Annual report pursuant to Section 13 and 15(d)

Note 19 - Income Taxes (Tables)

v3.22.4
Note 19 - Income Taxes (Tables)
12 Months Ended
Dec. 31, 2022
Notes Tables  
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]
   

Year ended December 31,

 
   

2022

   

2021

   

2020

 

Income tax expense (benefit):

                       

U.S.

                       

Current

  $ 6     $ 118     $ (216 )

Deferred

    57       (70 )     167  

Non-U.S.

                       

Current

    91       112       83  

Deferred

    32       31       8  

Total

  $ 186     $ 191     $ 42  
   

Year ended December 31,

 
   

2022

   

2021

   

2020

 

Income tax expense (benefit):

                       

U.S.

                       

Current

  $ 6     $ 120     $ (215 )

Deferred

    59       (71 )     166  

Non-U.S.

                       

Current

    91       112       83  

Deferred

    32       31       8  

Total

  $ 188     $ 192     $ 42  
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]
   

Year ended December 31,

 
   

2022

   

2021

   

2020

 

Income from continuing operations before income taxes

  $ 697     $ 1,246     $ 331  
                         

Expected tax expense at U.S. statutory rate of 21%

  $ 146     $ 261     $ 70  

Change resulting from:

                       

State tax expense, net of federal benefit

    3       15       (4 )

Non-U.S. tax rate differentials

    8       16       16  

Other non-U.S. tax effects, including nondeductible expenses and other withholding taxes

    (10 )     16       4  

Venator investment basis difference and fair market value adjustments

          (29 )      

Change in valuation allowance on capital loss related to Venator investment

          (28 )      

Non-U.S. income subject to U.S. tax not offset by U.S. foreign tax credits

    3       (19 )     7  

Tax authority audits and dispute resolutions

    6       4        

Change in valuation allowance

    38       (9 )     (14 )

Deferred tax effects of non-U.S. tax rate changes

    (2 )     (3 )     (2 )

Impact of equity method investments

    (21 )     (37 )     (10 )

Sale of the India-based DIY business

          (4 )     (35 )

Non-U.S. withholding tax on repatriated earnings, net of U.S. foreign tax credits

    17       14       19  

Other U.S. tax effects, including nondeductible expenses and other credits

    (2 )     (6 )     (9 )

Total income tax expense

  $ 186     $ 191     $ 42  
   

Year ended December 31,

 
   

2022

   

2021

   

2020

 

Income from continuing operations before income taxes

  $ 700     $ 1,250     $ 332  
                         

Expected tax expense at U.S. statutory rate of 21%

  $ 146     $ 261     $ 70  

Change resulting from:

                       

State tax expense, net of federal benefit

    3       15       (4 )

Non-U.S. tax rate differentials

    8       16       16  

Other non-U.S. tax effects, including nondeductible expenses and other withholding taxes

    (10 )     16       4  

Venator investment basis difference and fair market value adjustments

          (29 )      

Change in valuation allowance on capital loss related to Venator investment

          (28 )      

Non-U.S. income subject to U.S. tax not offset by U.S. foreign tax credits

    3       (19 )     7  

Tax authority audits and dispute resolutions

    6       4        

Change in valuation allowance

    38       (9 )     (14 )

Deferred tax effects of non-U.S. tax rate changes

    (2 )     (3 )     (2 )

Impact of equity method investments

    (21 )     (37 )     (10 )

Sale of the India-based DIY business

          (4 )     (35 )

Non-U.S. withholding tax on repatriated earnings, net of U.S. foreign tax credits

    17       14       19  

Other U.S. tax effects, including nondeductible expenses and other credits

          (5 )     (9 )

Total income tax expense

  $ 188     $ 192     $ 42  
Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block]
   

Year ended December 31,

 
   

2022

   

2021

   

2020

 

U.S.

  $ 273     $ 530     $ (231 )

Non-U.S.

    424       716       562  

Total

  $ 697     $ 1,246     $ 331  
   

Year ended December 31,

 
   

2022

   

2021

   

2020

 

U.S.

  $ 276     $ 534     $ (230 )

Non-U.S.

    424       716       562  

Total

  $ 700     $ 1,250     $ 332  
Schedule of Deferred Tax Assets and Liabilities [Table Text Block]
   

December 31,

 
   

2022

   

2021

 

Deferred income tax assets:

               

Net operating loss carryforwards

  $ 220     $ 221  

Operating leases

    100       106  

Pension and other employee compensation

    65       110  

Deferred interest

    49       35  

Basis difference in Venator investment

    45       42  

Capitalized research and development costs

    30       9  

Property, plant and equipment

    25       19  

Intangible assets

    24       28  

Intercompany prepayments (FDII related)

    9       56  

Other, net

    45       26  

Total

  $ 612     $ 652  

Deferred income tax liabilities:

               

Property, plant and equipment

  $ (263 )   $ (234 )

Operating leases

    (102 )     (105 )

Intangible assets

    (83 )     (94 )

Pension and other employee compensation

    (47 )     (36 )

