  | $ | 1,863 |  |  | $ | 9,313 |
Financial liabilities measured at fair value on a recurring basis: |  |  |  |  |  |  |  |  |  |  |  |
Other current liabilities |  |  |  |  |  |  |  |  |  |  |  |
Derivative liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  | $ | 127 |  |  | $ | — |  |  | $ | 127 |  |  | $ | 114 |  |  | $ | — |  |  | $ | 114 |
Total other current liabilities |  | 127 |  |  | — |  |  | 127 |  |  | 114 |  |  | — |  |  | 114 |
Other noncurrent liabilities |  |  |  |  |  |  |  |  |  |  |  |
Derivative liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  | 866 |  |  | — |  |  | 866 |  |  | 604 |  |  | — |  |  | 604 |
Total other noncurrent liabilities |  | 866 |  |  | — |  |  | 866 |  |  | 604 |  |  | — |  |  | 604 |
Total liabilities |  | $ | 993 |  |  | $ | — |  |  | $ | 993 |  |  | $ | 718 |  |  | $ | — |  |  | $ | 718 |
(a) | As of June 28, 2020, $11.4 billion of proceeds from the Upjohn debt transactions (see Note 7D) are invested in money market funds and included in Restricted short-term investments in the condensed consolidated balance sheet.
(b) | As of June 28, 2020, long-term equity securities of $163 million and as of December 31, 2019, long-term equity securities of $176 million were held in restricted trusts for benefits attributable to various U.S. non-qualified employee benefit plans.
(c) | Other noncurrent assets include life insurance policies held in restricted trusts attributable to the funding of various U.S. non-qualified employee benefit plans. The underlying invested assets in these insurance contracts are marketable securities, which are carried at fair value, with changes in fair value recognized in Other (income)/deductions––net in the condensed consolidated statements of income (see Note 4).
Financial Assets and Liabilities Not Measured at Fair Value on a Recurring Basis
The following table presents the financial liabilities not measured at fair value on a recurring basis, including the carrying values and estimated fair values using a market approach:
|  | June 28, 2020 |  | December 31, 2019
|  | Carrying Value |  | Estimated Fair Value |  | Carrying Value |  | Estimated Fair Value
(MILLIONS OF DOLLARS) |  |  |  | Total |  | Level 2 |  |  |  | Total |  | Level 2
Financial Liabilities |  |  |  |  |  |  |  |  |  |  |  |
Long-term debt, excluding the current portion(a) |  | $ | 50,529 |  |  | $ | 59,121 |  |  | $ | 59,121 |  |  | $ | 35,955 |  |  | $ | 40,842 |  |  | $ | 40,842 |
(a) | As of June 28, 2020, $11.4 billion of proceeds from the Upjohn debt transactions (see Note 7D) are invested in money market funds and included in Restricted short-term investments in the condensed consolidated balance sheet.
The differences between the estimated fair values and carrying values of held-to-maturity debt securities, private equity securities, and short-term borrowings not measured at fair value on a recurring basis were not significant as of June 28, 2020 or December 31, 2019. The fair value measurements of our held-to-maturity debt securities and our short-term borrowings are based on Level 2 inputs. The fair value measurements of our private equity securities, which represent investments in the life sciences sector, are based on Level 3 inputs using a market approach. In addition, as of June 28, 2020 and December 31, 2019, we had long-term receivables whose fair value is based on Level 3 inputs. As of June 28, 2020 and December 31, 2019, the differences between the estimated fair values and carrying values of these receivables were not significant. Total Short-Term and Long-Term Investments and Equity-Method Investments
The following table represents our investments by classification type:
(MILLIONS OF DOLLARS) |  | June 28, 2020 |  |  | December 31, 2019 |
Short-term investments |  |  |  |
Equity securities with readily determinable fair values(a) |  | $ | 13,033 |  |  | $ | 705 |
Available-for-sale debt securities |  | 7,672 |  |  | 6,687 |
Held-to-maturity debt securities |  | 288 |  |  | 1,133 |
Total Short-term investments |  | $ | 20,993 |  |  | $ | 8,525 |
Long-term investments |  |  |  |
Equity securities with readily determinable fair values |  | $ | 2,072 |  |  | $ | 1,902 |
Available-for-sale debt securities |  | 254 |  |  | 315 |
Held-to-maturity debt securities |  | 43 |  |  | 42 |
Private equity securities at cost |  | 772 |  |  | 756 |
Total Long-term investments |  | $ | 3,142 |  |  | $ | 3,014 |
Equity-method investments |  | 15,578 |  |  | 17,133 |
Total long-term investments and equity-method investments |  | $ | 18,720 |  |  | $ | 20,147 |
Held-to-maturity cash equivalents |  | $ | 119 |  |  | $ | 163 |
(a) | As of June 28, 2020 and December 31, 2019, equity securities with readily determinable fair values included money market funds primarily invested in U.S. Treasury and government debt. As of June 28, 2020, $11.4 billion of proceeds from the Upjohn debt transactions (see Note 7D) are invested in money market funds and included in Restricted short-term investments in the condensed consolidated balance sheet.
