Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

Summary of Our Domestic and Foreign Income Before Income Taxes

The following table presents a summary of our domestic and foreign income before income taxes:

	Year Ended December 31,
	2014		2013		2012
	(in millions)
Domestic	$	146	$	129	$	133
Foreign		176		155		149
Total	$	322	$	284	$	282

Summary of the Components of Our Provision for Income Taxes

The following table presents a summary of the components of our provision for income taxes:

	Year Ended December 31,
	2014			2013			2012
	(in millions)
Current income tax expense:
Federal	$	93		$	48		$	56
State		14			9			6
Foreign		6			17			30
Current income tax expense		113			74			92
Deferred income tax (benefit) expense:
Federal		(12	)		6			(3	)
State		(1	)		1			—
Foreign		(4	)		(2	)		(2	)
Deferred income tax (benefit) expense:		(17	)		5			(5	)
Provision for income taxes	$	96		$	79		$	87

Summary of Deferred Tax Assets and Deferred Tax Liabilities

Our deferred tax assets and deferred tax liabilities as of December 31, 2014 and 2013 are as follows:

	December 31,
	2014			2013
	(in millions)
Deferred tax assets:
Stock-based compensation	$	43		$	30
Net operating loss carryforwards		34			18
Provision for accrued expenses		13			7
Deferred rent		5			—
Build-to-suit lease		26			—
Foreign advertising spend		9			—
Other		5			4
Total deferred tax assets	$	135		$	59
Less: valuation allowance		(19	)		(13	)
Net deferred tax assets	$	116		$	46
Deferred tax liabilities:
Intangible assets	$	(88	)	$	(32	)
Property and equipment		(25	)		(18	)
Prepaid expenses		(4	)		(2	)
Lease financing obligation		(26	)		—
Other		(1	)		(2	)
Total deferred tax liabilities	$	(144	)	$	(54	)
Net deferred tax liability	$	(28	)	$	(8	)

Reconciliation of the Provision for Income Taxes

A reconciliation of the provision for income taxes to the amounts computed by applying the statutory federal income tax rate to income before income taxes is as follows:

	Year Ended December 31,
	2014			2013			2012
	(in millions)
Income tax expense at the federal statutory rate of 35%	$	113		$	100		$	99
Foreign rate differential		(49	)		(41	)		(25	)
State income taxes, net of effect of federal tax benefit		13			8			5
Unrecognized tax benefits and related interest		14			9			5
Non-deductible transaction costs		1			—			—
Change in valuation allowance		5			2			2
Other, net		(1	)		1			1
Provision for income taxes	$	96		$	79		$	87

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

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits (excluding interest and penalties) is as follows:

	December 31,
	2014		2013			2012
	(in millions)
Balance, beginning of year	$	36	$	24		$	13
Increases to tax positions related to the current year		13		12			12
Increases to tax positions related to the prior year		18		4			—
Reductions due to lapsed statute of limitations		—		—			—
Decreases to tax positions related to the prior year		—		(4	)		—
Settlements during current year		—		—			(1	)
Balance, end of year	$	67	$	36		$	24