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Income Taxes:
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes:
Income Taxes:

Earnings before income taxes and provision for income taxes consisted of the following for the years ended December 31, 2023, 2022 and 2021:
(in millions)
202320222021
Earnings before income taxes
$10,450 $11,634 $12,232 
Provision for income taxes:
United States federal and state:
Current
$201 $(75)$73 
Deferred
(368)(139)27 
Total United States
(167)(214)100 
Outside United States:
Current
2,468 2,553 2,616 
Deferred
38 (95)(45)
Total outside United States
2,506 2,458 2,571 
Total provision for income taxes
$2,339 $2,244 $2,671 

On August 16, 2022, the Inflation Reduction Act ("the Act") was signed into law in the U.S. The Act includes a new corporate alternative minimum tax and an excise tax on stock buybacks effective after December 31, 2022. As of December 31, 2023, PMI has determined that the Act had no tax impacts on its consolidated financial statements.

On March 11, 2021, the American Rescue Plan Act of 2021 ("the ARP Act") was signed into law in the U.S. to provide certain relief as a result of the COVID-19 pandemic. PMI has determined that the ARP Act had no significant impact on PMI's effective tax rate.

At December 31, 2017, PMI recorded a one-time transition tax liability on its accumulated foreign earnings, which is payable over an eight-year period beginning in 2018. At December 31, 2023 and December 31, 2022, $0.3 billion and $0.7 billion of PMI's remaining long-term portion of transition tax liability, respectively, was recorded in "income taxes and other liabilities" on PMI's consolidated balance sheets.

At December 31, 2023, applicable U.S. federal income taxes have not been provided on approximately $0.6 billion of accumulated earnings of Swedish Match subsidiaries that are expected to be permanently reinvested. PMI does not foresee a need to repatriate these earnings since its U.S. cash requirements are supported by distributions of earnings from PMI foreign entities that have not been designated as permanently reinvested and existing credit facilities. At December 31, 2023, PMI has determined the amount of deferred tax liabilities related to these unremitted Swedish Match earnings is approximately $71 million.

At December 31, 2023 and 2022, U.S. federal and foreign deferred income taxes have been provided on all accumulated earnings of PMI's foreign subsidiaries.

PMI is regularly examined by tax authorities around the world and is currently under examination in a number of jurisdictions. The U.S. federal statute of limitations on assessment remains open for the years 2019 and onward. Foreign and U.S. state jurisdictions have statutes of limitations generally ranging from 3 to 5 years after the filing of a return. Years still open to examination by foreign tax authorities in major jurisdictions include Germany (2018 onward), Indonesia (2019 onward), Italy (2017 onward), Russia (2020 onward) and Switzerland (2019 onward).

At December 31, 2023, subsidiaries of PMI in Indonesia, principally PT Hanjaya Mandala Sampoerna Tbk ("HMS"), have recorded income tax receivables in the amount of 4.0 trillion Indonesian rupiah (approximately $255 million) relating to corporate income tax assessments paid to avoid potential penalties, primarily for domestic and other intercompany transactions for the years 2014 to 2020. Objection letters have been filed with the Tax Office and these assessments are being challenged at various levels in court. These income tax receivables are included in other assets in PMI’s consolidated balance sheets at December 31, 2023.

It is reasonably possible that within the next 12 months certain tax examinations will close, which could result in a change in unrecognized tax benefits along with related interest and penalties. An estimate of any possible change cannot be made at this time.
A reconciliation of the beginning and ending amount of unrecognized tax benefits was as follows:
(in millions)
202320222021
Balance at January 1,$72 $89 $72 
Additions based on tax positions related to the current year
7 12 12 
Additions for tax positions of previous years
1 2 15 
Reductions for tax positions of prior years
(23)(18)(1)
Reductions due to lapse of statute of limitations
(3)(6)(3)
Settlements
— (4)— 
Other
1 (3)(6)
Balance at December 31,$55 $72 $89 

Unrecognized tax benefits and PMI’s liability for contingent income taxes, interest and penalties were as follows:
(in millions)
December 31, 2023December 31, 2022December 31, 2021
Unrecognized tax benefits
$55 $72 $89 
Accrued interest and penalties
9 13 18 
Tax credits and other indirect benefits
(1)(3)(7)
Liability for tax contingencies
$63 $82 $100 

The amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate was $55 million at December 31, 2023. The remainder, if recognized, would principally affect deferred taxes.

