Huntsman Corporation Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

INCOME TAXES (Tables)

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2013

Schedule of Income tax expense (benefit)

The following is a summary of U.S. and non-U.S. provisions for current and deferred income taxes (dollars in millions):

	Year ended December 31,

	2013			2012			2011
Income tax expense (benefit):
U.S.
Current	$	75		$	156		$	69
Deferred		79			17			4
Non-U.S.
Current		42			51			63
Deferred		(71	)		(55	)		(27	)

Total	$	125		$	169		$	109

Schedule of reconciliation of the differences between the U.S. federal income taxes at the U.S. statutory rate to total provision (benefit) for income taxes

The following schedule reconciles the differences between the U.S. federal income taxes at the U.S. statutory rate to our provision (benefit) for income taxes (dollars in millions):

	Year ended December 31,

	2013			2012			2011
Income from continuing operations before income taxes	$	279		$	547		$	360


Expected tax expense at U.S. statutory rate of 35%	$	98		$	192		$	126
Change resulting from:
State tax expense (benefit) net of federal benefit		11			15			7
Non-U.S. tax rate differentials		10			1			6
Effects of non-U.S. operations		1			(2	)		8
U.S. domestic manufacturing deduction		(14	)		(16	)		(5	)
Unrealized currency exchange gains and losses		14			11			(5	)
Effect of tax holidays		—			(12	)		(1	)
U.S. foreign tax credits, net of associated income and taxes		(86	)		(21	)		(4	)
Tax benefit of losses with valuation allowances as a result of other comprehensive income		(22	)		—			—
Tax authority audits and dispute resolutions		9			5			4
Change in valuation allowance		100			(11	)		(16	)
Other, net		4			7			(11	)

Total income tax expense	$	125		$	169		$	109

Schedule of components of income (loss) from continuing operations before income taxes

The components of income (loss) from continuing operations before income taxes were as follows (dollars in millions):

	Year ended December 31,

	2013			2012		2011
U.S.	$	419		$	482	$	256
Non-U.S.		(140	)		65		104

Total	$	279		$	547	$	360

Schedule of components of deferred income tax assets and liabilities

Components of deferred income tax assets and liabilities were as follows (dollars in millions):

	December 31,

	2013			2012
Deferred income tax assets:
Net operating loss carryforwards	$	853		$	819
Pension and other employee compensation		197			289
Property, plant and equipment		72			69
Intangible assets		22			34
Foreign tax credits		114			71
Other, net		106			107

Total	$	1,364		$	1,389


Deferred income tax liabilities:
Property, plant and equipment	$	(543	)	$	(551	)
Pension and other employee compensation		(6	)		—
Other, net		(61	)		(88	)

Total	$	(610	)	$	(639	)


Net deferred tax asset before valuation allowance	$	754		$	750
Valuation allowance—net operating losses and other		(700	)		(715	)
Valuation allowance—foreign tax credits		(114	)		(21	)

Net deferred tax asset	$	(60	)	$	14


Current deferred tax asset	$	53		$	51
Current deferred tax liability		(43	)		(38	)
Non-current deferred tax asset		243			229
Non-current deferred tax liability		(313	)		(228	)

Net deferred tax asset	$	(60	)	$	14

Schedule of changes in valuation allowance

The following is a summary of changes in the valuation allowance (dollars in millions):

	2013			2012			2011

Valuation allowance as of January 1	$	736		$	756		$	797
Valuation allowance as of December 31		814			736			756

Net decrease		(78	)		20			41
Foreign currency movements		16			7			(30	)
(Decrease) increase to deferred tax assets with no impact on operating tax expense, including an offsetting (decrease) increase to valuation allowances		(38	)		(16	)		5

Change in valuation allowance per rate reconciliation	$	(100	)	$	11		$	16


Components of change in valuation allowance affecting tax expense:
Pre-tax losses in jurisdictions with valuation allowances resulting in no tax expense or benefit	$	(21	)	$	10		$	(6	)
Releases of valuation allowances in various jurisdictions		16			24			27
Establishments of valuation allowances in various jurisdictions		(95	)		(23	)		(5	)

Change in valuation allowance per rate reconciliation	$	(100	)	$	11		$	16

Schedule of reconciliation of unrecognized tax benefits

The following is a reconciliation of our unrecognized tax benefits (dollars in millions):

	2013			2012

Unrecognized tax benefits as of January 1	$	57		$	39
Gross increases and decreases—tax positions taken during a prior period		39			15
Gross increases and decreases—tax positions taken during the current period		11			9
Decreases related to settlements of amounts due to tax authorities		(3	)		(3	)
Reductions resulting from the lapse of statutes of limitation		(7	)		(3	)
Foreign currency movements		(1	)		—

Unrecognized tax benefits as of December 31	$	96		$	57

Schedule of interest and penalties accrued related to unrecognized tax benefits included in the income tax expense