Outside basis difference in subsidiaries

    (31 )     (17 )

Unrealized currency gains

    (11 )     (6 )

Other, net

    (9 )     (10 )

Total

  $ (546 )   $ (502 )

Net deferred tax asset before valuation allowance

  $ 66     $ 150  

Valuation allowance—net operating losses and other

    (169 )     (131 )

Net deferred tax (liability) asset

  $ (103 )   $ 19  

Non-current deferred tax asset

  $ 147     $ 180  

Non-current deferred tax liability

    (250 )     (161 )

Net deferred tax (liability) asset

  $ (103 )   $ 19  
   

December 31,

 
   

2022

   

2021

 

Deferred income tax assets:

               

Net operating loss carryforwards

  $ 220     $ 221  

Operating leases

    100       106  

Pension and other employee compensation

    65       110  

Deferred interest

    49       35  

Basis difference in Venator investment

    45       42  

Capitalized research and development costs

    30       9  

Property, plant and equipment

    25       19  

Intangible assets

    24       28  

Intercompany prepayments (FDII related)

    9       56  

Other, net

    45       26  

Total

  $ 612     $ 652  

Deferred income tax liabilities:

               

Property, plant and equipment

  $ (263 )   $ (234 )

Operating leases

    (102 )     (105 )

Intangible assets

    (83 )     (94 )

Pension and other employee compensation

    (47 )     (36 )

Outside basis difference in subsidiaries

    (31 )     (17 )

Unrealized currency gains

    (11 )     (6 )

Other, net

    (13 )     (12 )

Total

  $ (550 )   $ (504 )

Net deferred tax asset before valuation allowance

  $ 62     $ 148  

Valuation allowance—net operating losses and other

    (169 )     (131 )

Net deferred tax (liability) asset

  $ (107 )   $ 17  

Non-current deferred tax asset

  $ 147     $ 180  

Non-current deferred tax liability

    (254 )     (163 )

Net deferred tax (liability) asset

  $ (107 )   $ 17  
Summary of Valuation Allowance [Table Text Block]
   

2022

   

2021

   

2020

 

Valuation allowance as of January 1

  $ 131     $ 206     $ 231  

Valuation allowance as of December 31

    169       131       206  

Net (increase) decrease

    (38 )     75       25  

Foreign currency movements

    (4 )     (4 )     6  

Decrease to deferred tax assets with no impact on operating tax expense, including an offsetting (decrease) increase to valuation allowances

    4       (62 )     (17 )

Change in valuation allowance per rate reconciliation

  $ (38 )   $ 9     $ 14  

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

  $ 13     $ 13     $ 14  

Releases of valuation allowances in various jurisdictions

          2        

Establishments of valuation allowances in various jurisdictions

    (51 )     (6 )      

Change in valuation allowance per rate reconciliation

  $ (38 )   $ 9     $ 14  
   

2022

   

2021

   

2020

 

Valuation allowance as of January 1

  $ 131     $ 206     $ 231  

Valuation allowance as of December 31

    169       131       206  

Net (increase) decrease

    (38 )     75       25  

Foreign currency movements

    (4 )     (4 )     6  

Decrease to deferred tax assets with no impact on operating tax expense, including an offsetting (decrease) increase to valuation allowances

    4       (62 )     (17 )

Change in valuation allowance per rate reconciliation

  $ (38 )   $ 9     $ 14  

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

  $ 13     $ 13     $ 14  

Releases of valuation allowances in various jurisdictions

          2        

Establishments of valuation allowances in various jurisdictions

    (51 )     (6 )      

Change in valuation allowance per rate reconciliation

  $ (38 )   $ 9     $ 14  
Schedule of Unrecognized Tax Benefits Roll Forward [Table Text Block]
   

2022

   

2021

 

Unrecognized tax benefits as of January 1

  $ 48     $ 16  

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

    6       30  

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

    4       2  

Reductions resulting from the lapse of statutes of limitation

          (1 )

Foreign currency movements

    (1 )     1  

Unrecognized tax benefits as of December 31

  $ 57     $ 48  
Schedule of Unrecognized Tax Benefits, Income Tax Penalties and Interest Recognized in Financial Statement [Table Text Block]
   

Year ended December 31,

 
   

2022

   

2021

   

2020

 

Interest included in tax expense

  $ 3     $ 1     $ 1  

Penalties included in tax expense

                 
   

December 31,

 
   

2022

   

2021

 

Accrued liability for interest

  $ 8     $ 6  

Accrued liability for penalties

           
Summary of Open Tax Years [Table Text Block]

Tax jurisdiction

 

Open tax years

Belgium

 

2020 and later

China

 

2011 and later

France   2020 and later

Germany

 

2016 and later

Hong Kong

 

2015 and later

India

 

2006 and later

Italy

 

2016 and later

Japan   2022 and later

Mexico

 

2016 and later

Spain   2012 and later

Switzerland

 

2016 and later

The Netherlands

 

2020 and later

Thailand

 

2013 and later

United Kingdom

 

2019 and later

United States federal

 

2017 and later