. B. Investments Debt Securities
At June 28, 2020, our investment securities portfolio consisted of debt securities that were virtually all investment-grade. Information on investments in debt securities at June 28, 2020 and December 31, 2019 is as follows, including, as of June 28, 2020, the contractual maturities, or as necessary, the estimated maturities, of the available-for-sale and held-to-maturity debt securities:
|  | June 28, 2020 |  | December 31, 2019
|  |  |  | Gross Unrealized |  |  |  | Maturities (in Years) |  |  |  |  | Gross Unrealized |  |
(MILLIONS OF DOLLARS) |  | Amortized Cost |  |  | Gains |  |  | Losses |  |  | Fair Value |  |  | Within 1 |  |  | Over 1 to 5 |  |  | Over 5 |  |  | Total |  |  | Amortized Cost |  |  | Gains |  |  | Losses |  |  | Fair Value |
Available-for-sale debt securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Government and agency––non-U.S. |  | $ | 6,209 |  |  | $ | 12 |  |  | $ | (3 | ) |  | $ | 6,218 |  |  | $ | 6,218 |  |  | $ | — |  |  | $ | — |  |  | $ | 6,218 |  |  | $ | 4,895 |  |  | $ | 6 |  |  | $ | (38 | ) |  | $ | 4,863 |
Government and agency––U.S. |  | 257 |  |  | 1 |  |  | (1 | ) |  | 257 |  |  | 14 |  |  | 243 |  |  | — |  |  | 257 |  |  | 1,120 |  |  | — |  |  | (6 | ) |  | 1,114 |
Corporate and other(a) |  | 1,450 |  |  | 2 |  |  | (1 | ) |  | 1,451 |  |  | 1,440 |  |  | 11 |  |  | — |  |  | 1,451 |  |  | 1,027 |  |  | — |  |  | (2 | ) |  | 1,025 |
Held-to-maturity debt securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Time deposits and other |  | 228 |  |  | — |  |  | — |  |  | 228 |  |  | 189 |  |  | 9 |  |  | 30 |  |  | 228 |  |  | 535 |  |  | — |  |  | — |  |  | 535 |
Government and agency––non-U.S. |  | 222 |  |  | — |  |  | — |  |  | 222 |  |  | 218 |  |  | — |  |  | 4 |  |  | 222 |  |  | 803 |  |  | — |  |  | — |  |  | 803 |
Total debt securities |  | $ | 8,366 |  |  | $ | 16 |  |  | $ | (5 | ) |  | $ | 8,376 |  |  | $ | 8,079 |  |  | $ | 263 |  |  | $ | 35 |  |  | $ | 8,376 |  |  | $ | 8,380 |  |  | $ | 6 |  |  | $ | (47 | ) |  | $ | 8,340 |
(a) | Primarily issued by a diverse group of corporations.
