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, 2014

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,
	2014			2013			2012
Income tax expense (benefit):
U.S.
Current	$	55		$	75		$	156
Deferred		(4	)		79			17
Non-U.S.
Current		48			42			51
Deferred		(48	)		(71	)		(55	)

Total	$	51		$	125		$	169

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

	Year ended December 31,
	2014			2013			2012
Income from continuing operations before income taxes	$	404		$	279		$	547


Expected tax expense at U.S. statutory rate of 35%	$	142		$	98		$	192
Change resulting from:
State tax expense net of federal benefit		10			11			15
Non-U.S. tax rate differentials		(7	)		10			1
Effects of non-U.S. operations		3			1			(2	)
U.S. domestic manufacturing deduction		(14	)		(14	)		(16	)
Currency exchange gains and losses		(7	)		14			11
Effect of tax holidays		—			—			(12	)
U.S. foreign tax credits, net of associated income and taxes		(2	)		(86	)		(21	)
Tax benefit of losses with valuation allowances as a result of other comprehensive income		(7	)		(22	)		—
Tax authority audits and dispute resolutions		3			9			5
Change in valuation allowance		(76	)		100			(11	)
Other, net		6			4			7

Total income tax expense	$	51		$	125		$	169

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,
	2014			2013			2012
U.S.	$	435		$	419		$	482
Non-U.S.		(31	)		(140	)		65

Total	$	404		$	279		$	547

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,
	2014			2013
Deferred income tax assets:
Net operating loss carryforwards	$	875		$	853
Pension and other employee compensation		313			197
Property, plant and equipment		109			72
Intangible assets		46			22
Foreign tax credits		17			114
Other, net		100			106

Total	$	1,460		$	1,364


Deferred income tax liabilities:
Property, plant and equipment	$	(540	)	$	(543	)
Pension and other employee compensation		(2	)		(6	)
Other, net		(103	)		(61	)

Total	$	(645	)	$	(610	)


Net deferred tax asset before valuation allowance	$	815		$	754
Valuation allowance—net operating losses and other		(702	)		(700	)
Valuation allowance—foreign tax credits		—			(114	)

Net deferred tax asset	$	113		$	(60	)


Current deferred tax asset	$	62		$	53
Current deferred tax liability		(51	)		(43	)
Non-current deferred tax asset		435			243
Non-current deferred tax liability		(333	)		(313	)

Net deferred tax asset	$	113		$	(60	)

Schedule of changes in valuation allowance

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

	2014			2013			2012
Valuation allowance as of January 1	$	814		$	736		$	756
Valuation allowance as of December 31		702			814			736

Net decrease		112			(78	)		20
Foreign currency movements		(49	)		16			7
(Decrease) increase to deferred tax assets with no impact on operating tax expense, including an offsetting (decrease) increase to valuation allowances		13			(38	)		(16	)

Change in valuation allowance per rate reconciliation	$	76		$	(100	)	$	11


Components of change in valuation allowance affecting tax expense:
Pre-tax losses in jurisdictions with valuation allowances resulting in no tax expense or benefit	$	(32	)	$	(21	)	$	10
Releases of valuation allowances in various jurisdictions		111			16			24
Establishments of valuation allowances in various jurisdictions		(3	)		(95	)		(23	)

Change in valuation allowance per rate reconciliation	$	76		$	(100	)	$	11

Schedule of reconciliation of unrecognized tax benefits

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

	2014			2013
Unrecognized tax benefits as of January 1	$	96		$	57
Gross increases and decreases—tax positions taken during a prior period		(18	)		39
Gross increases and decreases—tax positions taken during the current period		1			11
Decreases related to settlements of amounts due to tax authorities		(5	)		(3	)
Reductions resulting from the lapse of statutes of limitation		(2	)		(7	)
Foreign currency movements		(4	)		(1	)

Unrecognized tax benefits as of December 31	$	68		$	96

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

	Year ended December 31,
	2014		2013			2012
Interest expense included in tax expense	$	2	$	2		$	(1	)
Penalties expense included in tax expense		—		(1	)		—

	December 31,
	2014		2013
Accrued liability for interest	$	14	$	13
Accrued liability for penalties		—		—

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

Tax Jurisdiction		Open Tax Years
China		2004 and later
France		2002 and later
India		2004 and later
Italy		2010 and later
Malaysia		2003 and later
Switzerland		2008 and later
The Netherlands		2009 and later
United Kingdom		2012 and later
United States federal (except for foreign tax credits)		2009 and later

Huntsman International

Income Tax