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

Note 19 - Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

	*Year ended December 31,*
	*2023*			*2022*			*2021*
Income from continuing operations before income taxes	$	99		$	697		$	1,246

Expected tax expense at U.S. statutory rate of 21%	$	21		$	146		$	261
Change resulting from:
State tax expense, net of federal benefit		(1	)		3			15
Non-U.S. tax rate differentials		—			8			16
Change in valuation allowance		45			38			(9	)
Impact of equity method investments		(28	)		(21	)		(37	)
Non-U.S. withholding tax on repatriated earnings, net of U.S. foreign tax credits		11			17			14
Tax authority audits and dispute resolutions		5			6			4
Non-U.S. income subject to U.S. tax not offset by U.S. foreign tax credits		3			3			(19	)
Venator investment basis difference and fair market value adjustments		—			—			(29	)
Change in valuation allowance on capital loss related to Venator investment		—			—			(28	)
Other non-U.S. tax effects, including nondeductible expenses and withholding taxes		6			(12	)		9
Other U.S. tax effects, including nondeductible expenses and other credits		2			(2	)		(6	)
Total income tax expense	$	64		$	186		$	191

	*Year ended December 31,*
	*2023*			*2022*			*2021*
Income from continuing operations before income taxes	$	102		$	700		$	1,250

Expected tax expense at U.S. statutory rate of 21%	$	22		$	146		$	261
Change resulting from:
State tax expense, net of federal benefit		(1	)		3			15
Non-U.S. tax rate differentials		—			8			16
Change in valuation allowance		45			38			(9	)
Impact of equity method investments		(28	)		(21	)		(37	)
Non-U.S. withholding tax on repatriated earnings, net of U.S. foreign tax credits		11			17			14
Tax authority audits and dispute resolutions		5			6			4
Non-U.S. income subject to U.S. tax not offset by U.S. foreign tax credits		3			3			(19	)
Venator investment basis difference and fair market value adjustments		—			—			(29	)
Change in valuation allowance on capital loss related to Venator investment		—			—			(28	)
Other non-U.S. tax effects, including nondeductible expenses and withholding taxes		6			(12	)		9
Other U.S. tax effects, including nondeductible expenses and other credits		2			—			(5	)
Total income tax expense	$	65		$	188		$	192

	*December 31,*
	*2023*			*2022*
Deferred income tax assets:
Net operating loss carryforwards	$	234		$	220
Operating leases		92			100
Pension and other employee compensation		65			65
Deferred interest		78			49
Basis difference in Venator investment		—			45
Capitalized research and development costs		44			30
Property, plant and equipment		22			25
Intangible assets		16			24
Intercompany prepayments		28			9
Other, net		41			45
Total	$	620		$	612
Deferred income tax liabilities:
Property, plant and equipment	$	(267	)	$	(263	)
Operating leases		(93	)		(102	)
Intangible assets		(80	)		(83	)
Pension and other employee compensation		(28	)		(47	)
Outside basis difference in subsidiaries		(41	)		(31	)
Unrealized currency gains		(8	)		(11	)
Other, net		(13	)		(9	)
Total	$	(530	)	$	(546	)
Net deferred tax asset before valuation allowance	$	90		$	66
Valuation allowance—net operating losses and other		(221	)		(169	)
Net deferred tax liability	$	(131	)	$	(103	)
Non-current deferred tax asset	$	112		$	147
Non-current deferred tax liability		(243	)		(250	)
Net deferred tax liability	$	(131	)	$	(103	)

	*December 31,*
	*2023*			*2022*
Deferred income tax assets:
Net operating loss carryforwards	$	234		$	220
Operating leases		92			100
Pension and other employee compensation		65			65
Deferred interest		78			49
Basis difference in Venator investment		—			45
Capitalized research and development costs		44			30
Property, plant and equipment		22			25
Intangible assets		16			24
Intercompany prepayments		28			9
Other, net		41			45
Total	$	620		$	612
Deferred income tax liabilities:
Property, plant and equipment	$	(267	)	$	(263	)
Operating leases		(93	)		(102	)
Intangible assets		(80	)		(83	)
Pension and other employee compensation		(28	)		(47	)
Outside basis difference in subsidiaries		(41	)		(31	)
Unrealized currency gains		(8	)		(11	)
Other, net		(17	)		(13	)
Total	$	(534	)	$	(550	)
Net deferred tax asset before valuation allowance	$	86		$	62
Valuation allowance—net operating losses and other		(221	)		(169	)
Net deferred tax liability	$	(135	)	$	(107	)
Non-current deferred tax asset	$	112		$	147
Non-current deferred tax liability		(247	)		(254	)
Net deferred tax liability	$	(135	)	$	(107	)

	*2023*			*2022*			*2021*
Valuation allowance as of January 1	$	169		$	131		$	206
Valuation allowance as of December 31		221			169			131
Net (increase) decrease		(52	)		(38	)		75
Foreign currency movements		3			(4	)		(4	)
Decrease to deferred tax assets with no impact on operating tax expense, including an offsetting (decrease) increase to valuation allowances		4			4			(62	)
Change in valuation allowance per rate reconciliation	$	(45	)	$	(38	)	$	9
Components of change in valuation allowance affecting tax expense:
Pre-tax income and losses in jurisdictions with valuation allowances resulting in no tax expense or benefit	$	(30	)	$	13		$	13
Releases of valuation allowances in various jurisdictions		1			—			2
Establishments of valuation allowances in various jurisdictions		(16	)		(51	)		(6	)
Change in valuation allowance per rate reconciliation	$	(45	)	$	(38	)	$	9

	*2023*			*2022*			*2021*
Valuation allowance as of January 1	$	169		$	131		$	206
Valuation allowance as of December 31		221			169			131
Net (increase) decrease		(52	)		(38	)		75
Foreign currency movements		3			(4	)		(4	)
Decrease to deferred tax assets with no impact on operating tax expense, including an offsetting (decrease) increase to valuation allowances		4			4			(62	)
Change in valuation allowance per rate reconciliation	$	(45	)	$	(38	)	$	9
Components of change in valuation allowance affecting tax expense:
Pre-tax income and losses in jurisdictions with valuation allowances resulting in no tax expense or benefit	$	(30	)	$	13		$	13
Releases of valuation allowances in various jurisdictions		1			—			2
Establishments of valuation allowances in various jurisdictions		(16	)		(51	)		(6	)
Change in valuation allowance per rate reconciliation	$	(45	)	$	(38	)	$	9

	*2023*			*2022*
Unrecognized tax benefits as of January 1	$	57		$	48
Gross increases and decreases—tax positions taken during a prior period		(50	)		6
Gross increases and decreases—tax positions taken during the current period		—			4
Reductions resulting from the lapse of statues of limitations		(2	)		—
Foreign currency movements		—			(1	)
Unrecognized tax benefits as of December 31	$	5		$	57

	*Year ended December 31,*
	*2023*		*2022*		*2021*
Interest included in tax expense	$	3	$	3	$	1

	*December 31,*
	*2023*		*2022*
Accrued liability for interest	$	6	$	8