	Year ended December 31,

	2013			2012			2011
Interest expense included in tax expense	$	2		$	(1	)	$	5
Penalties expense included in tax expense		(1	)		—			—

	December 31,

	2013		2012
Accrued liability for interest	$	13	$	10
Accrued liability for penalties		—		1

Summary of the tax years that remain subject to examination by major tax jurisdictions

Tax Jurisdiction		Open Tax Years

China		2001 and later
France		2002 and later
India		2004 and later
Italy		2009 and later
Malaysia		2003 and later
Switzerland		2007 and later
The Netherlands		2007 and later
United Kingdom		2011 and later
United States federal		2012 and later

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

Income Tax

Schedule of Income tax expense (benefit)

The following is a summary of U.S. and non-U.S. provisions for current and deferred income taxes (dollars in millions):

	Year ended December 31,

	2013			2012			2011
Income tax expense (benefit):
U.S.
Current	$	41		$	52		$	7
Deferred		124			129			69
Non-U.S.
Current		42			51			63
Deferred		(70	)		(53	)		(26	)

Total	$	137		$	179		$	113

Schedule of reconciliation of the differences between the U.S. federal income taxes at the U.S. statutory rate to total provision (benefit) for income taxes

The following schedule reconciles the differences between the U.S. federal income taxes at the U.S. statutory rate to our provision (benefit) for income taxes (dollars in millions):

	Year ended December 31,

	2013			2012			2011
Income from continuing operations before income taxes	$	289		$	559		$	370


Expected tax expense at U.S. statutory rate of 35%	$	101		$	196		$	130
Change resulting from:
State tax expense (benefit) net of federal benefit		11			15			7
Non-U.S. tax rate differentials		10			1			6
Effects of non-U.S. operations		3			(1	)		8
U.S. domestic manufacturing deduction		(14	)		(8	)		—
Unrealized currency exchange gains and losses		14			11			(5	)
Effect of tax holidays		—			(12	)		(1	)
U.S. foreign tax credits, net of associated income and taxes		(86	)		(21	)		(4	)
Tax benefit of losses with valuation allowances as a result of other comprehensive income		(22	)		—			—
Tax authority audits and dispute resolutions		9			5			4
Change in valuation allowance		108			(14	)		(19	)
Other, net		3			7			(13	)

Total income tax expense	$	137		$	179		$	113

Schedule of components of income (loss) from continuing operations before income taxes

The components of income (loss) from continuing operations before income taxes were as follows (dollars in millions):

	Year ended December 31,

	2013			2012		2011
U.S.	$	429		$	494	$	255
Non-U.S.		(140	)		65		115

Total	$	289		$	559	$	370

Schedule of components of deferred income tax assets and liabilities

Components of deferred income tax assets and liabilities were as follows (dollars in millions):

	December 31,

	2013			2012
Deferred income tax assets:
Net operating loss and AMT credit carryforwards	$	853		$	819
Pension and other employee compensation		196			288
Property, plant and equipment		72			69
Intangible assets		22			33
Foreign tax credits		125			113
Other, net		105			106

Total	$	1,373		$	1,428


Deferred income tax liabilities:
Property, plant and equipment	$	(524	)	$	(524	)
Pension and other employee compensation		(6	)		—
Other, net		(62	)		(88	)

Total	$	(592	)	$	(612	)


Net deferred tax asset before valuation allowance	$	781		$	816
Valuation allowance—net operating losses and other		(707	)		(724	)
Valuation allowance—foreign tax credits		(125	)		(21	)

Net deferred tax asset	$	(51	)	$	71


Current deferred tax asset	$	53		$	51
Current deferred tax liability		(44	)		(39	)
Non-current deferred tax asset		243			229
Non-current deferred tax liability		(303	)		(170	)

Net deferred tax asset	$	(51	)	$	71

Schedule of changes in valuation allowance

The following is a summary of changes in the valuation allowance (dollars in millions):

	2013			2012			2011

Valuation allowance as of January 1	$	745		$	768		$	813
Valuation allowance as of December 31		832			745			768

Net decrease		(87	)		23			45
Foreign currency movements		16			7			(30	)
(Decrease) increase to deferred tax assets with no impact on operating tax expense, including an offsetting (decrease) increase to valuation allowances		(37	)		(16	)		4

Change in valuation allowance per rate reconciliation	$	(108	)	$	14		$	19


Components of change in valuation allowance affecting tax expense:
Pre-tax income (losses) in jurisdictions with valuation allowances resulting in no tax expense or benefit	$	(18	)	$	13		$	(3	)
Releases of valuation allowances in various jurisdictions		16			24			27
Establishments of valuation allowances in various jurisdictions		(106	)		(23	)		(5	)

Change in valuation allowance per rate reconciliation	$	(108	)	$	14		$	19

- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

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