For the years ended December 31, 2023, 2022 and 2021, PMI recognized income (expense) in its consolidated statements of earnings of $5 million, $2 million and $(3) million, respectively, related to interest and penalties associated with uncertain tax positions.

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, 2023, 2022 and 2021:
202320222021
U.S. federal statutory rate21.0 %21.0 %21.0 %
Increase (decrease) resulting from:
Foreign rate differences(1.0)(0.5)(0.3)
Dividend repatriation cost0.8 0.7 0.6 
Global intangible low-taxed income2.0 1.0 0.8 
U.S. state taxes(0.1)0.1 0.2 
Foreign derived intangible income(0.9)(0.8)(0.7)
Foreign exchange(1.6)(1.7)— 
Non-deductible goodwill impairment1.3 — — 
Unremitted earnings of Russian subsidiaries1.7 — — 
Other(0.8)(0.5)0.2 
Effective tax rate22.4 %19.3 %21.8 %

The 2023 effective tax rate increased 3.1 percentage points to 22.4%. The change in the effective tax rate for 2023, as compared to 2022, was unfavorably impacted by: (i) an increase in deferred tax liabilities related to the unremitted earnings of PMI's Russian subsidiaries due to the unilateral suspension of certain Russian double tax treaties by the Russian authorities on August 8, 2023, with respect to certain payments including dividends; (ii) the non-deductible Wellness and Healthcare goodwill impairment charge and (iii) an increase in foreign tax credit limitation related to GILTI, partially offset by changes in earnings mix by taxing jurisdiction.
The 2022 effective tax rate decreased 2.5 percentage points to 19.3%. The change in the effective tax rate for 2022, as compared to 2021, was favorably impacted by changes in income tax reserves, a deferred tax benefit for unrealized foreign currency losses on intercompany loans related to the Swedish Match acquisition financing reflected in the consolidated statements of earnings ($203 million), while the underlying pre-tax foreign currency movements fully offset in the consolidated statements of earnings and were reflected as currency translation adjustments in its consolidated statements of stockholders' (deficit) equity, and by a reduction in deferred tax liabilities related to pension plan assets ($40 million), partially offset by an increase in deferred tax liabilities related to the fair value adjustment of equity securities held by PMI ($10 million). For further details, see Note 6. Related Parties - Equity Investments and Other.

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)
20232022
Deferred income tax assets:
Accrued postretirement and postemployment benefits$223 $217 
Accrued pension costs450 277 
Inventory27 22 
Accrued liabilities191 158 
Net operating loss, tax credit, and other carryforwards 501 384 
Foreign exchange149 — 
Other19 — 
Total deferred income tax assets1,560 1,058 
Less: valuation allowance(369)(378)
Deferred income tax assets, net of valuation allowance1,191 680 
Deferred income tax liabilities:
Intangible assets(2,136)(1,485)
Property, plant and equipment(218)(200)
Unremitted earnings(358)(141)
Foreign exchange— (175)
Other— (32)
Total deferred income tax liabilities
(2,712)(2,033)
Net deferred income tax assets (liabilities)$(1,521)$(1,353)

At December 31, 2023, PMI recorded deferred tax assets for net operating loss, tax credit, and other carryforwards of $501 million, with varying dates of expiration, primarily after 2028, including $274 million with an unlimited carryforward period. At December 31, 2023, PMI has recorded a valuation allowance of $369 million against deferred tax assets that do not meet the more-likely-than not recognition threshold.
At December 31, 2022, PMI recorded deferred tax assets for net operating loss, tax credit, and other carryforwards of $384 million, with varying dates of expiration, primarily after 2027, including $173 million with an unlimited carryforward period. At December 31, 2022, PMI has recorded a valuation allowance of $378 million against deferred tax assets that do not meet the more-likely-than-not recognition threshold.