For our portfolio of available-for-sale and held-to-maturity debt securities, any expected credit losses would be immaterial to the financial statements. Equity Securities
The following table presents the calculation of the portion of unrealized gains for the period that relates to equity securities, excluding equity method investments, still held at the reporting date:
|  | Three Months Ended |  | Six Months Ended
(MILLIONS OF DOLLARS) |  | June 28, 2020 |  |  | June 30, 2019 |  |  | June 28, 2020 |  |  | June 30, 2019 |
Net gains recognized during the period on equity securities(a) |  | $ | (732 | ) |  | $ | (36 | ) |  | $ | (478 | ) |  | $ | (147 | )
Less: Net (gains)/losses recognized during the period on equity securities sold during the period |  | 1 |  |  | (6 | ) |  | (18 | ) |  | (10 | )
Net unrealized gains during the reporting period on equity securities still held at the reporting date(b) |  | $ | (733 | ) |  | $ | (31 | ) |  | $ | (459 | ) |  | $ | (137 | )
(a) | The net gains on investments in equity securities are reported in Other (income)/deductions––net. For additional information, see Note 4.
(b) Included in net unrealized gains are observable price changes on equity securities without readily determinable fair values. Since January 1, 2018, there were cumulative impairments and downward adjustments of $67 million and upward adjustments of $66 million. Impairments, downward and upward adjustments were not significant in the second quarter and the first six months of 2020 and 2019. C. Short-Term Borrowings
Short-term borrowings include:
(MILLIONS OF DOLLARS) |  | June 28, 2020 |  |  | December 31, 2019 |
Commercial paper |  | $ | 10,660 |  |  | $ | 13,915 |
Current portion of long-term debt, principal amount |  | 1,481 |  |  | 1,458 |
Other short-term borrowings, principal amount(a) |  | 956 |  |  | 860 |
Total short-term borrowings, principal amount |  | 13,097 |  |  | 16,233 |
Net fair value adjustments related to hedging and purchase accounting |  | 1 |  |  | 5 |
Net unamortized discounts, premiums and debt issuance costs |  | (14 | ) |  | (43 | )
Total Short-term borrowings, including current portion of long-term debt, carried at historical proceeds, as adjusted |  | $ | 13,084 |  |  | $ | 16,195 |
(a) Other short-term borrowings primarily include cash collateral. For additional information, see Note 7E. D. Long-Term Debt New Issuances
In the second quarter of 2020, we issued the following senior unsecured notes:
(MILLIONS OF DOLLARS) |  |  |  |
|  |  |  | Principal
Interest Rate |  | Maturity Date |  | As of June 28, 2020
Pfizer Inc.(a) |  |  |  |
0.800% |  | May 28, 2025 |  | $ | 750 |
1.700% |  | May 28, 2030 |  | 1,000 |
2.550% |  | May 28, 2040 |  | 1,000 |
2.700% |  | May 28, 2050 |  | 1,250 |
|  |  |  | $ | 4,000 |
Upjohn Inc., a wholly-owned subsidiary of Pfizer Inc.(b) |  |  |  |
1.125% |  | June 22, 2022 |  | $ | 1,000 |
1.650% |  | June 22, 2025 |  | 750 |
2.300% |  | June 22, 2027 |  | 750 |
2.700% |  | June 22, 2030 |  | 1,450 |
3.850% |  | June 22, 2040 |  | 1,500 |
4.000% |  | June 22, 2050 |  | 2,000 |
|  |  |  | $ | 7,450 |
Upjohn Finance B.V., a wholly-owned subsidiary of Upjohn Inc.(b) |  |  |  |
0.816% |  | June 23, 2022 |  | € | 750 |
1.023% |  | June 23, 2024 |  | 750 |
1.362% |  | June 23, 2027 |  | 850 |
1.908% |  | June 23, 2032 |  | 1,250 |
|  |  |  | € | 3,600 |
(a) | The notes may be redeemed by us at any time, in whole, or in part, at varying redemption prices plus accrued and unpaid interest. The weighted-average effective interest rate for the notes at issuance was 2.11%.
