Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Schedule of Earnings Before Income Taxes and Provision For Income Taxes

Earnings before income taxes and provision for income taxes consisted of the following for the years ended December 31, 2019, 2018 and 2017:

(in millions)	2019			2018			2017
Earnings before income taxes	$	9,872		$	10,671		$	10,589
Provision for income taxes:
United States federal and state:
Current	$	17		$	120		$	1,662
Deferred	24			(113		)	(384		)
Total United States	41			7			1,278
Outside United States:
Current	2,417			2,425			3,146
Deferred	(165		)	13			(117		)
Total outside United States	2,252			2,438			3,029
Total provision for income taxes	$	2,293		$	2,445		$	4,307

Schedule of Reconciliation of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits was as follows:

(in millions)	2019			2018			2017
Balance at January 1,	$	56		$	145		$	79
Additions based on tax positions related to the current year	10			10			71
Additions for tax positions of previous years	1			15			5
Reductions for tax positions of prior years	(2		)	(94		)	—
Reductions due to lapse of statute of limitations	(1		)	(3		)	(7		)
Settlements	—			(19		)	(4		)
Other	(1		)	2			1
Balance at December 31,	$	63		$	56		$	145

Schedule of Unrecognized Tax Benefits and Liability for Contingent Income Taxes, Interest and Penalties

Unrecognized tax benefits and PMI’s liability for contingent income taxes, interest and penalties were as follows:

(in millions)	December 31, 2019			December 31, 2018			December 31, 2017
Unrecognized tax benefits	$	63		$	56		$	145
Accrued interest and penalties	16			12			23
Tax credits and other indirect benefits	(12		)	(14		)	(35		)
Liability for tax contingencies	$	67		$	54		$	133

Schedule of Reasons Attributable to the Differences Between Effective Income Tax Rate and U.S. Federal Statutory Rate

The effective income tax rate on pre-tax earnings differed from the U.S. federal statutory rate for the following reasons for the years ended December 31, 2019, 2018 and 2017:

	2019		2018		2017
U.S. federal statutory rate	21.0	%	21.0	%	35.0	%
Increase (decrease) resulting from:
Foreign rate differences	1.8		1.3		(12.2	)
Dividend repatriation cost	(0.5	)	2.5		16.4
Global intangible low-taxed income	1.4		1.2
U.S. state taxes	0.7		(1.1	)
Foreign derived intangible income	(1.2	)	(1.1	)
Other	—		(0.9	)	1.5
Effective tax rate	23.2	%	22.9	%	40.7	%

Schedule of Temporary Differences of Tax Effects to Deferred Income Tax Assets and Liabilities

The tax effects of temporary differences that gave rise to deferred income tax assets and liabilities consisted of the following:

	At December 31,
(in millions)	2019			2018
Deferred income tax assets:
Accrued postretirement and postemployment benefits	$	184		$	193
Accrued pension costs	620			390
Inventory	176			136
Accrued liabilities	130			138
Net operating loss carryforwards and tax credits	486			452
Other	101			37
Total deferred income tax assets	1,697			1,346
Less: valuation allowance	(304		)	(257		)
Deferred income tax assets, net of valuation allowance	1,393			1,089
Deferred income tax liabilities:
Trade names	(469		)	(508		)
Property, plant and equipment	(180		)	(222		)
Unremitted earnings	(243		)	(123		)
Foreign exchange	(256		)	(157		)
Total deferred income tax liabilities	(1,148		)	(1,010		)
Net deferred income tax assets	$	245		$	79