Income Taxes (Tables)

12 Months Ended

Dec. 31, 2016

Domestic and Foreign Income (Loss) Before Income Taxes

The following table summarizes our U.S. and foreign income (loss) before income taxes:



	Year Ended December 31,
	2016			2015		2014
	(In thousands)
U.S.	$	(47,205	)	$	24,397	$	176,820
Foreign	323,805			901,565		287,821
Total	$	276,600		$	925,962	$	464,641

Components of Income Tax Expense

The following table summarizes our provision for income taxes:



	Year Ended December 31,
	2016			2015			2014
				(In thousands)
Current income tax expense:
Federal	$	(41,418	)	$	154,050		$	120,541
State	5,875			1,440			6,645
Foreign	64,946			69,359			43,536
Current income tax expense	29,403			224,849			170,722
Deferred income tax (benefit) expense:
Federal	$	(5,166	)	$	(6,865	)	$	(47,390	)
State	(2,863		)	2,156			(2,419		)
Foreign	(6,059		)	(16,926		)	(29,222		)
Deferred income tax (benefit) expense:	(14,088		)	(21,635		)	(79,031		)
Income tax expense	$	15,315		$	203,214		$	91,691

Components of Deferred Tax Assets and Deferred Tax Liabilities

As of December 31, 2016 and 2015, the significant components of our deferred tax assets and deferred tax liabilities were as follows:



	December 31,
	2016			2015
	(In thousands)
Deferred tax assets:
Provision for accrued expenses	$	94,031		$	95,499
Loyalty rewards reserve	163,410			132,980
Occupancy tax reserve	27,814			16,358
Net operating loss and tax credit carryforwards	114,470			202,220
Stock-based compensation	81,221			56,729
Fair value of debt adjustment	—			24,770
Other	31,569			28,766
Total deferred tax assets	512,515			557,322
Less valuation allowance	(65,516		)	(122,850		)
Net deferred tax assets	$	446,999		$	434,472
Deferred tax liabilities:
Prepaid merchant bookings and prepaid expenses	$	(20,289	)	$	(41,006	)
Intangible assets	(718,810		)	(758,976		)
Property and equipment	(152,550		)	(87,308		)
Other	(16,662		)	(5,565		)
Total deferred tax liabilities	$	(908,311	)	$	(892,855	)
Net deferred tax liability	$	(461,312	)	$	(458,383	)

Schedule of Statutory Federal Income Tax Rate to Income from Continuing Operations before Income Taxes

A reconciliation of amounts computed by applying the federal statutory income tax rate to income from continuing operations before income taxes to total income tax expense is as follows:



	Year Ended December 31,
	2016			2015			2014
				(In thousands)
Income tax expense at the federal statutory rate of 35%	$	96,810		$	324,087		$	162,624
Foreign tax rate differential	(66,947		)	(162,784		)	(81,371		)
Unrecognized tax benefits and related interest	33,170			33,362			(1,625		)
Change in valuation allowance	(13,924		)	27,320			13,914
Return to provision true-ups	(14,420		)	(8,875		)	(4,472		)
Pay-to-play penalties	—			(11,222		)	1,322
Acquisition related costs	1,611			12,545			56
Federal research and development credit	(15,000		)	(11,500		)	(6,000		)
trivago stock-based-compensation	16,956			—			—
Excess tax benefits related to stock-based compensation	(39,751		)	—			—
Other, net	16,810			281			7,243
Income tax expense	$	15,315		$	203,214		$	91,691

Income Tax Reconciliation of Beginning and Ending Amount of Gross Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows:



	2016			2015			2014
				(In thousands)
Balance, beginning of year	$	171,177		$	110,561		$	109,712
Increases to tax positions related to the current year	42,877			33,880			28,416
Increases to tax positions related to prior years	8,124			26,219			4,469
Decreases to tax positions related to prior years	(2,262		)	—			—
Reductions due to lapsed statute of limitations	(4,688		)	(2,525		)	(23,709		)
Settlements during current year	—			(100		)	—
Interest and penalties	5,304			3,142			(8,327		)
Balance, end of year	$	220,532		$	171,177		$	110,561