(b) | In June 2020, Upjohn Inc. and Upjohn Finance B.V. completed privately placed debt offerings in connection with the previously announced proposed Reverse Morris Trust transaction that will ultimately combine Upjohn and Mylan to form a new company, Viatris. The notes may be redeemed by Upjohn Inc. and Upjohn Finance B.V., as applicable, at any time, in whole, or in part, at varying redemption prices plus accrued and unpaid interest. The weighted-average effective interest rates at issuance were 2.95% for the $7.45 billion notes and 1.37% for the €3.60 billion notes. If the proposed transaction with Mylan does not close on or prior to February 1, 2021, or if, prior to such date, Upjohn Inc. and Mylan notify the trustee that the business combination agreement for the proposed transaction with Mylan is terminated, or the transaction will not otherwise be pursued, the notes must be redeemed at redemption prices equal to 101% of their respective principal amounts, plus accrued and unpaid interest. Pfizer has guaranteed these notes, and such guarantees will automatically and unconditionally terminate without the consent of holders of the notes upon the proposed distribution to Pfizer’s stockholders of all of the issued and outstanding shares of Upjohn Inc.’s common stock held by Pfizer (the Distribution). Upjohn Inc. has guaranteed the notes issued by Upjohn Finance B.V., and Upjohn Inc. will remain a guarantor of such notes post Distribution. Following the separation, Upjohn Inc. and Upjohn Finance B.V., as applicable, will remain the obligor. The proceeds from the financings will be used in part to fund a cash distribution from Upjohn Inc. to Pfizer immediately prior to the Distribution. In the interim, the $11.4 billion of proceeds are classified as Restricted short-term investments in the condensed consolidated balance sheet as of June 28, 2020 pursuant to the terms of the transaction agreements.
In the first quarter of 2020, we issued the following senior unsecured notes:
(MILLIONS OF DOLLARS) |  |  |  | Principal
Interest Rate |  | Maturity Date |  | As of June 28, 2020
2.625%(a) |  | April 1, 2030 |  | $ | 1,250 |
Total long-term debt issued in the first quarter of 2020(b) |  |  |  | $ | 1,250 |
(a) | The notes may be redeemed by us at any time, in whole, or in part, at a redemption price plus accrued and unpaid interest.
(b) | The effective interest rate for the notes at issuance was 2.67%.
The following table provides the aggregate principal amount of our senior unsecured long-term debt, and adjustments to report our aggregate long-term debt:
(MILLIONS OF DOLLARS) |  | June 28, 2020 |  |  | December 31, 2019 |
Total long-term debt, principal amount(a) |  | $ | 49,187 |  |  | $ | 34,820 |
Net fair value adjustments related to hedging and purchase accounting |  | 1,654 |  |  | 1,305 |
Net unamortized discounts, premiums and debt issuance costs |  | (317 | ) |  | (176 | )
Other long-term debt |  | 5 |  |  | 5 |
Total long-term debt, carried at historical proceeds, as adjusted |  | $ | 50,529 |  |  | $ | 35,955 |
Current portion of long-term debt, carried at historical proceeds, as adjusted (not included above) |  | $ | 1,481 |  |  | $ | 1,462 |
(a) | As of June 28, 2020, $11.4 billion of proceeds from the Upjohn debt transactions are invested in money market funds and included in Restricted short-term investments in the condensed consolidated balance sheet.
Retirements In March 2020, we repurchased at par all $1.065 billion principal amount outstanding of our senior unsecured notes that were due in 2047 before the maturity date, which did not have a material impact on our condensed consolidated financial statements. E. Derivative Financial Instruments and Hedging Activities Foreign Exchange Risk A significant portion of our revenues, earnings and net investments in foreign affiliates is exposed to changes in foreign exchange rates. We manage our foreign exchange risk, in part, through operational means, including managing same-currency revenues in relation to same-currency costs and same-currency assets in relation to same-currency liabilities. We also manage our foreign exchange risk, depending on market conditions, through fair value, cash flow, and net investment hedging programs through the use of derivative financial instruments and foreign currency debt. These financial instruments serve to protect net income against the impact of remeasurement into another currency, or against the impact of translation into U.S. dollars of certain foreign exchange-denominated transactions. The derivative financial instruments primarily hedge or offset exposures in the euro, U.K. pound, Japanese yen, Swedish krona and Chinese renminbi. As a part of our cash flow hedging program, we designate foreign exchange contracts to hedge a portion of our forecasted euro, Japanese yen, Chinese renminbi, Canadian dollar, U.K. pound and Australian dollar-denominated intercompany inventory sales expected to occur no more than two years from the date of each hedge. Interest Rate Risk Our interest-bearing investments and borrowings are subject to interest rate risk. With respect to our investments, we strive to maintain a predominantly floating-rate basis position, but our strategy may change based on prevailing market conditions. We currently borrow primarily on a long-term, fixed-rate basis. From time to time, depending on market conditions, we will change the profile of our outstanding debt by entering into derivative financial instruments like interest rate swaps. We entered into derivative financial instruments to hedge or offset the fixed interest rates on the hedged item, matching the amount and timing of the hedged item. The derivative financial instruments primarily hedge U.S. dollar fixed-rate debt.
