Annual report pursuant to Section 13 and 15(d)

INCOME TAXES (Tables)

v2.4.0.6
INCOME TAXES (Tables)
12 Months Ended
Dec. 31, 2012
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,
 
 
  2012   2011   2010  

Income tax expense (benefit):

                   

U.S.

                   

Current

  $ 156   $ 69   $ (35 )

Deferred

    17     4     47  

Non-U.S.

                   

Current

    51     63     41  

Deferred

    (55 )   (27 )   (24 )
               

Total

  $ 169   $ 109   $ 29  
               
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,
 
 
  2012   2011   2010  

Income from continuing operations before income taxes

  $ 547   $ 360   $ 20  
               

Expected tax expense at U.S. statutory rate of 35%

  $ 192   $ 126   $ 7  

Change resulting from:

                   

State tax expense (benefit) net of federal benefit

    15     7     (4 )

Non-U.S. tax rate differentials

    1     6     (16 )

Effects of non-U.S. operations

    (2 )   8     22  

U.S. domestic manufacturing deduction

    (16 )   (5 )    

Unrealized currency exchange gains and losses

    11     (5 )   (6 )

Effect of tax holidays

    (12 )   (1 )   2  

U.S. foreign tax credits, net of associated income and taxes

    (21 )   (4 )    

Portion of Convertible Note loss on early extinguishment of debt treated as equity repurchase for tax purposes

            43  

Tax authority audits and dispute resolutions

    5     4     (16 )

Change in valuation allowance

    (11 )   (16 )   (19 )

Other, net

    7     (11 )   16  
               

Total income tax expense

  $ 169   $ 109   $ 29  
               
Schedule of components of income (loss) from continuing operations before income taxes

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

 
  Year ended
December 31,
 
 
  2012   2011   2010  

U.S. 

  $ 482   $ 256   $ (126 )

Non-U.S. 

    65     104     146  
               

Total

  $ 547   $ 360   $ 20  
               
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,  
 
  2012   2011  

Deferred income tax assets:

             

Net operating loss carryforwards

  $ 819   $ 783  

Pension and other employee compensation

    289     256  

Property, plant and equipment

    69     77  

Intangible assets

    34     36  

Foreign tax credits

    71     46  

Other, net

    107     139  
           

Total

  $ 1,389   $ 1,337  
           

Deferred income tax liabilities:

             

Property, plant and equipment

  $ (551 ) $ (549 )

Pension and other employee compensation

        (25 )

Other, net

    (88 )   (108 )
           

Total

  $ (639 ) $ (682 )
           

Net deferred tax asset before valuation allowance

 
$

750
 
$

655
 

Valuation allowance

    (736 )   (756 )
           

Net deferred tax asset (liability)

  $ 14   $ (101 )
           

Current deferred tax asset

 
$

51
 
$

20
 

Current deferred tax liability

    (38 )   (7 )

Non-current deferred tax asset

    229     195  

Non-current deferred tax liability

    (228 )   (309 )
           

Net deferred tax asset (liability)

  $ 14   $ (101 )
           
Schedule of changes in valuation allowance

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

 
  2012   2011   2010  

Valuation allowance as of January 1

  $ 756   $ 797   $ 842  

Valuation allowance as of December 31

    736     756     797  
               

Net decrease

    20     41     45  

Foreign currency movements

    7     (30 )   1  

(Decrease) increase to deferred tax assets with an offsetting (decrease) increase to valuation allowances

    (16 )   5     (27 )
               

Change in valuation allowance per rate reconciliation

  $ 11   $ 16   $ 19  
               

Components of change in valuation allowance affecting tax expense:

                   

Pre-tax losses in jurisdictions with valuation allowances resulting in no tax expense or benefit

  $ 10   $ (6 ) $ (1 )

Releases of valuation allowances in various jurisdictions

    24     27     20  

Establishments of valuation allowances in various jurisdictions

    (23 )   (5 )    
               

Change in valuation allowance per rate reconciliation

  $ 11   $ 16   $ 19  
               
Schedule of reconciliation of unrecognized tax benefits

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

 
  2012   2011  

Unrecognized tax benefits as of January 1

  $ 39   $ 43  

Gross increases and decreases—tax positions taken during a prior period

    15     (3 )

