Priceline 2014 Annual Report Download - page 111

The income tax expense (benefit) for the year ended December 31, 2012 is as follows (in thousands):
The Company has significant deferred tax assets, resulting principally from U.S. net operating loss carryforwards ("NOLs"). The
amount of NOLs available for the Company's use is limited by Section 382 of the Internal Revenue Code ("IRC Section 382 "). IRC Section
382
imposes limitations on the availability of a company's NOLs after a more than 50% ownership change occurs. It was determined that ownership
changes, as defined in IRC Section 382 have occurred. The amount of the Company's NOLs incurred prior to each ownership change is limited
based on the value of the Company on the respective dates of ownership change.
At December 31, 2014 , after considering the impact of IRC Section 382 , the Company had approximately $1.2 billion of available
NOL's for U.S. federal income tax purposes, comprised of approximately
$22 million of NOLs generated from operating losses and
approximately $1.2 billion of NOLs generated from equity-related transactions, including equity-based compensation and stock warrants. The
NOLs mainly expire from December 31, 2019 to December 31, 2021. The utilization of these NOLs is dependent upon the Company's ability to
generate sufficient future taxable income in the United States. The Company periodically evaluates the likelihood of the realization of deferred
tax assets, and reduces the carrying amount of these deferred tax assets by a valuation allowance to the extent it believes a portion will not be
realized. The Company considers many factors when assessing the likelihood of future realization of the deferred tax assets, including its recent
cumulative earnings experience by taxing jurisdiction, expectations of future income, the carryforward periods available for tax reporting
purposes, and other relevant factors.
The tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities at December 31, 2014
and 2013 are as follows (in thousands):
(1) Includes non-current deferred tax assets of $8.5 million and $7.1 million as of December 31, 2014 and 2013 , respectively, reported in
"Other assets" on the Consolidated Balance Sheets and current deferred tax liabilities of $1.2 million and $38 thousand as of December 31, 2014
and 2013 , respectively, reported in "Accrued expenses and other current liabilities" on the Consolidated Balance Sheets.
The valuation allowance on deferred tax assets of $162.0 million at December 31, 2014 includes $140.4 million related to U.S. federal
net operating loss carryforwards derived from equity transactions and $21.6 million related to international operations. Additionally, since
January 1, 2006, the Company has generated additional federal tax benefits of
106
Current Deferred Total
International
$
302,352
$
(13,792
)
$
288,560
U.S. Federal
3,681
37,956
41,637
U.S. State
12,203
(4,568
)
7,635
Total
$
318,236
$
19,596
$
337,832
2014 2013
Deferred tax assets/(liabilities):
Net operating loss carryforward — U.S.
$
176,786
$
263,994
Net operating loss carryforward — International
22,353
21,660
Fixed assets
—
818
Accrued expenses
41,117
22,708
Stock-based compensation and other stock based payments
54,935
40,346
Other
24,456
33,530
Subtotal
319,647
383,056
Discount on convertible notes
(141,193
)
(97,550
)
Intangible assets and other
(856,807
)
(356,669
)
Euro denominated debt
(35,441
)
—
Fixed assets
(3,409
)
—
Less valuation allowance on deferred tax assets
(161,997
)
(173,558
)
Net deferred tax assets (liabilities)
(1)
$
(879,200
)
$
(244,721
)