The following table provides the fair value of the derivative financial instruments and the related notional amounts presented between those derivatives that are designated as hedging instruments and those that are not designated as hedging instruments:
(MILLIONS OF DOLLARS) |  | June 28, 2020 |  | December 31, 2019
|  |  |  | Fair Value |  |  |  | Fair Value
|  | Notional |  | Asset |  | Liability |  | Notional |  | Asset |  | Liability
Derivatives designated as hedging instruments: |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts(a) |  | $ | 22,543 |  |  | $ | 551 |  |  | $ | 914 |  |  | $ | 25,193 |  |  | $ | 591 |  |  | $ | 662 |
Interest rate contracts |  | 1,995 |  |  | 158 |  |  | — |  |  | 6,645 |  |  | 318 |  |  | — |
|  |  |  | 708 |  |  | 914 |  |  |  |  | 909 |  |  | 662 |
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  | $ | 14,433 |  |  | 84 |  |  | 79 |  |  | $ | 19,623 |  |  | 82 |  |  | 55 |
Total |  |  |  | $ | 792 |  |  | $ | 993 |  |  |  |  | $ | 992 |  |  | $ | 718 |
(a) | The notional amount of outstanding foreign currency forward-exchange contracts hedging our intercompany forecasted inventory sales was $5.2 billion as of June 28, 2020 and $5.9 billion as of December 31, 2019.
The following table provides information about the gains/(losses) incurred to hedge or offset operational foreign exchange or interest rate risk:
|  | Amount of Gains/(Losses) Recognized in OID(a) |  | Amount of Gains/(Losses) Recognized in OCI(a), (b) |  | Amount of Gains/(Losses) Reclassified from OCI into OID and COS(a), (b)
(MILLIONS OF DOLLARS) |  | June 28, 2020 |  |  | June 30, 2019 |  |  | June 28, 2020 |  |  | June 30, 2019 |  |  | June 28, 2020 |  |  | June 30, 2019 |
Three Months Ended |  |  |  |  |  |  |  |  |  |  |  |
Derivative Financial Instruments in Cash Flow Hedge Relationships: |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts(c) |  | $ | — |  |  | $ | — |  |  | $ | 187 |  |  | $ | (204 | ) |  | $ | 172 |  |  | $ | 48 |
Amount excluded from effectiveness testing recognized in earnings based on an amortization approach(d) |  | — |  |  | — |  |  | 13 |  |  | 28 |  |  | 14 |  |  | 32 |
Derivative Financial Instruments in Fair Value Hedge Relationships: |  |  |  |  |  |  |  |  |  |  |  |
Interest rate contracts |  | 6 |  |  | 483 |  |  | — |  |  | — |  |  | — |  |  | — |
Hedged item |  | (6 | ) |  | (483 | ) |  | — |  |  | — |  |  | — |  |  | — |
Foreign exchange contracts |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Hedged item |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Derivative Financial Instruments in Net Investment Hedge Relationships: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  | — |  |  | — |  |  | (144 | ) |  | (48 | ) |  | — |  |  | — |
The portion on foreign exchange contracts excluded from the assessment of hedge effectiveness(d) |  | — |  |  | — |  |  | 29 |  |  | 52 |  |  | 42 |  |  | 31 |
Non-Derivative Financial Instruments in Net Investment Hedge Relationships: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency short-term borrowings(e) |  | — |  |  | — |  |  | — |  |  | (16 | ) |  | — |  |  | — |
Foreign currency long-term debt(e) |  | — |  |  | — |  |  | (42 | ) |  | (27 | ) |  | — |  |  | — |
