Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Income Tax Disclosure [Abstract]

Components of Income Before Provision for Income Taxes

The components of income before provision for income taxes for the years ended December 31, 2012, 2011, and 2010 are as follows (in millions):

	Year Ended December 31,
	2012			2011			2010
Domestic	$	1,062		$	1,819		$	1,027
Foreign	(568		)	(124		)	(19		)
Income before provision for income taxes	$	494		$	1,695		$	1,008

Schedule of Provision for Income Taxes

The provision for income taxes consisted of the following (in millions):

	Year Ended December 31,
	2012			2011			2010
Current:
Federal	$	559		$	664		$	325
State	45			60			57
Foreign	22			8			1
Total current tax expense	626			732			383
Deferred:
Federal	(172		)	(34		)	13
State	(6		)	(3		)	6
Foreign	(7		)	—			—
Total deferred tax expense (benefit)	(185		)	(37		)	19
Provision for income taxes	$	441		$	695		$	402

Reconciliation of U.S. Federal Statutory Income Tax Rate to Effective Tax Rate

A reconciliation of the U.S. federal statutory income tax rate of 35% to our effective tax rate is as follows (in percentages):

	Year Ended December 31,
	2012		2011		2010
U.S. federal statutory income tax rate	35.0	%	35.0	%	35.0	%
State income taxes, net of federal benefit	6.2		2.2		4.0
Research tax credits	—		(1.0	)	(0.8	)
Share-based compensation	19.2		1.5		0.3
Foreign losses not benefited	26.9		3.3		0.8
Other	2.0		—		0.6
Effective tax rate	89.3	%	41.0	%	39.9	%

Schedule of Deferred Tax Assets and Liabilities

Our deferred tax assets (liabilities) are as follows (in millions):

	December 31,
	2012			2011
Deferred tax assets:
Net operating loss carryforward	$	10		$	3
Tax credit carryforward	37			9
Share-based compensation	233			79
Accrued expenses and other liabilities	83			58
Other	16			—
Total deferred tax assets	379			149
Less: valuation allowance	(37		)	(9		)
Deferred tax assets, net of valuation allowance	342			140
Deferred tax liabilities:
Depreciation and amortization	(97		)	(69		)
Purchased intangible assets	(92		)	(10		)
Deferred foreign taxes	(15		)	(1		)
Total deferred tax liabilities	(204		)	(80		)
Net deferred tax assets	$	138		$	60

Schedule of Gross Unrecognized Tax Benefits Roll Forward

The following table reflects changes in the gross unrecognized tax benefits (in millions):

	Year Ended December 31,
	2012			2011			2010
Gross unrecognized tax benefits-beginning of period	$	63		$	18		$	9
Increase related to prior year tax positions	13			5			1
Decreases related to prior year tax positions	(16		)	(2		)	(2		)
Increases related to current year tax positions	104			42			10
Gross unrecognized tax benefits-end of period	$	164		$	63		$	18