Gross increases and decreases—tax positions taken during the current period

    9     3  

Decreases related to settlements of amounts due to tax authorities

    (3 )    

Reductions resulting from the lapse of statutes of limitation

    (3 )   (4 )

Foreign currency movements

         
           

Unrecognized tax benefits as of December 31

  $ 57   $ 39  
           

        

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

 

 

 
  Year ended
December 31,
 
 
  2012   2011   2010  

Interest expense included in tax expense

  $ (1 ) $ 5   $ 1  

Penalties expense included in tax expense

             

 

 
  December 31,  
 
  2012   2011  

Accrued liability for interest

  $ 10   $ 13  

Accrued liability for penalties

    1     2  

        

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

  2008 and later

Malaysia

  2003 and later

Switzerland

  2006 and later

The Netherlands

  2007 and later

United Kingdom

  2009 and later

United States federal

  2011 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,
 
 
  2012   2011   2010  

Income tax expense (benefit):

                   

U.S.

                   

Current

  $ 52   $ 7   $ (23 )

Deferred

    129     69     45  

Non-U.S.

                   

Current

    51     63     41  

Deferred

    (53 )   (26 )   (23 )
               

Total

  $ 179   $ 113   $ 40  
               

        

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,
 
 
  2012   2011   2010  

Income from continuing operations before income taxes

  $ 559   $ 370   $ 184  
               

Expected tax expense at U.S. statutory rate of 35%

  $ 196   $ 130   $ 64  

Change resulting from:

                   

State tax expense (benefit) net of federal benefit

    15     7     (4 )

Non-U.S. tax rate differentials

    1     6     (16 )

Effects of non-U.S. operations

    (1 )   8     22  

U.S. domestic manufacturing deduction

    (8 )        

Unrealized currency exchange gains and losses

    11     (5 )   (6 )

Effect of tax holidays

    (12 )   (1 )   2  

U.S. foreign tax credits, net of associated income and taxes

    (21 )   (4 )    

Tax authority audits and dispute resolutions

    5     4     (16 )

Change in valuation allowance

    (14 )   (19 )   (22 )

Other, net

    7     (13 )   16  
               

Total income tax expense

  $ 179   $ 113   $ 40  
               

        

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

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

 

 
  Year ended
December 31,
 
 
  2012   2011   2010  

U.S. 

  $ 494   $ 255   $ 38  

Non-U.S. 

    65     115     146  
               

Total

  $ 559   $ 370   $ 184  
               

        

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,  
 
  2012   2011  

Deferred income tax assets:

             

Net operating loss and AMT credit carryforwards

  $ 819   $ 895  

Pension and other employee compensation

    288     254  

Property, plant and equipment

    69     77  

Intangible assets

    33     35  

Foreign tax credits

    113     82  

Other, net

    106     140  
           

Total

  $ 1,428   $ 1,483  
           

Deferred income tax liabilities:

             

Property, plant and equipment

  $ (524 ) $ (515 )

Pension and other employee compensation

        (25 )

Other, net

    (88 )   (107 )
           

Total

  $ (612 ) $ (647 )
           

Net deferred tax asset before valuation allowance

 
$

816
 
$

836
 

Valuation allowance

    (745 )   (768 )
           

Net deferred tax asset

  $ 71   $ 68  
           

Current deferred tax asset

 
$

51
 
$

40
 

Current deferred tax liability

    (39 )   (29 )

Non-current deferred tax asset

    229     163  

Non-current deferred tax liability

    (170 )   (106 )
           

Net deferred tax asset

  $ 71   $ 68  
           

        

Schedule of changes in valuation allowance

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

 

 
  2012   2011   2010  

Valuation allowance as of January 1

  $ 768   $ 813   $ 861  

Valuation allowance as of December 31

    745     768     813  
               

Net decrease

    23     45     48  

Foreign currency movements

    7     (30 )   1  

(Decrease) increase to deferred tax assets with an offsetting (decrease) increase to valuation allowances

    (16 )   4     (27 )
               

Change in valuation allowance per rate reconciliation

  $ 14   $ 19   $ 22  
               

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

  $ 13   $ (3 ) $ 2  

Releases of valuation allowances in various jurisdictions

    24     27     20  

Establishments of valuation allowances in various jurisdictions

    (23 )   (5 )    
               

Change in valuation allowance per rate reconciliation

  $ 14   $ 19   $ 22