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Financial Instruments (Tables) | 9 Months Ended
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Sep. 30, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Fair Value Measurement Inputs and Valuation Techniques | The fair values of the Fixed-price Preemptive Rights and warrant are estimated using Black-Scholes option-pricing models, adjusted for unobservable inputs, including probability factors and weighting of expected life, volatility levels and risk-free interest rates (which are classified in Level 3 of the fair value hierarchy) based on the following assumptions at:
|  | September 30, 2019 |  | March 8, 2019 |  | September 30, 2019 |  | March 8, 2019
|  | Fixed-price Preemptive Rights |  | Warrant
Expected life (1) |  | 1.93 years |  | 2.32 years |  | 3.43 years |  | 4 years
Expected volatility (2) |  | 81.55% |  | 93.02% |  | 81.55% |  | 93.02%
Risk-free interest rate (3)(4) |  | 1.61% |  | 1.61% |  | 1.49% |  | 1.67%
Expected dividend yield (5) |  | —% |  | —% |  | —% |  | —%
(1) Based on the weighted-average expected life of the Fixed-price Preemptive Rights (with a range from approximately 1 year to 7 years at September 30, 2019 and March 8, 2019) and the March 8, 2023 expiration date of the warrant. (2) Based on a blend of historical volatility levels of the underlying equity security and peer companies. (3) Based on the implied yield currently available on Canadian Treasury zero coupon issues weighted for the remaining expected life of the Fixed-price Preemptive Rights. (4) Based on the implied yield currently available on Canadian Treasury zero coupon issues and the expected life of the warrant. (5) Based on Cronos’s expected dividend payments.
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation | The following table provides a reconciliation of the beginning and ending balance of the Fixed-price Preemptive Rights and warrant, which are classified in Level 3 of the fair value hierarchy:
|  | (in millions)
Balance at December 31, 2018 |  | $ | — |
Initial investment in Fixed-price Preemptive Rights and warrant |  | 1,736 |
Exercise of Preemptive Rights |  | (22 | )
Pre-tax earnings (losses) recognized in net earnings |  | (1,296 | )
Balance at September 30, 2019 |  | $ | 418 |
Schedule of Derivative Liabilities at Fair Value | The fair values of Altria’s derivative financial instruments on a gross basis included on the condensed consolidated balance sheets were as follows:
| Fair Value of Assets |  | Fair Value of Liabilities
| Balance Sheet Classification |  | September 30, 2019 |  | December 31, 2018 |  | Balance Sheet Classification | September 30, 2019 |  | December 31, 2018
Derivatives designated as hedging instruments: | (in millions)
Foreign currency contracts | Other current assets |  | $ | 69 |  |  | $ | 37 |  |  | Other accrued liabilities | $ | — |  |  | $ | — |
Foreign currency contracts | Other assets |  | 17 |  |  | 4 |  |  | Other liabilities | — |  |  | 4 |
Total |  | $ | 86 |  |  | $ | 41 |  |  |  | $ | — |  |  | $ | 4 |
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |  |  |  |
Cronos warrant | Investments in equity securities |  | $ | 315 |  |  | $ | — |  |  |  |  |  |
Fixed-price Preemptive Rights | Investments in equity securities |  | 103 |  |  | — |  |  |  |  |  |
Total |  |  | $ | 418 |  |  | $ | — |  |  |  |  |  |
Total derivatives |  |  | $ | 504 |  |  | $ | 41 |  |  |  | $ | — |  |  | $ | 4 |
Pre-tax Effects of Net Investment Hedges on Accumulated Other Comprehensive Losses | The pre-tax effects of Altria’s net investment hedges on accumulated other comprehensive losses and the condensed consolidated statements of earnings were as follows:
|  | Gain (Loss) Recognized in Accumulated Other Comprehensive Losses |  | Gain (Loss) Recognized in Net Earnings (1) |  | Gain (Loss) Recognized in Accumulated Other Comprehensive Losses |  | Gain (Loss) Recognized in Net Earnings (1)
|  | For the Nine Months Ended September 30, |  | For the Three Months Ended September 30,
|  | 2019 |  | 2018 |  | 2019 |  | 2018 |  | 2019 |  | 2018 |  | 2019 |  | 2018
|  | (in millions)
Foreign currency contracts |  | $ | 70 |  |  | $ | 46 |  |  | $ | 26 |  |  | $ | 26 |  |  | $ | 57 |  |  | $ | 7 |  |  | $ | 10 |  |  | $ | 10 |
Foreign currency denominated debt |  | 168 |  |  | — |  |  | — |  |  | — |  |  | 200 |  |  | — |  |  | — |  |  | — |
Total |  | $ | 238 |  |  | $ | 46 |  |  | $ | 26 |  |  | $ | 26 |  |  | $ | 257 |  |  | $ | 7 |  |  | $ | 10 |  |  | $ | 10 |
(1) Related to amounts excluded from effectiveness testing.

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