TripAdvisor 2015 Annual Report Download - page 90

Download and view the complete annual report

Please find page 90 of the 2015 TripAdvisor annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 115

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115

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,
2015 2014 2013
(in millions)
Incometaxexpenseatthefederalstatutoryrateof35% $ 84$ 113$ 100
Foreignratedifferential (53) (49)  (41)
Stateincometaxes,netofeffectoffederaltaxbenefit 4 13 8
Unrecognizedtaxbenefitsandrelatedinterest 12 14 9
Changeincost-sharingtreatmentofstock-basedcompensation (13) - -
Non-deductibletransactioncosts 1 1 -
Changeinvaluationallowance 5 5 2
Other,net 1(1) 1
Provisionforincometaxes $ 41$ 96$ 79
During2011,theSingaporeEconomicDevelopmentBoardacceptedourapplicationtoreceiveataxincentiveundertheInternationalHeadquarters
Award.Thisincentiveprovidesforareducedtaxrateonqualifyingincomeof5%ascomparedtoSingapore’sstatutorytaxrateof17%andisconditionaluponour
meetingcertainemploymentandinvestmentthresholds.ThisagreementhasbeenextendeduntilJune30,2021aswehavemetcertainemploymentandinvestment
thresholds.Thisbenefitresultedinadecreasetothe2015taxprovisionof$4millionoraddedanincremental$0.03toourDilutedEPSfor2015.
ByvirtueofpreviouslyfiledconsolidatedincometaxreturnsfiledwithExpedia,wearecurrentlyunderanIRSauditforthe2009and2010taxyears,and
havevariousongoingstateincometaxaudits.WeareseparatelyunderexaminationbytheIRSforthe2012and2013taxyearsandhavecommencedan
employmenttaxauditwiththeIRSforthe2013and2014taxyears.Theseauditsincludequestioningofthetimingandtheamountofincomeanddeductionsand
theallocationofincomeamongvarioustaxjurisdictions.Theseexaminationsmayleadtoproposedorordinarycourseadjustmentstoourtaxes.Wearenolonger
subjecttotaxexaminationsbytaxauthoritiesforyearspriorto2007.AsofDecember31,2015,nomaterialassessmentshaveresulted.
DuringtheyearendedDecember31,2015,wereceivednotificationofadraftproposedadjustmentfromtheIRSforthe2009and2010taxyearsandwe
anticipatereceivingadditionalnoticesofproposedadjustmentsforthesameyears.Theseproposedadjustmentsarerelatedtotransferpricingwithourforeign
subsidiaries,andwouldresultinanincreasetoU.S.taxableincomeandfederaltaxexpensefor2009and2010,subjecttointerest.Ourpolicyistoreviewand
updatetaxreservesasfactsandcircumstanceschange.Basedonourinterpretationoftheregulationsandavailablecaselaw,webelievethepositionwehavetaken
withregardtotransferpricingwithourforeignsubsidiariesissustainable.WeintendtodefendourpositionthroughIRSadministrativeand,ifnecessary,by
judicialremedies.AsofDecember31,2015,noadditionaladjustmentshavebeenproposed.
InJuly2015,theUnitedStatesTaxCourt(the“Court”)issuedanopinionfavorabletoAlteraCorporation(“Altera”)withrespecttoAltera’slitigationwith
theInternalRevenueService(“IRS”).ThisopinionwassubmittedasafinaldecisionunderTaxCourt(“T.C.”)Rule155duringDecember2015.Thelitigation
relatestothetreatmentofstock-basedcompensationexpenseinaninter-companycost-sharingarrangementwithAltera’sforeignsubsidiary.Initsopinion,the
CourtacceptedAltera’spositionofexcludingstockbasedcompensationfromitsinter-companycost-sharingarrangement.TheIRShastherighttoappealthe
Courtdecision.Atthistime,theU.S.DepartmentoftheTreasuryhasnotwithdrawntherequirementfromitsregulationstoincludestock-basedcompensationin
intercompanycost-sharingarrangements.TheCompanyhasevaluatedtheimpactofthecourtcaseandrecordedataxbenefitof$13millioninitsconsolidated
statementofoperationsfortheyearendedDecember31,2015.TheCompanywillcontinuetomonitorthismatterandrelatedpotentialimpactstoitsconsolidated
financialstatements.
87