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, 2012

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

- 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.

+ References + Details

- Definition

Tabular disclosure of income tax examinations that an enterprise is currently subject to or that have been completed in the current period typically including a description of the examination, the jurisdiction conducting the examination, the tax year(s) under examination, the likelihood of an unfavorable settlement, the range of possible losses, the liability recorded, the increase or decrease in the liability from the prior period, and any penalties and interest that have been recorded.

+ References + Details

- Definition

Tabular disclosure of valuation allowances to reduce deferred tax assets to net realizable value, including identification of the deferred tax asset more likely than not will not be fully realized and the corresponding amount of the valuation allowance.

+ References + Details