Derivative Financial Instruments Not Designated as Hedges: |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  | 8 |  |  | (4 | ) |  | — |  |  | — |  |  | — |  |  | — |
All other net(d) |  | — |  |  | — |  |  | 12 |  |  | — |  |  | — |  |  | — |
|  | $ | 8 |  |  | $ | (4 | ) |  | $ | 56 |  |  | $ | (216 | ) |  | $ | 228 |  |  | $ | 111 |
|  | Amount of Gains/(Losses) Recognized in OID(a) |  | Amount of Gains/(Losses) Recognized in OCI(a), (b) |  | Amount of Gains/(Losses) Reclassified from OCI into OID and COS(a), (b)
(MILLIONS OF DOLLARS) |  | June 28, 2020 |  |  | June 30, 2019 |  |  | June 28, 2020 |  |  | June 30, 2019 |  |  | June 28, 2020 |  |  | June 30, 2019 |
Six Months Ended |  |  |  |  |  |  |  |  |  |  |  |
Derivative Financial Instruments in Cash Flow Hedge Relationships: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts(c) |  | $ | — |  |  | $ | — |  |  | $ | (341 | ) |  | $ | 6 |  |  | $ | 126 |  |  | $ | 257 |
Amount excluded from effectiveness testing recognized in earnings based on an amortization approach(d) |  | — |  |  | — |  |  | 42 |  |  | 84 |  |  | 41 |  |  | 86 |
Derivative Financial Instruments in Fair Value Hedge Relationships: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate contracts |  | 392 |  |  | 813 |  |  | — |  |  | — |  |  | — |  |  | — |
Hedged item |  | (392 | ) |  | (813 | ) |  | — |  |  | — |  |  | — |  |  | — |
Foreign exchange contracts |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Hedged item |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Derivative Financial Instruments in Net Investment Hedge Relationships: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  | — |  |  | — |  |  | 240 |  |  | (25 | ) |  | — |  |  | — |
The portion of foreign exchange contracts excluded from the assessment of hedge effectiveness(d) |  | — |  |  | — |  |  | 176 |  |  | 93 |  |  | 84 |  |  | 55 |
Non-Derivative Financial Instruments in Net Investment Hedge Relationships: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency short-term borrowings(e) |  | — |  |  | — |  |  | 8 |  |  | 19 |  |  | — |  |  | — |
Foreign currency long-term debt(e) |  | — |  |  | — |  |  | 3 |  |  | 11 |  |  | — |  |  | — |
Derivative Financial Instruments Not Designated as Hedges: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  | (51 | ) |  | (124 | ) |  | — |  |  | — |  |  | — |  |  | — |
All other net(d) |  | — |  |  | — |  |  | 12 |  |  | 1 |  |  | (1 | ) |  | — |
|  | $ | (51 | ) |  | $ | (124 | ) |  | $ | 139 |  |  | $ | 188 |  |  | $ | 251 |  |  | $ | 398 |
(a) | OID = Other (income)/deductions—net, included in Other (income)/deductions—net in the condensed consolidated statements of income. COS = Cost of Sales, included in Cost of sales in the condensed consolidated statements of income. OCI = Other comprehensive income/(loss), included in the condensed consolidated statements of comprehensive income.
(b) | For derivative financial instruments in cash flow hedge relationships, the gains and losses are included in Other comprehensive loss––Unrealized holding gains/(losses) on derivative financial instruments, net. For derivative financial instruments in net investment hedge relationships and for foreign currency debt designated as hedging instruments, the gains and losses are included in Other comprehensive loss––Foreign currency translation adjustments, net.
