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INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2021

Schedule of Income before Income Tax, Domestic and Foreign


Geographic Allocation of Income and Provision for Income Taxes on Continuing Operations
In millions	2021		2020		2019
Income (loss) from continuing operations before income taxes
Domestic 1	$	1,523	$	(681)	$	(1,196)
Foreign 2	6,622		2,752		(51)
Income (loss) from continuing operations before income taxes	$	8,145	$	2,071	$	(1,247)
Current tax expense (benefit)
Federal	$	(46)	$	(176)	$	(287)
State and local	48		4		25
Foreign	1,460		691		960
Total current tax expense	$	1,462	$	519	$	698
Deferred tax expense (benefit)
Federal	$	130	$	184	$	52
State and local	26		19		19
Foreign	122		55		(299)
Total deferred tax expense (benefit)	$	278	$	258	$	(228)
Provision for income taxes on continuing operations	$	1,740	$	777	$	470
Income (loss) from continuing operations, net of tax	$	6,405	$	1,294	$	(1,717)

1.The 2019 amount includes approximately $1.4 billion of expense related to goodwill impairment and environmental matters. See Notes 13 and 16 for additional information.

2.The 2019 amount includes approximately $1.8 billion of expense for Sadara related charges. See Note 12 for additional information.

Schedule of Effective Income Tax Rate Reconciliation


Reconciliation to U.S. Statutory Rate	2021		2020 1		2019 1
Statutory U.S. federal income tax rate	21.0	%	21.0	%	21.0	%
Equity earnings effect	(2.2)		0.2		(3.2)
Foreign income taxed at rates other than the statutory U.S. federal income tax rate	(1.3)		(2.3)		(14.8)
U.S. tax effect of foreign earnings and dividends	1.7		3.9		1.9
Unrecognized tax benefits	4.7		7.3		1.0
Divestitures 2	—		(5.1)		—
Changes in valuation allowances	2.6		12.6		—
Impact of tax reform 3	—		—		11.1
Federal tax accrual adjustment 4	(5.3)		0.3		10.4
State and local income taxes	0.2		0.3		(4.4)
Sadara related charges 5	—		—		(29.5)
Goodwill impairment 6	—		—		(17.5)

Other - net	—		(0.7)		(13.7)
Effective tax rate	21.4	%	37.5	%	(37.7)	%

1.Certain prior year rates have been adjusted to conform with the current year presentation.

2.The 2020 impact relates to the divestiture of a bio-ethanol manufacturing facility in Brazil. See Note 6 for additional information.

3.Includes the impact of tax reform in Switzerland and the United States.

4.The 2021 impact represents a capital loss incurred on an internal restructuring fully offset by a valuation allowance reported in "Changes in valuation allowances" line item. The 2019 impact primarily relates to the favorable impact of the restoration of tax basis in assets, driven by a court judgment that did not involve the Company.

5.See Note 12 for additional information.

6.See Note 13 for additional information.

Schedule of Deferred Tax Assets and Liabilities


Deferred Tax Balances at Dec 31	2021				2020 1
In millions	Assets		Liabilities		Assets		Liabilities
Property	$	484	$	3,150	$	448	$	3,337
Tax loss and credit carryforwards	1,784		—		2,004		—
Postretirement benefit obligations	1,753		303		2,712		250
Other accruals and reserves	1,487		191		1,542		78
Intangibles	108		556		124		638
Inventory	33		203		30		198

Investments	31		26		142		51

Other – net	1,093		101		858		196
Subtotal	$	6,773	$	4,530	$	7,860	$	4,748
Valuation allowances	(1,391)		—		(1,302)		—
Total	$	5,382	$	4,530	$	6,558	$	4,748

1.Certain prior year balances have been adjusted to conform with the current year presentation.

Summary of Operating Loss Carryforwards


Operating Loss and Tax Credit Carryforwards at Dec 31	2021		2020
In millions	Assets		Assets
Operating loss carryforwards
Expire within 5 years	$	240	$	274
Expire after 5 years or indefinite expiration	817		1,031
Total operating loss carryforwards	$	1,057	$	1,305
Tax credit carryforwards
Expire within 5 years	$	227	$	434
Expire after 5 years or indefinite expiration	103		265
Total tax credit carryforwards	$	330	$	699
Capital loss carryforwards
Expire within 5 years	$	397	$	—
Total tax loss and tax credit carryforwards	$	1,784	$	2,004

Schedule of Total Gross Unrecognized Tax Benefits

The following table provides a reconciliation of the Company's unrecognized tax benefits:


Total Gross Unrecognized Tax Benefits
In millions	2021		2020		2019
Total unrecognized tax benefits at Jan 1	$	373	$	319	$	314
Decreases related to positions taken on items from prior years	(3)		(1)		(1)
Increases related to positions taken on items from prior years	187		52		16
Increases related to positions taken in the current year	44		18		10
Settlement of uncertain tax positions with tax authorities	(18)		(14)		(19)
Decreases due to expiration of statutes of limitations	(1)		(1)		—
Foreign exchange gain	(2)		—		(1)
Total unrecognized tax benefits at Dec 31	$	580	$	373	$	319
Total unrecognized tax benefits that, if recognized, would impact the effective tax rate	$	501	$	285	$	234
Total amount of interest and penalties expense (benefit) recognized in "Provision for income taxes on continuing operations"	$	359	$	84	$	(11)
Total accrual for interest and penalties recognized in the consolidated balance sheets	$	502	$	144	$	100

Schedule of Tax Years Subject to Examination by Major Tax Jurisdiction


Tax Years Subject to Examination by Major Tax Jurisdiction at Dec 31, 2021			Earliest Open Year
Jurisdiction
Argentina			2014
Brazil			2015
Canada			2012
China			2011
Germany			2014
Italy			2016
The Netherlands			2019
Switzerland			2016
United States:
Federal income tax			2007
State and local income tax			2004