(c) | The amounts reclassified from OCI into COS were:
• | a net gain of $80 million in the second quarter of 2020;
• | a net gain of $150 million in the first six months of 2020;
• | a net gain of $59 million in the second quarter of 2019; and
• | a net gain of $103 million in the first six months of 2019.
The remaining amounts were reclassified from OCI into OID. Based on quarter-end foreign exchange rates that are subject to change, we expect to reclassify a pre-tax gain of $102 million within the next 12 months into income. The maximum length of time over which we are hedging future foreign exchange cash flow relates to our $1.8 billion U.K. pound debt maturing in 2043.
(d) | The amounts reclassified from OCI were reclassified into OID.
(e) | Long-term debt includes foreign currency long-term borrowings with carrying values of $2.0 billion as of June 28, 2020, which are used as hedging instruments in net investment hedges.
The following table provides the amounts recorded in our condensed consolidated balance sheet related to cumulative basis adjustments for fair value hedges:
|  | June 28, 2020 |  | December 31, 2019
|  |  |  | Cumulative Amount of Fair Value Hedging Adjustment Increase/(Decrease) to Carrying Amount |  |  |  | Cumulative Amount of Fair Value Hedging Adjustment Increase/(Decrease) to Carrying Amount
(MILLIONS OF DOLLARS) |  | Carrying Amount of Hedged Assets/Liabilities(a) |  |  | Active Hedging Relationships |  |  | Discontinued Hedging Relationships |  |  | Carrying Amount of Hedged Assets/Liabilities(a) |  |  | Active Hedging Relationships |  |  | Discontinued Hedging Relationships |
Short-term investments |  | $ | 45 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Long-term investments |  | — |  |  | — |  |  | — |  |  | 45 |  |  | — |  |  | — |
Long-term debt |  | 2,023 |  |  | 140 |  |  | 1,181 |  |  | 7,092 |  |  | 266 |  |  | 690 |
(a) | Carrying amounts exclude the cumulative amount of fair value hedging adjustments.
Certain of our derivative financial instruments are covered by associated credit-support agreements that have credit-risk-related contingent features designed to reduce both counterparties’ exposure to risk of defaulting on amounts owed by the other party. As of June 28, 2020, the aggregate fair value of these derivative financial instruments that are in a net liability position was $928 million, for which we have posted collateral of $922 million in the normal course of business. If there had been a downgrade to below an A rating by S&P or the equivalent rating by Moody’s, we would not have been required to post any additional collateral to our counterparties. As of June 28, 2020, we received cash collateral of $858 million from various counterparties. The collateral primarily supports the approximate fair value of our derivative contracts. With respect to the collateral received, the obligations are reported in Short-term borrowings, including current portion of long-term debt. F. Credit Risk On an ongoing basis, we review the creditworthiness of counterparties to our foreign exchange and interest rate agreements and do not expect to incur a significant loss from failure of any counterparties to perform under the agreements. There are no significant concentrations of credit risk related to our financial instruments with any individual counterparty. For additional information about concentrations of certain credit risk related to certain significant customers, see Notes to Consolidated Financial Statements––Note 17C. Segment, Geographic and Other Revenue Information: Other Revenue Information in Pfizer’s 2019 Financial Report. As of June 28, 2020, we had amounts due from a well-diversified, high quality group of banks ($1.9 billion) from around the world. For details about our investments, see Note 7B above. In general, there is no requirement for collateral from customers. However, derivative financial instruments are executed under credit-support agreements that provide for the ability to request to receive cash collateral, depending on levels of exposure, our credit rating and the credit rating of the counterparty, see Note 7E above.

X
- Definition Financial Instruments [Abstract] + References No definition available. + Details
Name: | pfe_FinancialInstrumentsAbstract
Namespace Prefix: | pfe_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for financial instruments. This disclosure includes, but is not limited to, fair value measurements of short and long term marketable securities, international currencies forward contracts, and auction rate securities. Financial instruments may include hedging and non-hedging currency exchange instruments, derivatives, securitizations and securities available for sale at fair value. Also included are investment results, realized and unrealized gains and losses as well as impairments and risk management disclosures. + References No definition available. + Details
Name: | us-gaap_FinancialInstrumentsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration